The Unity of the Capitalist Economy and State: A Systematic-Dialectical Exposition of the Capitalist System

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In The unity of the capitalist economy and state, Geert Reuten offers a systematic exposition of the capitalist system, showing that the capitalist economy and the capitalist state constitute a unity. In its critique of contemporary economics, the book argues that in order to comprehend the capitalist system, one requires a full synthetic exposition of the economic and state institutions and processes necessary for its continued existence. A synthetic approach also reveals a range of components that are often obscured by partial analyses. In its systematic character, Reuten's work takes inspiration from Marx's provisional outline of the capitalist system in Capital, while also addressing fields that Marx left unfinished - such as the capitalist state. PART 1: THE CAPITALIST ECONOMY 1. The Capitalist Mode of Production: The Capitalist Economy in General: The Production of Monetary Value and the Enterprises’ Appropriation of Surplus-Value 2. Accumulation of Capital 3. Finance of Enterprises: The Macroeconomic Pre-Validation and Validation of Production 4. Market Interaction and Stratified Production: Competition, Cartel Formation and Monopolisation 5. The Cyclical Over-Accumulation and Destruction of Capital Business Cycles PART 2: THE CAPITALIST STATE Introduction to Part Two: The Capitalist State 6. State-Granted Capitalist Economic Rights: The Capitalist State in General 7. Furthering the Conditions for the Accumulation of Capital 8. State Expenditure and Its Finance: Effects on Macroeconomic Surplus-Value and on the Distribution of Income and Wealth 9. The Imposition of Competition: A Framework of Constraints on the Modes of Market Interaction 10. The Reach of the Capitalist State PART 3: THE INTERNATIONAL CAPITALIST SYSTEM 11. The International Capitalist System PART 4: SUMMARY AND ADDITIONS 12. General Summary and Conclusions 13. Synopsis of the Main Moments of ‘The Unity of the Capitalist Economy and State’ 14. An Outline of Systematic Dialectics – General Appendix: A Systematic-Dialectical Method for the Investigation and Exposition of the Capitalist System Detailed Table of Contents: Systematic-Dialectical Exposition by Chapter Preface General Introduction PART 1: THE CAPITALIST ECONOMY 1. The Capitalist Mode of Production: The Capitalist Economy in General: The Production of Monetary Value and the Enterprises’ Appropriation of Surplus-Value Introduction Division 0. Sociation – preparatory trans-historical notions 1§0 Sociation: abstract conditions for social continuity Division 1. Dissociation – outward bifurcation into households and privately owned enterprises 1§1 Dissociated outward bifurcation into households and privately owned enterprises Division 2. The monetary-value dimension 1§2 The trade relation 1§3 The value dimension: abstract general one-dimensional value 1§4 The monetary-value dimension – market trans-abstraction and the requirement of money as the union of measure and medium of value Division 3. Commodification – the inward bifurcation of commodities 1§5 Commodification of goods through their market transformation 1§6 Commodification of labour-capacity and commodified consumption 1§7 Inward bifurcation of commodities: the commodification of inputs and outputs ‘in total’ Division 4. Profit – duality dominated by the monetary-value dimension 1§8 Profit as the monistic driving force of enterprises Division 5. The capitalist production process – labour’s productive power and the appropriation of surplus-value Subdivision 5A. The general form of the capitalist production process: duality of the production process and dominance of the monetary valorisation process 1§9 The production process as technical process 1§10 The production process as monetary valorisation process: inward bifurcation of the production process – ideal pre-commensuration 1§11 Dominance of the monetary valorisation process over the technical process: the inwarded drive for profit Subdivision 5B. Measures and determinations: surplus-value, capital as time-grasping investment, and the production of capital 1§12 The articulation of value-added and surplus-value (integral profit) 1§13 Capital and time – the rate of integral profit and standard time 1§14 Appropriation of the productive power of labour Subdivision 5C. Grounding (sublation) of the dissociated outward bifurcation 1§15 The capitalist mode of production as solution to the dissociative ‘provision of the material elements for survival’ by enterprises Summary and conclusions List of figures