Common problems or different questions: A critique of ‘assetization’

Abstract

This commentary provides the contours of a Marxian critique of ‘assetization’. In doing so, the paper identifies a subjective approach to valuation and value which ties together Birch's and Ward's appeal to theoretical pluralism. The argument highlights how a focus on future-orientated valuation practices elide the question of class and production and, therefore, the very basis of rent and value. A call is made for geographers to better interrogate the relationship between rent and interest in the flurry of research around rentiership.

Introduction

Efforts to draw together social constructivist and materialist political economy are now part of critical human geography's toolkit to make sense of late capitalism's rentier turn (Christophers, 2014; Weber, 2021). Hailing from constructivist and Marxian traditions respectively, Kean Birch and Callum Ward are well positioned to contribute to this project in light of their individual and co-authored projects around ‘rentiership’. In offering up ‘assetization’ as an overarching concept to bridge theoretical dialogue and empirical enquiry between these traditions, there is much to learn here from the clarification of how geographers might navigate the fundamental tensions between different conceptualisations of value and valuation. This is likely to provide further succour to scholars looking to grapple with ‘value in its various guises’ (Bigger and Robertson, 2017: 74) and to those expanding and risking value theory in arguments that capitalist value relations are being actively constituted by the work of nature (Kay and Kenney-Lazar, 2017) and finance (Christophers, 2018).

The paper provides a valuable resource, as is their stated intention, for scholarship on assets and financialisation – especially how we might analytically parse the former from the latter in our research across spatial scales. That said, I am not convinced that assetization, as a ‘middle ground concept cutting across approaches’ (Birch and Ward, 2024), can contain the epistemological differences between (constructivist) social studies of finance and Marxian political economy. Moreover, in this commentary, I will argue that ontologically the concept is weighted towards valuation studies. This is evident in the way the authors posit a subjective approach to value and assets in order to trace out ‘the semiotics of valuation alongside analysis of the socio-material something underpinning valuation’ (Birch and Ward, 2024). In the spirit of sharpening this conversation, I want to question this theoretical endeavour and, in the process, raise some doubts about whether a ‘common problematic’ is identifiable within geographical research into assets.

Assets beyond commodity production?

The crux of the argument runs as follows. Capitalism, in its financialisation since the 1970s, has changed. Accumulation is now reliant on rent-bearing property and not commodity production. Underpinning this shift, the authors argue, is the process of ‘assetization’ – transforming things into resources that generate income without a sale. This process, based on contingent and future-orientated valuation practices – logically precedes the trading of an asset because a ‘viable market’ for the latter is only formed once the enclosed revenue stream is capitalised, discounted against risk calculations, and then traded as ‘rent-bearing property’. Through sociotechnically embedded calculative practices, capital market actors can turn things into revenue streams – the act of ‘reification’ – and pull future value production into present circulation. This ‘reification’ of social relations through assetization, we are told, can be understood through the lens of ‘performativity’ in a social constructivist register and through ‘real abstraction’ in Marxian value-theoretic terms. This theorisation, as far as I can discern, relies on a crucial underlying claim that unites Birch and Ward's different theoretical traditions: capitalist value relations of competition and production have been superseded by the circulation and exchange of rent-bearing property streams of revenue from the monopoly control of assets.

The central issue is what this empirical-theoretical strategy can say about the geography of assetization, which, following unites Birch and Ward's coverage of the literature, can exist in a manifold array of forms and relations. The gambit is that this literature illustrates how an important empirical process (assetization) has been underspecified and would thus benefit from a meso-scale concept (assetization) specifying the processes of enclosing and capitalising resources across economic geography. However, given that the wide-ranging literature review in the paper testifies to an impressive array of scholarship that is, in some way, united by an interest in the ‘new asset geographies’, this hardly speaks of empirical under-specification nor a common object of geographical enquiry. ¹ Indeed, the competing empirical claims for assetization as a real-world process cannot be neatly contained within the conceptual claims about assetization as a ‘processual concept’. One channel of this overspill derives from how the authors suggest that valuation and value approaches can be used to study the formation of asset prices. Reading critically through the theoretical lines, I think it is worth reflecting on this strategy because, at least from the Marxian perspective adopted here (see Iñigo Carrera, 2017), the diverging theories of capitalism on which they rely have important analytical implications for the concepts of value and rent, a point which is glossed over by Birch's and Ward's ‘clarifying lens’.

