Contents
Introduction
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
Introduction
The exposition started in Chapter 1 with the concept of ‘dissociated bifurcation of households and privately owned units of productions’. The rest of that chapter – and Chapters 2–3 – presented the capitalist way of ‘sublating’ the outward bifurcation (that is, stages of partially resolving the bifurcation without the bifurcation itself being undone – 1§1, heading 4). The outcome – Chapters 1 through 5 – is a constellation that often appears problematical (presumably also from the point of view of enterprises and owners of financial titles), though one that apparently may have seemed a systematic reproducible whole.
However, it will be shown in Division 2 in general terms (see its introduction below) – and more concretely throughout the chapters to come – that the capitalist economy cannot exist without the capitalist state. Thus the grounding of the starting point so far is an insufficient one, whence the exposition must be extended – throughout Part One extension in case of such insufficiency has always been the dialectical procedure.
As the starting point of the total exposition (Parts One and Two) is the capitalist economy and its dissociated bifurcation, the systematic exposition of the capitalist state starts in Division 1 again with the capitalist economy’s bifurcation. This is all the more opportune, because in hindsight, as we will see, key ‘insufficiencies’ that cannot be resolved within the capitalist economy are already prevalent at the very early stages of the capitalist way of sublating the bifurcation.
For these systematic reasons the starting points of 1D1 and 6D1 coincide, although the presentation in Division 1 of the current chapter will be an abbreviated one.
Division 2 introduces the state into the exposition. In Part One it was all along implicit that the actors (enterprises and households) have the freedom to act as outlined. Implicitly they claimed to be entitled to act as outlined and that these claims (for example, claims to entitlement of property) are respected by the other actors. Division 2 sets out that the institutions of the capitalist economy by themselves cannot guarantee the actualisation of such claims, whence an extraordinary institution, the state, is required to grant these claims in the form of rights.
Division 3 presents a first set of major abstract-general conditions of existence of the state, especially regarding the form of the state’s operation. The first one of these is that the state must gain legitimation for its (non-)actions. Further conditions ground this first one.
Division 4 presents a categorisation of the required capitalist economic rights: legal rights to property and to the employment of labour. At the level of the state these constitute the primary condition of existence for the exposition in Chapter 1.
Scheme 6.1
Systematic of state-granted capitalist economic rights – the capitalist state in general (outline Chapter 6)
Legend
| ↡ |
grounded in (conditioned by) downward moment |
| ↠ |
grounded in juxtaposed moment |
As economic rights are futile without legal rights to existence, Division 5 presents a categorisation of the latter.
Granted legal rights (6D3) are empty without their upholding. The final Division 6 presents the upholding of these rights in ‘public security’, which includes, among others, the police and public prosecution.
It should be kept in mind that – in line with the systematic-dialectical method as outlined in the General Introduction – this chapter is about actual right and law only to the extent that rights are necessary (an absolute condition) for the continued existence of a capitalist economy – now the capitalist system (including the state). On top of these, there are many rights that are morally or culturally important, but that are nevertheless contingent from the point of view of the reproduction of the capitalist economy. Throughout this book, as indicated, such contingencies are ignored.
Scheme 6.1 outlines the systematic of the moments presented in this chapter.
Division 1. Dissociation – outward bifurcation into households and privately owned enterprises
As the starting point of the total exposition (capitalist economy and state) is the capitalist economy, the systematic exposition of the capitalist state starts with the capitalist economy’s dissociated outward bifurcation (here briefly summarised). Thus this division is systematically analogous to 1D1. See also the Chapter Introduction.
6§1 Dissociated outward bifurcation into households and privately owned enterprises
The capitalist economy (and the capitalist system generally) is characterised by the dissociated outward bifurcation between households and privately owned enterprises, the latter being private owners of appropriated earth and of means of production. Generally, enterprises are not owned by the labourers that carry out the production (see 1§1-e, or the Glossary, for the term ‘general’). Hence capitalist society is characterised by an extended outward bifurcation into, on the one hand, the owners of private enterprises, and, on the other, the – generally non-overlapping – labourers carrying out the production. Along with these private property relations, the enterprise appropriates the product produced by labour – in whatever way, and for what, and to what extent, labour receives a ‘compensation’ for its production.
Apparently this constellation is dissociative, even if we know that in reality the bifurcated poles are bridged. The object of the exposition is to comprehend the range of this apparent dissociation, to comprehend the extent of its actual resolution, and to set out the necessary conditions of existence (or grounds) of the starting point above.
6§1-a Explication. The twofold grounding of the starting point
Because the starting point of the total exposition (capitalist economy and state) is the capitalist economy, the grounding of the starting point (1D1) is systematically a twofold one – alluded to in the Introduction. Scheme 6.2 visualises this twofoldness.
Scheme 6.2
The twofold grounding of the starting point
Legend
| = |
similar |
| ↡ |
grounding in downward moments |
| ↠ |
grounding in juxtaposed moments |
Division 2. Capitalist economic entitlement claims as granted by the state in the form of rights: the capitalist state
In this book’s systematic- rather than historical-dialectical exposition, the existence of the state is presumed (General Introduction, C§3). Pending the exposition, this is methodologically yet an abstract existence. This division sets out why and when the state in a capitalist system is to be characterised as a ‘capitalist state’.
6§2 Capitalist economic entitlement claims
In the exposition of the capitalist economy, it was implicit that dissociation and its grounding requires the private enterprises and the households to have the freedom to act as set out in Chapter 1 and later chapters. Freedom, however, is utterly abstract. These freedoms are therefore posited as specific claims of being entitled to act as set out. The core of these are:
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first, claims of entitlement to private property in the earth;
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second, claims of entitlement to private property in means of production other than for production by the claimant;
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third, claims of entitlement to employ labour as combined with the appropriation of the surplus-value produced by that labour.
Together I call these in brief the ‘capitalist core economic entitlement claims’ (concretised in 6D4).
6§2-a Explication. Freedom and compulsion
The private enterprises and the households require the freedom to act as set out in Part One. However, the freedoms that are necessary for capitalism also result in a structure of compulsion. We have seen that the capitalist economy is structurally determined by the monetary-value dimension and the forces deriving from it.
Predicated on the dissociative bifurcation (1D1), economic actors are enforced to trade in order to survive (consumer goods, inputs, outputs).
To the extent that workers own no means of production, they are forced to sell their labour-capacity to any enterprise (1§6). Hence their freedom is restricted to selling it to company i or j – they are materially not free to sell at all, because they have no alternative. To the extent that workers command restricted monetary reserves, they are, moreover, forced to sell their labour-capacity immediately (affecting their bargaining position). Further, depending on the growth patterns (2D2) or the cyclical state of the economy (5D2), the freedom to sell labour-capacity may even be void altogether (unemployment).