chapter 1 2. Accumulation of Capital Introduction Division 1. Accumulation of capital 2§1 Profit augmentation 2§2 Management of the productive power of labour 2§3 Accumulation of capital Division 2. Expansion of labour-capacity 2§4 Accumulation of capital – the required labour-capacity and the wage rate 2§5 The rate of surplus-value: wages and the productive power of labour 2§6 Interconnection of capital accumulation, labour-capacity and the rate of unemployment Division 3. Managerial labour and the enterprise–labour relation 2§7 Managerial labour and the enterprise–labour relation Division 4. Money expansion 2§8 Money concretised as bank-issued money: money creation by banks 2§9 Domain extension and inter-bank clearing: inter-bank trust, the Clearing Bank 2§10 The private pre-validation of production by banks Division 5. Separation-in-unity of enterprises and banks 2§11 Separation-in-unity of enterprises and banks Division 6. Incorporation of enterprises 2§12 The tendency for enterprises to take the corporate form 2§13 The executive management of the corporate enterprise 2§14 Separation-in-unity of the shareholders and the executive management of the incorporated enterprise Division 7. The twofold accumulation of capital – owners of enterprises and owners of passive capital 2§15 Twofold accumulation of capital – enterprises and owners of passive capital Summary and conclusions List of figures chapter 2 3. Finance of Enterprises: The Macroeconomic Pre-Validation and Validation of Production Introduction Division 1. Finance of enterprises and finance capital 3§1 Finance of enterprises, passive finance capital and the distribution of surplus-value to financiers Division 2. Pre-validating finance by banks 3§2 The monetary circuit of pre-validating finance by banks (PVF): the pure case 3§3 Saving by by capital owners and labour: the triadic debt-credit relationship 3§4 The payment of interest by enterprises to banks Division 3. Ex-post substitution for the pre-validating finance by banks 3§5 Capital owners as financiers: dividend bearing and interest bearing finance capital 3§6 Pre-validating finance by banks as ex-post substituted for by non-banking finance capital (the RPVF) 134 part one – the capitalist economy Division 4. The foundation of banks and enterprises 3§7 The foundation of banks and enterprises Division 5. Validation of macroeconomic surplus-value by macroeconomic expenditure 3§8 Investment versus finance 3§9 Investment and saving: the macroeconomic inequality of investment and saving (I≠S) 3§10 Validation of macroeconomic surplus-value by macroeconomic expenditure Summary and conclusions Appendix 3A. Two contingencies of the finance-capital market: intertemporal trade and re-substitution trade 3A-1 The finance-capital market 3A-2 Pension funds: inter temporal trade – premiums, pension and degree of recollected surplus-value for labour 3A-3 Re-substitution trade in financial paper Appendix 3B. Contingent lending by banks to labour and to capital owners 3B-1 The lending power of banks: money dealing and interest paid by banks 3B-2 Generalisation of the form of money lending 3B-3 Lending to labour 3B-4 Lending to capital owners: finance doubling Appendix 3C. Rent as a contingent share in the production enterprises’ surplus-value 3C-1 Rent as a contingent share in the production enterprises’ surplus-value List of figures chapter 3 4. Market Interaction and Stratified Production: Competition, Cartel Formation and Monopolisation Introduction Division 1. The market and the stratified structure of production 4§1 Market interaction 4§2 Inter-market interaction: the tendency to equalisation of average inter-sector rates of integral profit 4§3 Intra-market interaction: the tendency to uniform prices 4§4 Stratification of enterprises and plants 4§5 Instrumentality of the form of market interaction Division 2. Deflationary price competition 4§6 Stratified price competition: devalorisation via a decreasing ‘unit monetary value of labour’ 4§7 Devalorisation accounted on devalued capital 4§8 Derived price decrease and derived devaluation of capital 4§9 Generalised price competition and the pace of technical change: price deflation and the tendency to stagnation Division 3. Inflationary ‘structural overcapacity competition’ 4§10 Overcapacity competition: introduction 4§11 The monetary condition of an inflationary constellation: banks’ PVF and the ‘unit monetary value of labour’ 4§12 Stratified structural overcapacity competition Division 4. The tendency to cartel formation 4§13 The tendency to cartel formation: stagnant innovation Division 5. The tendency to oligopolisation and monopolisation 4§14 The