Pricing assets

Rather than being tethered to any objective substance like ‘value’, the social studies of finance literature has demonstrated that the pricing of assets can be understood as the outcome performative power relations and collective future expectations. Here valuation has become an ontological condition of new power relations in capitalism because ‘all capital is finance, and only finance’ (Bichler and Nitzan, 2009: 262). In a remarkably similar fashion to marginalism, there is no meaningful distinction between price and value as the formation of asset prices is always subjective and contingent. The collapsing of price and value means that all profits from the capitalisation of asset-based revenue streams are equated with ‘economic rent’, the valuation of which rests on situated expert claims and social practices. This permits an interrogation of agents, and their practices, involved in creating assets as symbolic entities and thus dovetails with the social constructivist argument that performative power is what gives assets economic value and commensurability in exchange.

Interestingly, the authors seek to square the circle with Marxian approaches via appeal to a monetary theory of value (Heinrich, 2012). This type of ‘proto marginalist’ approach is followed by value-form theorists (Pitts, 2020: 44), for whom value (abstract labour) can only acquire objective reality through the exchange of products for money. It is an approach that analytically privileges circulation and exchange over production (see Starosta and Kicillof 2007), in part, to distance Marxian value theory from crude Ricardian readings of value as embodied labour time. This permits Birch and Ward to fundamentally remain on the terrain of valuation – assets and exchange focus – to account for the future-orientated formation of asset prices but draws on the concept of ‘real abstraction’ (cf., Sohn-Rethel 1978) to make this commensurable with the language of commodities, as well as asset, circulation. As Birch and Ward argue ‘assetization, from this perspective, is the creation of exchange values that do not represent labour power but mechanisms of rent extraction circulating as capitalized real abstractions’. However, because these ‘real abstractions’ are similarly based on the analytical claim that economic rents ‘are dependent for valuation on future revenues’ (Birch and Ward, 2024) this privileges the subjective construction of value and, as a result, it does not ask after the objective social class relations that link the proliferation of assets to labour exploitation and commodity production (see Greco and Anostopolou, 2020).

A materialist alternative

A different theoretical and empirical strategy informed by a non-circulationist, and value-theoretic, lens involves linking revenue streams back to production to trace out how the valorisation of assets tap into streams of value produced elsewhere (Purcell et al., 2020; Greco and Apostolopoulou, 2020). In this reading, premised on the independent and private form taken by the organisation of commodity production (Iñigo Carrera, 2007), value is a social and not an ontological condition of capitalism or, as Harvey (1982) has long argued, value is immaterial but objective. In this sense, assets, such as financial securities and land, while not being products of labour, can lay claim to a portion of surplus value. However, the empirical strategy is one of tracing ‘rent, profit, interest etc. back to production and the circuit of capital’ (emphasis added, Baglioni et al., 2021: 14). For this reason, rather than being projected forwards by valuation, the price of assets are a form of appearance of value. In other words, they ‘correspond to the amount of ‘capital’ that would yield the given amount of income, at prevailing rate of interest’ (Campbell, 2003: 231). When titles to these income streams are traded (capitalised) on secondary markets, they assume the sui generis commodity-form that Marx termed fictitious capital. Fictitious capital can combine two streams of income – interest and rent – which result, respectively, from the quantitative and qualitative division of surplus value captured from capital (Marx, 1991 [1894]: 486). ² Therefore, whether this includes a portion of capitalised rent from an underlying resource, property, or asset becomes an empirical question regarding the material and class basis of the revenue stream (Fine, 1979).

Therefore, overall, I am unconvinced by the author's retroactive reading of assetization into a wide array of existing scholarship. Birch and Ward claim that assetization ‘does not promise a synthesis of theoretical framework … but a clarifying lens … which will sharpen distinctions’. However, the sheer breadth of the various empirical examples of assetization – encompassing everything from housing, to infrastructure, digital platforms, IP assets and oil, to name a few – means the authors provide insightful thick descriptions but rarely substantive explanations. This serves to blunt the edges between value and valuation, as well as rent and interest. In terms of future research, this would be unfortunate because there is much to learn from clearly demarcating these differences and, in the process, recognise that different vantage points are also asking different empirical questions. Arguably, if today's heightened interest in ‘rent’ and ‘rentiership’ across human geography wants to stay attuned to the geographies of contemporary value capture and creation – through land or financial assets – then being able to specify, and differentiate, what we mean by value, and how this feeds into asset pricing, is of paramount importance.