Finally, a large number of restrictions and forces operate on any enterprise. For example, their position in the stratification of enterprises (4§4) may enforce them to acquire extra finance capital; or, the cyclical restructuring of capital may mean that enterprises lose property and/or are enforced to merge or be taken over (5§9).
It follows that whereas the existence of the capitalist economy requires economic actors to have economic freedoms, the same capitalist economy negates freedom in force, compulsion and restriction. There is no general freedom, but rather an asymmetric freedom, or, conversely, asymmetric compulsion.
It may be argued that any association into which persons enter at least constrains freedom (for some marriage might be an example). Nevertheless, if one engages freely and consciously in association, its constraints are not compulsive. However, the institutions of the capitalist economy are not based on a freely willed social contract – even when perhaps a majority would consent to these institutions.
6§2-b Amplification. Interconnection of the three claims to entitlement
Of the three core claims set out in 6§2, claim 3 is the key one. The ownership of means of production (claim 2) is a precondition for any production; however, claim 3 (appropriation of the surplus-value produced by the labour employed) requires not merely some ownership in means of production, but rather such ownership corresponding to the amount of labour employed.1 (Self-employed workers or worker cooperatives would not require this extra claim, because they have no employees, and hence require no such means of production.)
Of the first two claims, the first is the most far-reaching one. Much of the earth functions as means of production (hence this is, more specifically, included under claim 2). Given that the earth cannot be expanded (like production can be expanded) it is in fact a monopoly claim for the category of owners of land and other natural resources. (This would not be so if, for example, land were rented from the collective world population in some institutionalised form.)2
6§3 The claim of entitlement to existence
Economic entitlement claims (6§2) are futile without a claim of entitlement to existence. Thus the former are necessarily grounded in the latter. (When actors are not free from violence regarding their person, the exercise of their economic claims is barren.)
6§4 The capitalist state: capitalist economic entitlement claims in the form of granted rights
The claims to the capitalist core economic entitlements and to existence entitlement are necessary to the capitalist economy (6§2, 6§3). However, within the economy there is no institution guaranteeing these claimed entitlements. Within the economy, dominated by the monetary-value dimension, commodification and the criterion of the rate of integral profit (1§13), these claims can be no more than moral strivings – perhaps conflicting ones – in face of the structure and forces of that economy (Part One). So we have a fundamental continuity impediment: the actualisation of these claimed entitlements is necessary and impossible within the economy.3 Hence the capitalist economy cannot stand on its own.
The state is an institutional constellation granting (constructing) these claims in the form of rights. It demarcates these granted rights and it upholds them. In doing so, the state grounds the actual mode of existence of the capitalist economy.
To the extent that the state actualises particularly the capitalist economic entitlement claims (listed in 6§2) as granted rights, the state is identified as the capitalist state.
6§4-a Explication. The state, agents of the state and moral norms of the latter
Throughout Part Two, I use the term state, or capitalist state, denoting the state as institution. As much as possible I avoid notions of ‘agents of the state’, or ‘state actors’. This implies that the reference is mainly to the state in its effect as laid down in legislation and other regulation, rather than to processes leading to that effect, including the motives of agents of the state. Therefore I also avoid using the term ‘government’, which often has a connotation of a group of people staffing the state. Emphasising the state as institution in reference to its effects also implies that I am not concerned with the moral or ethical norms of agents of the state. I am not denying that state officials might be intrinsically motivated by these norms. I am also not denying that they might not.4
6§4-b Explication. State and nation: the systematic order of the exposition
‘The state’ is usually associated with a national context. Nationality and geography will be introduced only in Part Three (Chapter 11). In terms of nationality and geography, the current level of the exposition is to be associated with one capitalist country operating in isolation, or alternatively with world universality without national borders.
6§4-c Explication. Rights presented in this chapter
The rights presented in this chapter are restricted to rights that are necessary for the existence of the capitalist economy. Many rights that have been enacted, for example, those of free speech or assembly, are contingent to the existence of the capitalist economy (which does not qualify these as ‘unimportant’).
6§4-d Addendum. ‘Society’ vis-à-vis the capitalist economy
In this book the term ‘society’ is used only in 1D0 (sociation), in 1D1 (dissociation) and in the current division. Quite apart from the introduction of the state in the current chapter and its further concretisation in the following chapters, I thus far presented a reduced account of capitalist society – that is, the capitalist economy (Chapters 1–5). The point is that I do not intend to present concrete society in its entirety. The aim is to present the necessary conditions of existence of the capitalist economy; indeed the state is a major condition for it.
Gender, racial and sexual diversity, the arts, religion, sports and so on, all comprise key elements of social life hitherto. However, in terms of the existence of the capitalist economy, these social elements are contingent. However, this again does not imply that these are not affected by the monetary-value dimension. We know all too well that they are.
On the other hand, such social elements may well assist or support the reproduction of the capitalist system. (Marx, for example, once called religion the opium of the people. Later, Max Weber argued that Protestantism, especially Calvinism, propelled the capitalist ethos.) Many cultural and political constellations are compatible with capitalism – e.g. liberalism, conservatism, religious fundamentalism, corporatism or fascism. All this is not the object of the current investigation.
6§4-e Addendum. The state: systematic exposition and history
As always, considerations of systematic order are different from considerations of historical order.
Regarding history Hirsch (2005) argues that ‘the state’ emerges with the emergence of capitalism, and that it is wrong to ‘naturalise’ the state by extending its history. Historically feudal domains were the unity of a governing entity and an entity including exploitative social-economic power (only in hindsight might these perhaps be discerned as an entity that includes an ‘economy’). Historically the capitalist economy bifurcated away from the feudal domain (in my terminology), and became a power in itself – initially in opposition to the feudal domain. The feudality as a governing entity then collaborated with the capitalists because it had to. Historically the feudal entity, including (in hindsight) a governing branch, was gradually transformed into a capitalist state – as mediated by the mercantile state (see the qualifications by Hirsch 2005).
By implication it is hard to imagine how a capitalist economy could ever have emerged without a feudal polity de facto sustaining that emerging economy. The ‘thought experiments’ about the ‘state of nature’ by British classical political philosophy from Hobbes (1651) to Smith (1776) concluded that ‘civil society’ has no existence without the state – that is, unless we allow for a ‘war of all against all’, as Hobbes phrased it. Smith (1776) writes: ‘Where there is no property … civil government is not so necessary.’ And: ‘Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.’5
The current systematic exposition bypasses the collaboration, etc. and presents a, so to speak, ‘fresh’ state (devoid of feudal remnants and so on). The existing state is exposed insofar as it is necessary for the capitalist economy.
Division 3. Granted rights in the form of law and the legitimation of the state
In this division the state is grounded in five conditions of existence regarding the form of the state’s operation. These are listed in Scheme 6.3. The reader should be warned that at this point (this division) this is a grounding in fairly abstract-general terms. The key concept of ‘legitimation’ of the state, will only gradually gain content in the current and in the next chapter.