tendency to centralisation of capital Summary and conclusions List of figures chapter 4 5. The Cyclical Over-Accumulation and Destruction of Capital Business Cycles Introduction Division 1. The internal profit of enterprises: surplus-value net of its distribution to external financiers 5§1 The rate of integral profit and the rate of internal profit 5§2 The realisation of surplus-value (Π), and the internal profit (R) as a distributional result 5§3 Determinants of saving by labour and consumption by capital owners 5§4 External finance: the PVF, the RPVF and the rate of interest 5§5 Determinants of investment 5§6 A condensed macroeconomic sequence Division 2. The cyclical over-accumulation and destruction of capital 5§7 The phase-wise stratified cyclical movement of capital: preliminaries 5§8 Cyclical movement (1): from expansion to stagnation 244 part one – the capitalist economy 5§9 Cyclical movement (2): from stagnation to contraction and renewed expansion Summary and conclusions Appendix 5a. On the particular structural background of the 2008 crisis Introduction and synopsis 5A-1 The general constellation 5A-2 From declining savings out of wages to ‘colonization of the future’ 5A-3 Conjunction of interests 5A-4 Course of the 2008 crisis and its crisis-ridden aftermath 5A-5 Problem of stagnation not resolved (2018) 5A-6 Modification of the ‘normal’ course of the business cycle Appendix 5B. stratified production and Marx’s unfinished theory of the cyclical movement of capital List of figures chapter 5 PART 2: THE CAPITALIST STATE Introduction to Part Two: The Capitalist State 6. State-Granted Capitalist Economic Rights: The Capitalist State in General Division 1. dissociation – outward bifurcation into households and privately owned enterprises 6§1 Dissociated outward bifurcation into households and privately owned enterprises Division 2. capitalist economic entitlement claims as granted by the state in the form of rights: the capitalist state 6§2 Capitalist economic entitlement claims 6§3 The claim of entitlement to existence 6§4 The Capitalist State: capitalist economic entitlement claims in the form of granted rights Division 3. granted rights in the form of law and the legitimation of the state 6§5 Legitimation in compliance 6§6 The state and the putative general interest 6§7 The state’s self-imposition as impartial institution; versus the state as constituting vis-à-vis the capitalist economy a ‘separation-in-unity’ within the capitalist system 6§8 The positing of granted rights in the form of law – taking position: legal rights as political rights 6§9 Arbitration and sanctioning Division 4. the capitalist economic rights framework 6§10 Necessary categories of the legal right to property 6§11 The legal right to employ labour as combined with the employer’s legal right to appropriate the surplus-value produced by that labour 6§12 The general interest and ‘objective class’ interests Division 5. the rights to existence framework 6§13 Legal rights to existence 6§14 Protection of the consumer, the climate and the environment: restrictions on commodity production 6§15 Labour protection regarding labour time and occupational safety and health: restrictions on the production process 6§16 Delegation of the specific regulation and of the supervision of its execution: purification Division 6. the public security framework 6§17 ‘Rights’ (allowance rights) and ‘positive rights’ 6§18 The public security framework: upholding the legal economic and existence rights Summary and conclusions Appendix 6A. empirical data in chapters 7–10: the oecd-21 average 6A-1 Empirical reference to ‘capitalism’ as exemplified by the OECD-21 ‘strongest version’ 6A-2 Empirical reference to the arithmetic average of the OECD-21 6A-3 Data sources for the OECD-21 List of figures chapter 6 7. Furthering the Conditions for the Accumulation of Capital Introduction Division 1. The state’s action radius predicated on its furthering the conditions for capital accumulation 7§1 The material existence of the state: taxation and the state’s action radius 7§2 The fundamental conflict of taxation 7§3 The tax base, the potential action radius of the state, and the state’s furthering of the conditions for the accumulation of capital Division 2. The monetary framework 7§4 Imposition of the monetary standard of the Central Bank 7§5 Money and its grounding in monetary legislation 7§6 Conflicts of monetary regulation 7§7 Delegation of the specific regulation, of the supervision of its execution and of monetary policy to the central bank: purification from conflict 7§8 The objective of reaching creeping inflation 7§9 Banking crises and the movement