Jonathan Nitzan

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Jonathan Nitzan is a Professor of Political Economy at York University, Toronto, Canada. Nitzan has written a number of articles with Shimshon Bichler dealing with the political economy of Israel and the United States, as well as theorizing of capital as the quantification of power. Central to their theory is the concept of differential accumulation.

Nitzan and Bichler argue that it was never possible to separate economics from politics. This separation is required to allow for neo-classical economics base their theory on utility value and for Marxist to base the labour theory of value on quantified abstract labour. Instead of a utility theory of value (like neo-classical economics) or a labour theory of value (as found in Marxist economics), Nitzan and Bichler proposed a power theory of value. The structure of prices has little to do with the so-called "material" sphere of production and consumption. The quantification of power in prices is not the consequence of some external laws – whether natural or historical – but entirely internal to society.

In capitalism, power is the governing principle as rooted in the centrality of private ownership. Private ownership is wholly and only an act of institutionalized exclusion, and institutionalized exclusion is a matter of organized power. And since the power behind private ownership is denominated in prices, Nitzan and Bichler argue, there is a need for a power theory of value.

Capitalization, in their theory, is a measure of power, as illuminated through the present discounted value of future earnings (while also taking into account hype and risk). This formula is basic to finance which is the overarching logic of capitalism. The logic is also inherently differential as every capitalist strives to accumulate greater earnings than their competitors (but not profit maximization). Nitzan and Bichler label this process differential accumulation. In order to have a power theory of value there needs to be differential accumulation where some owners' rate of growth of capitalization is faster than the average pace of capitalization.