Scheme 6.3
The initial conditions of existence of the state: the form of its operation
6§5 Legitimation in compliance
The capitalist state as an institutional constellation positing particular entitlement claims in the form of granted rights (6§4). The first condition of existence of the state is that it is legitimated in the compliance of a vast majority of the actors. The state must continuously seek this legitimation – outlined in general terms in the remainder of this division.
6§5-a Explication. Seeking legitimation: general theoretical position regarding the capitalist state
In very broad terms the exposition in this chapter, and that of legitimation in particular, is not a normative one (a main strand being ‘social contract theory’) but rather a descriptive one (on the distinction see Peter 2016, section 1).
This amplification briefly outlines the general theoretical position that underlies the exposition in this chapter in contrast with ‘social contract theory’ from which I distance myself. Much of political philosophy and political theory is in some way based on a ‘social contract theory’. The early formulation goes back to Hobbes, Locke and Rousseau, in works published between 1651 and 1762.6 In brief: Given opposing interests and continuous conflicts among the people, the institution of the state (in feudal times a ‘sovereign’) is conceived of as the result of a ‘social contract’ between ‘the’ people. In the social contract view they ‘will’ and submit to the authority of the state (or a sovereign) in order to mitigate or overcome conflict.
The position in this chapter (and ones that follow) is, first of all, that there cannot be a ‘pre-state’ capitalist constellation from which such a contract and ‘general willed’ state could be seen to emerge. The feudal economy and the feudal governing entity gradually transformed into a capitalist economy and state (see 6§4-e). However, amid this process, and continually within full-fledged capitalism (that is, including capitalist production), it is the state that has to seek its legitimation (and hence the legitimation of the capitalist system). Thus this position is rather the reverse of a social contract theory. The state’s seeking legitimation will be made explicit, albeit still in abstract-general terms, in the following sections. It will be further expanded in Chapter 7.
6§5-b Amplification. Legitimation and authoritarian regimes
The upshot of 6§5 is that compliance, at least, is necessary. At this level, however, compliance is abstract-general, thus any particularisation is premature – that is, there may be various ways to gain compliance. The abstract-general level of the exposition demands refraining from linking legitimation and compliance to a contemporary constellation of the reader’s preference – perhaps some form of political democracy. As history has shown, the capitalist system is compatible with democracy (including abuses in the shape of fraudulent elections and/or presidents elected by only a minority of the actual voters) as much as with corporatism and fascism. In all cases the point is merely that, for example, the majority or minority presidency or the fascist leader has to gain the compliance of the majority of the people. Even a non-elected dictator has to seek (and obtain) the compliance of the majority of actors. That is, ultimately: in periods of transition, compliance may be weak.
6§6 The state and the putative general interest
The state’s legitimation in the compliance of the actors (6§5) is ultimately grounded in the gaining of that compliance by positing its actions in terms of the putative general interest.7 At this point of exposition these actions regard the positing of certain claims in the form of granted rights (6§4). ‘In the name of’ the general interest, the state seeks legitimation to uphold (its definition of) these granted rights. Conversely it posits the rights as being in the general interest. (That is, of what it conceives as the general interest.) This framing of these rights being in the general interest is particularly precarious when granted rights conflict, so that the state must prioritise the one right over the other. Conflicts of interest are again resolved in terms of the putative general interest.
Whereas ‘general interest’ is inherently abstract, it is in actual practice, and recurrently so, offered by the state as the legitimising basis for its (non-)actions. Nevertheless, by any new (non-)action the state further concretises its implicit concept of the general interest, which is again defended in reference to the general interest, and so on.
Even if and when the state’s reference to the general interest is abstract, this general interest is ultimately the de facto continual existence of the capitalist system (ultimately the granting and upholding of the three core economic entitlement claims in the form of granted rights – 6§2 and 6§4). This ‘de facto’ is falsifiable, and it would be falsified if the state no longer granted these claims as rights.
6§6-a Explication. Legitimation and implicit actions of the state
So far, the actions of the state merely regard the positing of certain claims (6§2–§6§3) in the form of granted rights. Other actions of the state are still implicit. In the remainder of this chapter and in the next, these actions will be further extended. Legitimation in terms of the putative general interest also applies to these extended actions, albeit implicitly.
6§6-b Explication. The undefined general interest
In the context of legislation (properly introduced in 6§8), the state’s reference to the general interest is circumventing and circular. This is what it is. No definition of it is provided by the state (even if we can infer that implicitly it is ultimately defined by the continual existence of the capitalist system). The state may posit such a reference in general preambles. However, when it comes to the defence of laws or law proposals in actual practice, such reference is also the last straw when there are insufficient arguments for particular legislation.8
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
The state’s recurrent reference to the ‘general interest’ for its seeking of legitimation (6§6) requires that it (putatively) positions itself above and outside the opposing particular economic interests. Thus a condition of existence of the legitimation in terms of the general interest is that the state imposes itself (putatively) as an impartial extraordinary social institution, unlike all other social institutions.9
In this sense the state is an institution separate from the economy. However, given that the state de facto grants the core economic claims in the form of rights (6§6), it constitutes vis-à-vis the capitalist economy a separation-in-unity within the capitalist system.
Possible and potential conflicts between entitlement claims, as well as between rights granted by the state, are not overcome by this separation-in-unity; rather, such conflicts are settled by the state as extraordinary social institution, in some mode of (perhaps still conflicting) existence.10
6§7-a Explication. The state’s ‘separation-in-unity’ within the capitalist system: the de facto objective of the state
The term ‘separation-in-unity’ (s-i-u) was first introduced in 2§11 in the context of the separation between enterprises and banks, which was posited as an s-i-u. The term was expanded on in 2§11-a (see alternatively the Glossary). Like an outward bifurcation, an s-i-u is a main institutional separation. The key difference is that, in contradistinction to an outward bifurcation, the institutions, or bodies, or component parts, of an s-i-u are ‘(ultimately) each driven by the same objective, which articulates their unity’.
In the context of the main text of 6§7 the previous sentence requires specification. The state is considered vis-à-vis the capitalist economy, the latter being institutionally bifurcated (recall that this is the meaning of ‘outward’ bifurcation). The poles of that bifurcation are driven by different objectives. Together these constitute the capitalist economy as entity, which is not a unity but rather a dissociated bifurcated entity. The main text (6§7) posited: ‘given that the state de facto grants the core economic claims in the form of rights (6§6) it constitutes vis-à-vis the capitalist economy a separation-in-unity within the capitalist system’. Ultimately, given the state-granted rights, the de facto objective of the state is the reproduction of the capitalist system – whence it (pro temps the granting of those rights) is identified as the capitalist state (6§4). In that sense it constitutes a separation-in-unity within the capitalist system.