to ‘too big to fail’-banks Division 3. The labour-capacity framework 7§10 Minimum wage: the reproduction of the current labour population 7§11 Delegation to minimum wage commissions or councils 7§12 Temporary unemployment benefits 7§13 Labour population growth 7§14 Public education Division 4. The infrastructural framework 7§15 Infrastructure 7§16 Fundamental technology research Division 5. The social security framework 7§17 Legitimation: compliance-dependent social security transfers Division 6. Separation of the state’s administrative and judiciary branches 7§18 Arbitration and sanctioning – legitimising assignment to a separated off Judiciary, as a separation-in-unity with the main body of the state Division 7. Separation of the state’s administrative and deliberative branches 7§19 Taxation and the overriding of property right 7§20 Conflicts of the form of taxation 7§21 The worrying or reassuring state’s share in the economy 7§22 General conflicts of right and of legitimation in compliance 7§23 Conflict modification – legitimising assignment to a separated off Deliberative, as a separation-in-unity with the main body of the state Summary and conclusions Appendix 7A. Data and data sources of the graphs in chapter 7 List of figures chapter 7 8. State Expenditure and Its Finance: Effects on Macroeconomic Surplus-Value and on the Distribution of Income and Wealth Introduction Division 1. State production and state expenditure 8§1 Production in monetary terms by state-employed labour (‘civil servants’) 8§2 The state’s action in terms of state expenditure 8§3 State production in terms of quantity of employment: state employment Division 2. The finance of the state: taxation and other main forms of finance 8§4 Taxation and other main forms of finance of the state Division 3. The effect of state expenditure on the enterprises’ production and validation of surplus-value: macroeconomic expenditure 8§5 State expenditure and production of enterprises 8§6 State expenditure and macroeconomic surplus-value Division 4. The combined effect of state expenditure and taxation on the enterprises’ after tax surplus-value 8§7 A profits tax: taxation of surplus-value 8§8 The effect of a fiscal deficit of the state on the after tax surplus-value Division 5. Forms of taxation: the distribution of income and wealth 8§9 The finance of social security: taxes and social security contributions 8§10 Forms of taxation 8§11 Forms and design of taxation, and their legitimation in compliance to a particular distribution of income 8§12 The after-tax resulting distribution of wealth Summary and conclusions Appendix 8.A. Data and data sources of the graphs in chapter 8 List of figures chapter 8 9. The Imposition of Competition: A Framework of Constraints on the Modes of Market Interaction Introduction Division 1. The imposition of competition: a framework of prohibitive regulation of the enterprises’ market interaction 9§1 The state’s manifestation in competition policy: the engendering a particular mode of existence of the capitalist system 9§2 The imposition of competition: the fairy tale’s ‘free market’ turned into ‘unfree free markets’ 9§3 The proclamation of moral economic norms 9§4 Execution of competition regulation as delegated to an ‘independent’ market authority: purification from conflict Division 2. Constraints on the mode of competition and (potential) constraints on the mode of capital accumulation 9§5 Precluding a deflationary constellation: creeping inflation 9§6 The movement to oligopolies as entities being too big to fail and (potential) constraints on the mode of capital accumulation via its capping Summary and conclusions Appendix 9A. Too big banks: too big to fail and too big for supervisors 9A-1 Centralisation and concentration of capital within the banking sector, and characteristics of big banks 9A-2 Big banks: too big to know what is going on 9A-3 Socials cost of an encompassing banking crisis, and the temporary decrease in bank profit rates List of figures chapter 9 10. The Reach of the Capitalist State Introduction Division 1. The size of state expenditure and its effect on the amplitude of the capitalist economic cycle 10§1 The size of the state: state expenditure as mitigating economic recessions 10§2 State policy in recessions versus depressions Division 2. The increasing size and complexity of regulation 10§3 Regulation: laws and delegated regulation 10§4 A conceptual outline of the reach of regulation 10§5 Quantity and density of regulation: (too) simple measures 10§6 Complexity of regulation: the combination of complication, interweaving and field fusion 10§7 Change: the tendency to increasing