The unity of the capitalist economy and state Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access Historical Materialism Book Series Editorial Board Sébastien Budgen (Paris) David Broder (Rome) Steve Edwards (London) Juan Grigera (London) Marcel van der Linden (Amsterdam) Peter Thomas (London) volume 186 The titles published in this series are listed at brill.com/hm Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access The unity of the capitalist economy and state A systematic-dialectical exposition of the capitalist system By Geert Reuten LEIDEN | BOSTON Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access This is an open access title distributed under the terms of the prevailing CC-BY-NCND License at the time of publication, which permits any non-commercial use, distribution, and reproduction in any medium, provided no alterations are made and the original author(s) and source are credited Library of Congress Cataloging-in-Publication Data Names: Reuten, G.A., author Title: The unity of the capitalist economy and state : a systematic-dialectical exposition of the capitalist system / by Geert Reuten Description: Leiden ; Boston : Brill, [2019] | Series: Historical materialism book series, ISSN 1570-1522 ; Volume 186 | Includes bibliographical references and index Identifiers: LCCN 2018055737 (print) | LCCN 2018060005 (ebook) | ISBN 9789004392809 (ebook) | ISBN 9789004392793 (hardback : alk paper) Subjects: LCSH: Capitalism Classification: LCC HB501 (ebook) | LCC HB501 R4525 2019 (print) | DDC 330.12/2–dc23 LC record available at https://lccn.loc.gov/2018055737 Typeface for the Latin, Greek, and Cyrillic scripts: “Brill” See and download: brill.com/brill‑typeface ISSN 1570-1522 ISBN 978-90-04-39279-3 (hardback) ISBN 978-90-04-39280-9 (e-book) Copyright 2019 by Geert Reuten Published by Koninklijke Brill NV, Leiden, The Netherlands Koninklijke Brill NV incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi, Brill Sense, Hotei Publishing, mentis Verlag, Verlag Ferdinand Schöningh and Wilhelm Fink Verlag Koninklijke Brill NV reserves the right to protect the publication against unauthorized use and to authorize dissemination by means of offprints, legitimate photocopies, microform editions, reprints, translations, and secondary information sources, such as abstracting and indexing services including databases Requests for commercial re-use, use of parts of the publication, and/or translations must be addressed to Koninklijke Brill NV This book is printed on acid-free paper and produced in a sustainable manner Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access Contents Systematic-dialectical exposition by chapter Preface viii General introduction vii Part The capitalist economy The capitalist mode of production The capitalist economy in general: the production of monetary value and the enterprises’ appropriation of surplus-value 27 Accumulation of capital 83 Finance of enterprises The macroeconomic pre-validation and validation of production Market interaction and stratified production Competition, cartel formation and monopolisation 199 The cyclical over-accumulation and destruction of capital Business cycles 243 133 Part The capitalist state Introduction to part two: the capitalist state 295 State-granted capitalist economic rights The capitalist state in general 297 Furthering the conditions for the accumulation of capital 331 State expenditure and its finance Effects on macroeconomic surplus-value and on the distribution of income and wealth 385 Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access vi 10 contents The imposition of competition A framework of constraints on the modes of market interaction 441 The reach of the capitalist state 467 Part The international capitalist system 11 The international capitalist system 525 Part Summary and additions 12 General summary and conclusions 575 13 Synopsis of the main moments of ‘The unity of the capitalist economy and state’ 597 14 An outline of systematic dialectics – General appendix A systematic-dialectical method for the investigation and exposition of the capitalist system 601 Bibliography 627 List of symbols and abbreviations in order of appearance 651 List of symbols and abbreviations in alphabetical order 659 List of equations by chapter 666 Glossary of field-specific terms 676 Index of names 693 Index of subjects 698 Index of main empirical graphs and tables 724 Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access Systematic-dialectical exposition by chapter Chapters 1–5 set out an increasingly concrete exposition of the capitalist economy: first its conditions of existence and next its manifestations The same applies to Chapters 6–10 for the capitalist state The reader may wish to read the book in this order However, Chapter equally provides the grounds of Chapter As does Chapter for Chapter 2, and so forth The book has been written in such a way that the reader might also read the book in this zigzag order [1;6], [2;7] and so on This is further amplified on in the General Introduction The systematic core of the text makes up about half of the book The rest consists of ‘explications’, ‘amplifications’ and ‘addenda’ of/on the core text, variously serving the less advanced and the advanced reader in a field – these can be read according to the reader’s requirements, or skipped without losing the main thread of the core text Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access Preface This book provides a systematic outline of the constellation and functioning of the capitalist system It is an exposition of the relations, institutions and processes