A recurrent theme in this chapter and ones to follow is that the state has to seek legitimation for this position. In seeking this legitimation – as we will see in especially Chapter 7 – the state is required to take account of several conflicting interests, including those that are articulated by the different objectives of the bifurcated poles referred to above.
In reference to explication 6§4-a (on state agents, or state actors and their motivations) it should be emphasised that the state as entity has no ‘subjective’ objectives. Objectives of the state are identified by the effects of the operation of the state as laid down in legislation and other regulation, and by the state’s upholding of that legislation.
6§8 The positing of granted rights in the form of law – taking position: legal rights as political rights
The positing of the state’s actions in terms of the general interest (6§6) and its separation-in-unity (6§7) is grounded in the positing of granted rights in the form of law. Thus the state posits rights granted in the form of legal rights. The form of law explicitly posits that these rights apply equally to all. Herewith the state (putatively) establishes its extraordinary impartial status.
The positing of the state’s actions (so far regarding these granted rights) in the form of law requires a precise and often complicated demarcation and specification of these, also in face of the practicable upholding of these. This implies that the state must take a stance on the specific content of rights. Especially when rights are actually or potentially in conflict (6§7), this stance of the state articulates its position as a political position – even if framed in terms of the general interest. In this way legal rights appear as political rights.
6§8-a Explication. Stages of the exposition and the ‘construction’ of rights
Note the three stages of the exposition: from (1) entitlements claimed (6§2–6§3); via (2) these claims as posited in the form granted rights (6§4); to (3) these granted rights in the form of law (6§8). As posited in the last form these are further concretised in 6D4–6D6.
Granted rights in the form of law may also be called ‘legal rules that construct the entitlement’. Morris (1993, p. 823) remarks: ‘Entitlements must be constructed so that they do more than simply “give legal force” to certain interests. They must also specify the extent and type of legal force that a given interest has in any particular context and in relation to any other particular entitlement.’
6§8-b Explication. Codified and non-codified law
The state may define right by way of codified law or other law-creating acts, such as judgments or verdicts. In what follows my implicit reference will be the ‘code law systems’. However, the exposition equally applies to ‘common law systems’ even though this might often require some reformulation.
6§8-c Amplification. ‘Natural rights’ versus state-granted rights
In political philosophy and political theory, there is a longstanding tradition of conceiving rights as ‘natural rights’ or at least as rights that exist independently of the state (e.g. Gavison 2003). I take distance from this tradition because there is no criterion to demarcate one ‘pre-state right’ from another.11 In 6§2–6§3, therefore, I used the term entitlement claims. With respect to ‘property’ the former position (rights existing independently of the state) has been called ‘full liberal ownership’, and the latter position (rights are granted by the state) ‘bundle theory’ (see the overview by Breakey n.d.; see also Azevedo 2010). In the latter tradition, authors often use the term ‘rule’ instead of right. (See, for example, Morris 1993; the same applies for Calabresi and Melamed on whose work she builds.)
6§9 Arbitration and sanctioning
The state posits granted rights in the form of law (6§8). However, in order for legal rights not to be empty, in the sense that actors could neglect the law, the state must maintain these legal rights. Thus the grounding of legal right requires the state to be the arbiter and sanctioner of deviation from the law.
(At this point of the exposition, the public prosecution of such deviation is implicit – it is amplified in 6§18. At this point of the exposition, arbitration is part of the state’s administrative body. In 7D6 the judiciary is presented as a separate body of the state.)
Division 4. The capitalist economic rights framework
In this division, and all following ones in the book, ‘framework’ is a shorthand for ‘legislative framework’. This division presents a brief categorisation of necessary legal rights to property and to the employment of labour. At the level of the state, these constitute the primary condition of existence for the exposition in Chapter 1. Together these are called the economic rights framework. ‘Framework’, here and in the next divisions, merely denotes that I present a very general categorisation instead of detailed specifications (in the end those that one finds, depending on the framework, in the hundreds or thousands of pages of the legislative codes).
6§10 Necessary categories of the legal right to property
This section merely lists the categories that necessarily make up the legal property rights framework. More detail is not required for this chapter’s purposes. The legal right to property is concretised in civil law and in criminal law. Although all the rights listed below are necessary, none is necessarily a full right.
Regarding property, the focus of the exposition in 6§2 and 6§4, and by implication in 6D3, was on ‘claims of entitlement’/‘granted rights’/‘legal rights’ to (1) private property in the earth and (2) private property in means of production other than for production by the claimant. For capitalism these are the core granted property rights, comprising part of the wider category of granted property rights in general. However, to the extent that the state draws no distinction between these two and property right in general, the following connects to property right in general, on the understanding that the earlier two property rights are the essential ones, and that other property rights are subordinate, even if the latter can be necessary corollaries of the former.12
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The legal right to property (both for natural persons and corporations)
The legal right to property is ruled by the convention that possession is a sufficient title for ownership (whereas the actor challenging that ownership has to prove its own title).13 Several forms of expropriation, such as theft, are classified as criminal and hence so prosecuted and penalised as concretised in criminal law. However, some forms of expropriation can be legal (cf. 7§2).
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The legal right to free usage of property
Ownership is ruled by the legal right to the free usage of property as long as this does not hinder the property of others. This legal right to free usage may conflict with legal rights to existence whence this property right is a restricted one (6§14 below).
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The legal right to the fruits from property
Free usage of property might seem to include the legal right to the fruits from property. We will see in 7§1 and 7§18 that these rights are not analogous and that the latter is not a full legal right. Quite apart from the caveat in the last sentence, it is essential to capitalist legal right that surplus-value (see also 6§11 below) is defined as a fruit from the property in the earth and other means of production, rather than as the fruit from labour (for the latter view see again the quotations from Smith (1776) and Keynes (1936) in 1§14-b).
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The legal right to transfer property by agreement
The permanent transfer of property or the temporary transfer of property (hiring, lending, renting, leasing) is ruled by the right to free contract or agreement (including that of marriage). In face of the shaky basis of possession for ownership (see the legal right to property), substantial property (especially real estate and dwellings) is ruled by law about its registry, its transfer agreements and its conveyance.
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The legal right to incorporate
A special form of the right to transfer property is the right to incorporate (cf. 2D6).
Even this brief listing, together with some main restrictions to the full exercise of these rights, may make it clear that the legal formulation of property rights is a complicated matter. Nowadays their legal codes and sub-ordinary regulations take up thousands of pages.
6§10-a Explication. Contingent property right: legal succession of property
The succession of property is a particular form of transfer of property right as concretised in civil succession law.14 The reason for not incorporating this in the main text of 6§10 is that it is contingent. Schumpeter (2003 [1943]) makes a big point about succession as a cornerstone for the survival of capitalism – whence, in our terminology, it would seem to be necessary for the capitalist system. He might have had a point for a mainly non-corporate organisation of the business structure where enterprises in case of single ownership would die (or perhaps go into public ownership) with the death of the owner. However, because there is no escape from ownership of the corporation (unless it goes bankrupt), the corporation does not die with the death of one or more of its current shareholders.