complexity of regulation 468 part two – the capitalist state Division 3. The capitalist state’s hard core and its manifestation in expenditure as quantitatively dominated by social security transfers 10§8 The manifestation of the state: the actors’ experience of the state’s existence 10§9 The necessary state expenditure on the Hard Core and Inspectorates, and the contingent military and interest expenditure 10§10 Expenditure on the monetary and labour-capacity frameworks 10§11 Expenditure on the infrastructural framework 10§12 Expenditure on social security as connected with the development of the accumulation of capital 10§13 ‘Other state expenditure’: contingent expenditure and required expenditure on especially ‘too big to fail’ banks Division 4. The vulnerabilities of the state’s reach 10§14 Vulnerabilities and impossible necessities Summary and conclusions Appendix 10.A. Data and data sources of the graphs in chapter 10 List of figures chapter 10 PART 3: THE INTERNATIONAL CAPITALIST SYSTEM 11. The International Capitalist System Introduction to part three and chapter 11 Division 1. The international mode of existence of the capitalist system 11§1 The exposition of the international capitalist system: programmatic delineations and method 11§2 The world’s nations and their economic ranking in terms of the per capita income Division 2. The tendency to international trade 11§3 The tendency to international trade 11§4 The state-granted right to export and import 11§5 The effect of international trade on the sector-structures of production 11§6 The (uneven) effect of international trade on surplus-value 11§7 International trade: ‘structural national conservation of capital accumulated’ 11§8 The unsustainability of (international) distance trade Division 3. The tendencies to international movement of capital and to international migration of production 11§9 The tendency to the international movement of capital 11§10 The state-granted right to the international movement of capital 11§11 International movement of capital and the tendency to the international migration of production 11§12 The constellation of an immigrant state as condition for the international migration of production – the perspective of potentially migrating enterprises 11§13 International migration of production: diversity of conflicting interests 11§14 International migration of production: rupture of the ‘structural national conservation of capital accumulated’ 11§15 Implications of the tendency to international migration of production for the constellation of capitalist nations Summary and conclusions Conclusions in reference to the main conclusions of Chapter 10 Appendix 11.A. Additional detailed graphs and data information List of figures chapter 11 PART 4: SUMMARY AND ADDITIONS 12. General Summary and Conclusions 1 The starting point: dissociated outward bifurcation (1D1 and 6D1) 2 Capitalist production and its grounding by the capitalist state (Chapters 1 and 6) 3 Accumulation of capital and its furthering by the state (Chapters 2 and 7) 4 The finance of enterprises, the expenditure and finance of the state, and their effect on the macroeconomic validation of surplus-value and on the distribution of income and wealth (Chapters 3 and 8) 5 The concrete modes of manifestation of the enterprises’ market interaction (Chapters 4 and 9) 6 The concrete manifestations of the capitalist economy and state (Chapters 5 and 10) 7 The international mode of existence of the capitalist system (Chapter 11) 8 General conclusions (Chapter 11 in reference to Chapter 10) 13. Synopsis of the Main Moments of ‘The Unity of the Capitalist Economy and State’ 14. An Outline of Systematic Dialectics – General Appendix: A Systematic-Dialectical Method for the Investigation and Exposition of the Capitalist System Introduction Division 1. The method of systematic-dialectical exposition in brief A§1 Aim and synopsis Division 2. Research prior to systematic-dialectical exposition A§2 Object totality A§3 Research prior to SD exposition: analysis versus synthesis Division 3. Systematic-dialectical exposition – general principles A§4 Systematic in contrast with historical order, and dialectical moments A§5 Dialectical ‘moments’ A§6 Definition and conceptual progress A§7 Presumptions and pre-positions (contrary to assumptions) A§8 Synthesis and the role of analysis A§9 Immanency and immanent critique Division 4. Systematic-dialectical exposition A§10 The systematic starting point A§11 Grounding moments (conditions of existence) A§12 Manifestations: synthetic moments of concrete manifestation A§13 Necessity and contingency A§14 Tendencies: dynamic constituents