VOLUME III, SEMESTER 2, CHAPTER 18
Capital Splits into Three Layers, Hide and Hair
Start with a word everyone speaks as though it named one thing. Capital came in, capital ran off, capital chases profit, capital is heartless, and the sentences slide out as if there really were a single thing called capital loose in the world, of one temper and one gait. This chapter pries that single thing open, and inside finds at least three layers of wholly unlike things, resting one on top of another, the life of the upper two held in the hand of the lowest. For three chapters the book stood on the account-book side and then turned to the worker’s card, and now it turns to the other side entirely, and opens the capitalist’s holdings. What it finds is not a fortress but a body, a thin hide with coats of hair grown over it, and an ancestor’s eight characters that decide the fate of the whole arrangement.
The first section brings out those eight characters. In 645 BC, in the state of Jin, a grandee named Guo She said to his duke, the hide gone, on what will the hair rest, and though he spoke then of politics, the position under the line is far larger than the matter he spoke of. The section names the three layers plainly. Industrial capital is the hide: the sum put into factory, field, mine, freight, and office tower, that becomes machines and plant and stock and wages and at last a thing that can be eaten, worn, used. Financial capital is the first coat of hair on the hide: the sum that makes nothing itself but gathers the scattered little of tens of millions into a sum that can act, growing on the hide and feeding on its harvest. Fictitious capital is hair grown on hair: the options, futures, wagering contracts, bundles packed and cut and sold and packed again, furthest from real production, feeding on the rise and fall of the layer beneath. The section looks honestly at each. The hide has four tempers, slow and heavy and brittle, yet true, answering to a real bowl of rice and a real lit lamp, and the whole institution’s load-bearing presses on it, however often it gets called low-end and old-fashioned while the handsome coats of hair take all the storytelling. The hair is no sin either, it is a born position, and a hide with no hair grows cold in the wind, the factory left forever a small workshop, the road never laid. Only one thing is asked: let the hair know it is hair.
The second section goes back to 2008, and finds the hide beneath it first, and the hide is not in any bank or meeting room but is an ordinary person rising on an ordinary morning, going to work, coming home, and on the month’s last day taking part of his wage to repay his home loan, one person, one job, one income, one sum owed. Then it watches the hair grow layer over layer: the loan, the bundle of a thousand loans cut into shares, the bundle of bundles, the wagers on the bundles, the wagers on the wagers, until the finest thread at the top has a price set not by whether that person keeps his job but by formulas and by a crowd trading it among themselves, the whole coat grown thicker than the hide by a hundredfold. Then a small gash: a batch of people can no longer repay, the hours cut, the jobs gone. The top collapses first because it hangs on confidence, then layer drags layer down to the bottom, and reaching back it drags the hide in too, factories shut, the ones who could still repay now unable. The section then says the grave line, that this was no one’s malice, no one seated plotting to ruin millions, the makers of the bundles mostly in their own positions doing their share in earnest, and the collapse a matter of position, not morals, the layers of hair once past what the hide can bear making the fall a necessity. And it refuses the easy anger that says shear the hair off, because without the hair the savings of millions never build a factory or lay a railway, and the sixth of last chapter’s seven accounts, the interest, flows back to someone’s deposit and some old person’s pension. What is wanted is only that the hair know it is hair.
The third section asks the honest, solid question the whole chapter has been building toward: how thick is right. It gives the answer the ancestors gave, which is no number at all but a rule, because every place wants a number that settles the matter and this thing has none. Laozi’s line is the rule: knowing enough escapes disgrace, knowing when to stop escapes peril, so one may last long. Knowing enough is about the amount, and enough is not a fixed figure but a question of whether the hide beneath can bear the load. Knowing when to stop is about the step, not a forbidding of the walk but a knowing of the edge when one reaches it. And lasting long is the return Laozi offers, not more but longer. The rule measures neither high and low nor right and wrong, it measures only whether the load can still be borne. Then the section sets the rule on four positions and makes it live: the financier who must know his fulcrum lands on the hide, that under each contract is a person on a street doing real work, the derivatives worker who must know his position hangs on a long chain and the further from the hide the more he must know where it is, the one who sets a place’s direction who must know the true holdings are grain and power and roads and factories and crafts while the hair is only a magnifier that cannot stand in for the thing magnified, and the ordinary person handing his money out who must be able to say which street and which factory his sum answers to, or it is already up on several layers of hair and the hide once stirred it is gone.
From the four the chapter lifts its core line, the position must know its own position, and ties it back to last semester in a way worth carrying forward. Wei the more refined is the harder to recognize, and the three layers of capital are one increasingly refined wei: the first still shows the factory and the workers, the second shows only a piece of paper, the third cannot even say what the paper answers to and shows only a number leaping. And when the number leaps it looks nothing like a lock, yet a lock it is, and where the visible lock could be bargained with, this layer of hair is the kind that cannot be seen. Then the chapter sets its meaning down whole and turns to look at the capitalist who has come to seem so firm, seated on his hide and his hair, and asks the one question that undoes the firmness, can he sleep, because the money unmoved shrinks of itself, the market turns its face and his goods find no buyer overnight, the technology changes and his factory goes to zero, the borrowed money must be repaid on time, the team can leave at any moment, and what he saved a lifetime must pass to a son or daughter who may not catch it. The slaveholder is a slave too, the higher the position the more the constraints, and the next chapter sets those five chains before you one by one.
What you carry out of this chapter is a way of seeing that keeps you from two mistakes at once, worshipping the hair and cursing it. The hair is real work and real use, and the hair climbed into the hide’s seat is 2008 waiting to happen, and the difference between the two is nothing more than whether the position knows its own position. And you carry a rule you can actually use, not a number but a question, put to any layer of any arrangement you find yourself in: can the hide beneath still bear this. Knowing enough, knowing when to stop, so one may last long.
SECTIONS
Section 1 645 BC, That One Line of Guo She’s
Section 2 2008, the Time the Hair Dragged the Hide Out of Place
Section 3 How Thick the Hide, How Long the Hair
Credit to the ancestors; the mistakes are mine: Tiger Lyon.