Note also that between capitalist countries today, succession tax rates are highly divergent.
6§10-b Amplification. Limited liability of owners of corporations
The restriction on the free usage or property of ‘not hindering the property (and person) of others’ implies that property owners are liable in this respect vis-à-vis other property owners. In case of corporate property, the corporation is liable whereas the liability of the owners of the corporation (i.e. the shareholders) is limited to their finance capital contribution. This limited liability is a remarkable aspect of corporate law and hence of capitalist property right (cf. 2D6 that expands on merely the ‘economic’ aspect of this). In the absence of corporate limited liability, enterprises might still engage in joint ventures with unlimited liability.
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
Labour law makes no distinction between trade in labour-capacity and labour (1§6). In this section, therefore, the distinction is bracketed. The enterprise’s legal right to trade and employ labour as combined with its legal right to appropriate the product and particularly the surplus-value produced by that labour is essential to the capitalist system.
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Trade and appropriation: property in persons
Market trade of commodities is based on the premise that the actor selling a commodity is its legal owner, the ownership being transferred by the trade contract. With commodity trade in the form of lease (also called renting), the owner (lessor) transfers the use of a commodity to a contracting party (the lessee), for a time and other conditions a stipulated by contract.
The legal right to the market trade of labour derives from the notion that human beings (in this case workers) are tradable in some form, which is indeed the case in a capitalist economy (as well as, more broadly, in systems of slavery). Market trade of labour is based on the remarkable premise that a person (the worker) is the owner of its own person. (This notion seems to have originated with Richard Overton, 1646, and was, more influentially, phrased by John Locke, 1689, who wrote: ‘every man has a property in his own person’.)15 Only on the basis of this premise can some entity (land, horses, persons) be traded in either the form of ownership transfer, or the form of use transfer.
Only on the basis of this premise could – in the case of a labour lease contract – the enterprise command the fruits of the use of the commodity, that is, appropriate the product, including the surplus-value produced by labour – labour’s ‘compensation’ being the wage (a form of rent).
If a person (the worker) would indeed have the property in its own person, then, on the basis of property and contract law, the ownership could in principle be transferred. However, labour law does not allow for this (or sometimes is not explicit about it).16 This seems to imply either that labour has a very limited property in its person, or that the premise of ownership in persons does not hold – whence the lease of labour and the appropriation consequences are shaky.
However, the fundamental point is the capitalist commodification of human beings (1§6), in the case of labour – a commodification that the state grants as a legal right. It could be argued that this is still better than systems of slavery or of feudal appropriations (such as the enforced labour on the land of the lord). Nevertheless ‘it could be worse’ is not a firm legal basis.
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Free trade and enforced trade
A second premise of labour contract law is that the labour contract is a free, non-enforced, one. This was, in a somewhat different context, already alluded to (1§6 and 6§2-a). Workers are free to choose which employer is going to appropriate the surplus-value that they produce. In this sense the appropriation is based on a free contract. However, to the extent that workers lack property in the earth and other means of production, they are forced to engage in an employment contract with some enterprise. In this sense the appropriation is not based on a free contract but on an enforced one. In each sense, nevertheless, the appropriation is a legalised appropriation.
Finally, we will see in 6§15 that the unlimited exercise of the legal right to employ labour may conflict with the right to existence (initiated in 6§3). Thus although this right is essential and necessary to the capitalist system, we will see that is must be a restricted right.
6§11-a Explication. Employment of labour versus exploitation of labour
I have hesitated over whether, instead of the term employment of labour, I should use the term exploitation of labour (as Marx and most marxian political economist do). Exploitation of labour is an analytical term, which has nothing to do with heavy or not so heavy exploitation (that is measured by the rate of surplus-value). Because in the common language of the past decades ‘exploitation’ has come to mean ‘undue employment’ (which would be ‘heavy exploitation’) I have decided against the term exploitation because that is not the general issue. The general issue is that enterprises appropriate the surplus-value produced by labour (‘heavily’ or less ‘heavily’).
I will nevertheless sometimes use the term ‘exploitation’ if there is no risk of the confusion just mentioned, or when the context requires it. For example, the phrase ‘the legal right to employment’ tout court might be interpreted as a workers’ right instead of a right of enterprises. (In Chapters 6–7 employment of labour by the state is implicit – it will be made explicit in Chapter 8.)
6§12 The general interest and ‘objective class’ interests
Economic legislation, and especially the state’s giving legal force to entitlement claims, is inherently about opposing and conflicting interests.17 Throughout this book, the objective is to set out the moments that condition the reproduction of the capitalist system. When the state casts its arguments for particular legislation ‘ultimately’ in terms of the ‘general interest’ (6§6), this regards ultimately the reproduction of the capitalist system. However, for the assessment of the position of the state, it is opportune to see what are the particular ‘capital’ or ‘labour’ interests served by the state’s legislation and other regulation. For this purpose I will henceforth use a shorthand indication that is based on a very broad distinction into two ‘categories’ – or ‘objective classes’: the ‘capitalist and managerial class’ (CMC) and the subordinated working class (SWC). Together these share the general drawbacks of capitalism (in short, the one-dimensionality of monetary value, 1§4). Particularly these two categories derive different (dis)advantages from the capitalist system in terms of their decision-making power and of their shares of income and wealth. In line with 2§15-a these classes are defined as follows:
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SWC. Subordinated workers are defined as workers who have no decision-making power (in the USA between 1930 and 2010 this category included between 73% and 90% of the relevant population). Their average income is considerably lower than the average CMC income. (2§15-a, Graph 2.14.)
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CMC. Capitalists have direct or indirect decision-making power. The size of their non-labour income is such that they are not forced to engage in an employment contract – that is, to be employed themselves (although typically they do engage in such employment contracts). Managers have decision-making power and benefit from ‘super-wages’.18
These are called ‘objective classes’ in terms of these two measures of decision-making power and of income only, and in contradistinction to any notion of ‘subjective class’, that is, of class-consciousness.
Division 5. The rights to existence framework
After briefly introducing rights in relation to the direct safety of the body of persons, this division focuses on various protections of the person that in some way restrict full property rights. These are consumer and environmental protections, as well as labour protection during the production process.
6§13 Legal rights to existence
Legal economic rights (6D3) must necessarily be grounded in state-granted rights to existence (6§3 and 6§4), and next be posited in the form of legal rights (the current division). Hence the state must demarcate, define and so concretise these rights. This concerns, first of all, the respect of the body of the person and hence the forbearance of direct violence regarding the person. More concrete existence rights, and especially those existence rights in demarcation of economic rights, are presented in the following sections of this division.