that are necessary for the continued existence of the capitalist system – that is, the capitalist economy as interconnected with the capitalist state In its systematic character, the book is inspired by Marx’s incomplete synthetic outline of the capitalist system in his Capital – incomplete because that work did not reach the capitalist state The latter is dealt with in Part Two of the current book Part One, on the capitalist economy, is the result of a critical appraisal of current orthodox and heterodox economics, and of the systematic problems and gaps of Capital – the latter especially in hindsight of the development of the contemporary monetary and financial institutions Without underestimating the merits of analyses of partial components of the capitalist system (such as those regarding the labour market, infrastructure or monetary policy), the writing of this book derives from the insight that comprehension of the capitalist system is (also) gained from a full synthetic outline of the system by interconnecting all of its main components Such a synthetic approach also sheds light on the components that are often obscured by a partial analysis The book is addressed to scholars who share this insight, or are at least curious about it More specifically, it is written for scholars and advanced students in the social sciences (political economy, economics, political science, social geography, sociology, and the philosophy of these sciences) Geert Reuten June 2018 Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access General introduction Contents A Aim and outline of the book General aim and outline The starting point of the book: dissociation Chapter outlines B Intellectual inheritance C Systematic dialectics: methodological introduction 10 C§1 Limitations of mainstream methods 11 C§2 ‘System’ 13 C§3 Presumptions and pre-positions (contrary to assumptions) 13 C§4 Systematic-dialectical exposition 15 Two reading strategies 17 The empirical domain of the book 17 C§5 Systematic order versus historical order 18 C§6 Immanent critique 19 D A note on mathematics and the readership 19 E Format of the book and internal references 20 Appendix A note on historical dialectics: ‘historical materialism’ 21 Acknowledgements 22 © Geert Reuten, 2019 | doi:10.1163/9789004392809_002 This is an open access chapter distributed under the terms of the prevailing CC-BY-NC-ND License at the time of publication Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access A general introduction Aim and outline of the book General aim and outline Much of the conventional research in economics focuses on partial aspects of society, such as its labour market or financial markets – often also in abstraction from the state and its policies The aim of this book is to systematically identify the interconnections and manifestations of the full range of those economic and political relations, institutions and processes that are necessary for the continued existence of the capitalist system – that is, the capitalist economy together with the capitalist state In doing so, the reader will be equipped with an outline of the constitution and functioning of the capitalist system Any science, and any scientific project, begins with certain presumed facts and questions I will briefly outline some of my questions To some extent this is of limited relevance, because the results of scientific investigation often have repercussions and implications that go beyond their initial remit Within capitalist society we observe social divisions along the lines of: • rich – poor • powerful – powerless • employed – unemployed • satisfactory work – unsatisfactory work These evoke three questions First, why are these divisions apparently enduring characteristics of the capitalist system? Are they conditions for the continued existence of the capitalist system? Second, if so, how these relate to other conditions that are required for the continued existence of the system? Third, how does the actual institutionalisation of these conditions determine the actual functioning of the system such that it reproduces these divisions? In brief the challenge is to comprehend the capitalist system Conscious change within and beyond the capitalist system requires its comprehension – in this I am an ardent pupil of Marx To answer these questions, we need to investigate the interconnection between a wide range of elements that constitute that system The method that I adopt in this book, ‘systematic dialectics’ (see section C), is well suited to the comprehension of complex systems composed of many interdependent constituent parts Part One of the book presents the ‘capitalist economy’, and Part Two the ‘capitalist state’ Part Three considers the international constellation of capitalist economies and states Each of the subsequent chapters of Part One has its counterpart in each of the subsequent chapters of Part Two Geert Reuten - 978-90-04-39280-9 Downloaded from Brill.com07/08/2019 08:47:56AM via free access ... introduction vii Part The capitalist economy The capitalist mode of production The capitalist economy in general: the production of monetary value and the enterprises’ appropriation of surplus-value... necessary for the continued existence of the capitalist system – that is, the capitalist economy together with the capitalist state In doing so, the reader will be equipped with an outline of the constitution... relations: enterprises claim ownership of much of the earth, and they claim ownership of the means of production other than the earth The rest of Chapter 1, and indeed the entire book, sets out how this