6§14 Protection of the consumer and the environment: restrictions on commodity production
Respect for the existence of the person regards not only direct bodily violence but also violation of the person’s safety and health regarding food and the environment (including the climate). Granting these as rights in general seems persuasive and simple qua principle. However, when it comes to formulating these rights in the form of law, potential conflict centres on their degree and hence content. What is more, much of the regulation in this field is difficult to enact precisely and hence tends to be extensive and complicated.
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Consumer protection
The monetary-value dimension of production determines that the physical quality of output is no intrinsic motif for production, but rather its by-product (1§11). This indifference towards the physical output is a potential threat to the consumers’ safety and health conditions (1§11-a).
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Environmental protection
Even more than with consumer protection, the scope for protection of the environment is elastic. And even more so than the former, environmental protection can be postponed (even if not without damage). Another key difference is that whereas the transaction of a consumer good passes the market (1§4), free nature inherently does not: it has no monetary value (1§14, heading 2). The other main difference is that neglecting consumer protection may affect a human generation, whereas neglecting environmental protection may affect many, or all, future generations.
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Conflicts of right: restrictions on commodity production
Next to the inherent conflict regarding the demarcation of the degree and content of these rights to protection, these protections put restrictions on the production of commodities, and so conflict with, and must restrict, rights to property (6§10).
For both consumer and environmental protection it applies that whereas this protection is necessary as a ‘moment’ (that is, there must be this protection), the degree and specific content of such protection is contingent and a source of potential conflict. Facing this (potential) conflict, much of the specific content of these protections tends to be delegated to semi-independent regulative authorities and the prosecution to semi-independent inspectorates (see further 6§16).
6§15 Labour protection regarding labour time and occupational safety and health: restrictions on the production process
Next to consumer and environmental protections (6§14), the legal right to existence (6§13) is concretised in labour protection.
This protection concerns the regulation of labour time (especially the maximum labour time per day and per week) as well as the regulation of occupational safety and health. Labour protection in general is rather persuasive as it is directly about existence issues. However, the potential conflict about such regulation centres again not so much on their principle but rather on their degree and hence content. Whereas the regulation of labour time is fairly easy to enact precisely, the regulation of occupational safety is not, and tends to be complicated.
Labour protection puts restrictions on the design of the production process, which conflicts with the legal right to free usage of property (6§10) and the legal right to employ labour (6§11). As with consumer and environmental protections, labour protection is necessary as a moment (there must be protection) whereas the actual content is contingent and a source of continuous potential conflict. Again the specific content of the regulation tends to be delegated to semi-independent regulative authorities and the prosecution to semi-independent inspectorates (see 6§16).
6§15-a Explication. Labour time and the minimum wage
For the regulation of labour time it is pre-posited that the permitted maximum labour time is sufficient to gain a ‘living wage’ or at least a subsistence wage. So far there are no guarantees for this, other than via the compliance of labour (2§7). The (a) minimum wage is presented in 7§10.
6§16 Delegation of the specific regulation and of the supervision of its execution: purification from conflict
The upholding of the rights to existence insofar as these require restrictions on commodity production and the production process (protection of the consumer, of the environment and of labour), conflict with capitalist economic rights (6§14–6§15). This clash of rights threatens the legitimation of the state. In attempting to moderate problems, the state tends to enact these protections/restrictions in general terms, and to delegate specific regulation to particular putatively (semi-)independent regulation authorities, and the prosecution to particular putatively (semi-)independent inspectorates.
In this way the state ‘purifies’ its core administrative body from conflict (to some extent). Nevertheless, the state is ultimately responsible for the actions that it delegates. However, in the case of disasters or heavy conflict, the state can dismiss and replace the board of the authority or of the inspectorate, thereby evading or mitigating any heavy effects on its own legitimation.
6§16-a Amplification. Purification from conflict through delegation
The delegation referred to in the main text is the first occasion of an institutional ‘purification’ of the state, that is, purification from potential conflict in order to protect its legitimation. Throughout Chapters 7 and 9, similar as well as other forms of purification will recurrently be introduced into the exposition.
Division 6. The public security framework
This division presents the framework of ‘public security’ (6§18). The first section (6§17) is introductory and applies to (most) public security as well as to rights in general.
6§17 ‘Rights’ (allowance rights) and ‘positive rights’
Generally a right held by one person imposes on other persons the duty to respect that right.19 (In accordance with judicial discourses, when I use the term ‘person’ this term includes reference to non-natural persons such as business companies and corporations.) Concerning rights a distinction is made between ‘allowance rights’ and ‘positive rights’. So far, when I used the term ‘right’ I implicitly meant what I will now term ‘allowance right’.
An allowance right held by a person – e.g. the allowance right to property of means of production – entails the duty on all other persons to respect that right. That is, the duty of non-interference, non-obstruction or non-action. Thus a full allowance right to property entails that once a person possesses property, the possession ought not be obstructed and, more specifically, the possessor ought not be expropriated. Similarly, a full allowance right to existence imposes the duty on other persons to not interfere with or obstruct this right, e.g. by violence. (In much of the literature, allowance rights are called ‘negative rights’, in reference to the duty side of the this type of right – see Addendum 6§17-a.)
A positive right entails duties that go much further: requiring ‘positive action’. (Positive rights require a specification as to whether the duty of positive action falls on all other persons, or on a specific category, or perhaps on the state or some other institution.) A positive right to property, for example, to the earth, might more specifically entail that everybody is granted the right to possess some portion or perhaps an equal proportion of the earth; it might impose the duty on others to transfer their disproportionate share in the earth to the other right holders. Similarly a positive right to existence, for example, specified as the positive right to decent work, or the positive right to a decent living (all to be specified further), imposes the duty on others of sharing the available decent work or to share other means of decent living. Again, the required duty might fall on the state or some other institution.
Returning to allowance rights: a restriction of rights to allowance rights implies the negation of symmetric positive distributions (of property, work, existence, etc.). In other words, the restriction implies formal equality for economic actors regarding duties of the non-obstruction of rights (property, existence), whilst there may be material inequality regarding the distribution of property or means to existence.
In capitalism, legal property rights are generally restricted to being legal property allowance rights. For existence rights there are several varieties (see further 7D5). Note that the drawing line between allowance and positive rights is not an exact one. Take the case of consumer protection. From one perspective this imposes the ‘abstinence’ duty on enterprises to not obstruct the security of consumers (allowance right). From another perspective it imposes the ‘positive’ duty (regarding positive right) of producing secure food and other commodities.
Having made this distinction, the term ‘right’ will henceforth denote allowance right. Other rights will be specified as ‘positive right’. The distinction will become especially relevant in Chapter 7.
6§17-a Addendum. Rights (allowance rights or negative rights) and positive rights
Allowance rights (negative rights) are a common, or perhaps the most common, category of rights in a capitalist system. I have refrained from using the term ‘negative right’ because when I did so in earlier drafts of the book, which were shared with mainly economics students, the latter felt uneasy about the term, questioning especially what is particularly ‘negative’ about the maintenance of such a right. Because this book provides an immanent critique of the capitalist system, I would not want my terminology to resemble an external criticism, with which the term ‘negative right’ might be associated. (Alternative terms for ‘allowance right’ would be ‘tolerance right’, ‘permit right’ or ‘non-obstruction right’.)
The distinction between negative rights (allowance rights) and positive rights derives from Isaiah Berlin (1958) who made a distinction between negative and positive freedom (see Andre and Velasquez 1990, for an introduction in two pages).
6§18 The public security framework: upholding of the legal economic and existence rights and of the institution of the state
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Public security components
The state’s upholding of both the legal right to property (6D4) and the legal right to existence (6D5) requires a public police and public prosecution, the public police being entitled to use violence.
The upholding of each of the legal rights to property and existence also requires the protection against fire, open water and other elements.
These together – public police and prosecution and the protection against ‘elements’ – are called ‘public security’. They have in common that – for various reasons – their provision cannot, or cannot adequately, be sold on the market. Hence they must be collectively provided by or via the state – even if some of the execution might be outsourced, perhaps via procurement and licences.
Public security, or specific components thereof, can be granted in the form of a provision (weak claim) or in the form of a ‘positive right’ (strong claim) – see 6§18-a.
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The state’s legalised violence and its limits
As institutionalised in the public police, the state grants to itself the monopolistic right to the use of violence and next institutionalises this right in legal form.20 This legalised violence is the state’s extreme though limited legal resource for the protection of the rights that it grants and legalises. It is also the extreme though limited legal resource for the protection of the institution of the state itself (6§4).
The state can use this violence against a limited number of actors that deviate from the law. This amount of deviating actors is limited because the state’s violent powers are inherently materially restricted – in the end because the means for violence must be materially produced and because there must be a sufficient number of reliable police forces to operate these means.21 Ultimately, and predominantly, therefore the state must seek legitimation for its actions and non-actions not just in a majority compliance, but in the compliance of a vast majority of social actors (6§5).22
6§18-a Explication. Positive right to public security
Note thus that the maintenance of legal rights to property and existence (rights to non-interference) must be translated into positive rights to protection (rights to interference) by the police, fire brigades, and so forth. If, for example, the protection of property or person by the police were a positive right (instead of a provision), it is the specific definition of the protection that determines the meaning of the right. Generally the state tends to prefer to formulate its legislation for various elements of public security in terms of ‘provisions’ rather than rights, because this reduces the effectivity of possible liability claims in case of damage.
Summary and conclusions
This chapter returned to the expositional level of Chapter 1. It started with the capitalist economy’s dissociated outward bifurcation between households and privately owned enterprises – now predicated on not only the presumed abstract existence of the capitalist economy, but also presumed abstract existence of the state. (Division 1.)
In the exposition of the capitalist economy it was implicit that actors have the freedom (concretised as entitlement claims) to act as set out in Part One. The core of these are: first, claims of entitlement to private property in the earth; second, claims of entitlement to private property of means of production other than for production by the claimant; third, claims of entitlement to employ labour as combined with the appropriation of the surplus-value produced by that labour; fourth, claims of entitlement to existence.
However, within the economy there are no institutions guaranteeing these claimed entitlements, whence the capitalist economy cannot stand on its own. When the state grants particularly these claims in the form of rights, the state is identified as a capitalist state. The state demarcates these granted rights and it upholds them. (Division 2.)
The existence of the state is grounded in five conditions of existence regarding the form of its operation: (1) its legitimation in the compliance of the actors; (2) in gaining that compliance by positing its actions in terms of the putative general interest; (3) the latter requires that it putatively positions itself above and outside the opposing particular economic interests, hence as extraordinary social institution – as a separation-in-unity; (4) this again requires that it posits right in the form of law, equally applying to all, which, however, implies that it must take a stance on the content of right; (5) the form of law requires that the state maintains law by arbitration and sanctioning. (Division 3.)
The ‘economic rights framework’ is the first moment of the state’s positing right as legal right. It comprises various necessary ‘property rights’, and the legal right to employ labour as combined with the employer’s legal right to appropriate the surplus-value produced by that labour. (Division 4.)
Economic rights are futile without the right to existence. Hence the former rights are grounded in the latter – the second moment of the state’s positing right as legal right. Much of the demarcation of the rights to existence in the form of law (consumer and environmental protections and labour protection) conflicts with economic rights. Hence potential conflicts at the level of the economy are transferred to the level of the state. The state attempts to mitigate their effect on its legitimation by delegating the regulation of the specific content of these protections to be delegated to (putatively) semi-independent regulative authorities and the prosecution to (putatively) semi-independent inspectorates. (Division 5.)
The state’s upholding of the legal right to property and the legal right to existence is grounded in the state’s provision of public security – police, public prosecution and protection against fire and water (Division 6).
This completes the exposition of the capitalist state at the expositional level analogous to that of Chapter 1.
The first main conclusion is that the existence of the capitalist economy can only insufficiently be grounded within the capitalist economy itself. In light of that insufficiency, ‘economic freedom’ cannot be grounded within the economy.
The second main conclusion is that the state, by granting the ‘economic rights’ that it does grant, is indeed identified as a ‘capitalist state’. Therewith these rights are indeed political rights. However, that adjective is in a way empty, as all actual rights are political rights. We will see in Chapter 7 that the legitimation of the state requires more than ‘merely’ the granting and upholding of these economic rights (as we have already seen for elementary existence rights).
∵
Note: The reader who would generally skip the Appendices in this book, but who is going to take cognisance of the empirical Amplifications (in the next chapters), is advised to read at least the first section (6A-1) of the following Appendix.
Appendix 6A. Empirical data in chapters 7–10: the OECD-21 average
In the systematic exposition of this book, the starting point of ‘dissociated outward bifurcation’ in 1§1 and 6§1 set out an abstract-general characterisation of the capitalist system. The concrete meaning of full-fledged ‘capitalism’ is determined by the starting point’s increasingly concrete conditions of existence and their manifestations as exhibited in Chapters 1–10. Throughout the rest of Part Two (Chapters 7–10) I will, especially for various categories of state expenditure and taxation, refer to historical data of the average of 21 OECD countries during the period 1870–2015 as explained below.
6A-1 Empirical reference to ‘capitalism’ as exemplified by the OECD-21 ‘strongest version’
Empirically, the 34 countries that made up the OECD (Organisation for Economic Development and Co-operation) in 2015 are main examples of full-fledged capitalist countries. However, not all of those countries can be characterised as capitalist throughout the period 1870–2015. This applies especially for most of the countries that became OECD members after 1990. For historical data I therefore restrict myself to the countries that were OECD members in 1990, though omitting Iceland, Luxembourg and Turkey, because for these countries pre-1960 data are always missing and many data afterwards. This leaves 21 countries. I henceforth use the term ‘OECD-21’ for: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Greece, Germany, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom (of Great Brittan and Northern Ireland), United States of America.23|24
The countries of the OECD-21 are indeed merely examples of capitalist countries, though a specific selection of those, in that on a world scale these are characterised by a relatively high GDP per capita, and many of these built that on a colonial and imperialist history. On the other hand, I consider that a critical exposition of ‘the’ capitalist system should focus on its hitherto economically strongest version, in whatever way that was historically reached. (Personally I have moral views about that history and thus on the appreciation of that ‘strength’. These views, however, are irrelevant to the exposition of the reproduction of the capitalist system in its strongest version.)
We will see in Chapter 7 that for the average of the OECD-21, state expenditure increased from about 11% of GDP in 1870 to about 45% in 2015, with the main expenditure component of social security transfers increasing in the same period from about 0% of GDP to 25%. In face of the legitimation in the compliance of the vast majority of the actors (that is necessary for the capitalist system), I will submit that there is a tendency for a similar future development of state expenditure for the more recent and the currently weaker capitalist countries (Chapter 11).
I emphasise that all quantitative references to the OECD-21 form no part of the systematic exposition, and these are therefore relegated to Amplifications of the systematic sections. The systematic sections refer to all capitalist countries characterised by the starting point’s ‘dissociated outward bifurcation’, however old or young these are in this respect, and whatever their stage of development in terms of, for example, state expenditure and GDP per capita. To be sure, all of Part One applied to all of these countries.
6A-2 Empirical references to the arithmetic average of the OECD-21
As with Part One, Part Two is concerned with full-fledged capitalism in general, not individual countries. When in Amplifications I refer to the average of merely the OECD-21, this is for the pragmatic reason of lack of the relevant and reasonably standardised data of the average of all capitalist countries in a long-run perspective (1870–2015).
I refer to the OECD-21 averages except for a number of cases when averages are not available or when averages make no sense (in that case I may refer to an individual country). More specifically, the reference is always to the unweighted average or arithmetic average (which is the same as the ‘arithmetic mean’). The reason for this is that I am not concerned with the possible economic impact of one country on another. My concern is the average OECD country’s political economic constellation. Then it does not matter if a country is big or small. In each case it has to uphold a full legislative framework and in each case its state has to gain legitimation for that framework. Therefore, as a matter of principle I have to measure in terms of arithmetic averages (without weighing for the size of an economy).25
6A-3 Data sources for the OECD-21
When it has the data available I always use the OECD database. Mostly this is the case for data from after 1990 and sometimes for data from after 1960 or 1970. Incidentally I use specialised databases, such as from UNESCO.
For the years for which the OECD has no data available, I mainly rely on three sources: Tanzi and Schuknecht (2000); Castles (2006); and Tanzi (2011). For the years prior to 1960, decomposed state expenditure data on a common base are scarce, and the further we go back, the number of countries for which there are data on a common base is also restricted. For all years (1870–2015) I have used the maximum amount of information that my sources provide for the OECD-21.
Finally, the common statistics in the field of ‘state expenditure’ most often adopt the term ‘total government’ or ‘general government’ for the sum of ‘federal government’ (when relevant), state government and local governments. For graphs and tables I adopt the latter convention of ‘general government’.
List of figures chapter 6
Scheme 6.1 Systematic of state-granted capitalist economic rights – the capitalist state in general (outline Chapter 6)
6§1. Dissociated outward bifurcation into households and privately owned enterprises
Scheme 6.2 The twofold grounding of the starting point
Division 3. Granted rights in the form of law and the legitimation of the state
Scheme 6.3 The initial conditions of existence of the state: the form of its operation
Adam Smith writes: ‘The value which the workmen add to the materials, therefore, resolves itself in this case into two parts, of which the one pays their wages, the other the profits of their employer (…). In this state of things, the whole produce of labour does not always belong to the labourer. He must in most cases share it with the owner of the stock which employs him’ (Smith 1776, Book I, Ch. 6, paragraph 5).
During feudal times in much of Europe, as well as in many other cultures, there was at least the idea that land is a God-derived collective property (governed by stewards). See, for example, Locke 1689, Second Treatise, Chapter V.
See Addendum 1§1-j on the term ‘continuity impediment’ versus ‘contradiction’.
The same applies for perhaps self-centred economic drives. Thus the exposition is the reverse of much of the ‘public choice’ approaches of the state.
Wealth of Nations, Book V, Ch. I, paras 45 and 55.
For an overview, see Friend (n.d.) [accessed 2016].
The adjective ‘putative’ in the phrase ‘putative general interest’ is to be taken to mean that the state proposes its actions to be in what the state itself considers to be the general interest. In this way the state in fact defines its actions to be in the general interest. Other actors may have different views about what the general interest would be.
This has also been my own experience when I was a member of the senate in the parliament of the Netherlands (2007–15). I can point to numerous legislative debates where ‘the general interest’ was indeed presented as a last straw.
‘Impartial’ is always a tricky concept as it is inevitably based on impartiality premises. If the continual existence of the capitalist system is the premise, then the state may indeed posit itself as impartial.
Note that the exposition is still at the level of abstract-generality. At more concrete levels of the exposition, the state’s positioning of itself above the opposing interests may require that it bounces back to the economy hyper-conflicting issues, either directly or in the form of a relegation to bodies such as a Central Bank or a Competition Authority (cf. Chapters 7 and 9).
In Reuten and Williams 1989, we took, in my current view, insufficient distance from this tradition, by merely distinguishing between right and legal right.
Herewith I make explicit that a systematic exposition need not stick to the categories and the specific generalisations of the object of the exposition. ‘Re-categorisation’ is often at the heart of scientific investigation and exposition.
A more detailed account of this matter would have to treat the question of what may count as property and what may not (e.g. intellectual rights).
Succession to family members seems a feudal remnant.
Overton writes in An Arrow against all Tyrants: ‘To every individual in nature is given an individual property by nature not to be invaded or usurped by any. For everyone, as he is himself, so he has a self propertiety, else he could not be himself; …’ (quoted by Ishay 2008, p. 92). Locke (1689) writes the phrase quoted in the main text, in the context of a discussion of the God-given commons. That Locke himself (in the last sentence below) derives an apparently radical conclusion from this thesis – for labour, not for the commons – is another matter. He writes: ‘Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his.’ (Two Treatises of Government, Book II, Chapter 5, §27).
In the latter case, the assumption is presumably that people do not engage in the stupidity of selling, knowing that the worker’s ownership of the selling price will be transferred to the purchaser along with the purchase of the person.
Cf. Morris 1993, p. 823.
As indicated in 2§15-a: In the USA between 1930 and 2010 the average income of the total managerial class was between 3–4 times higher than the SWC total average. The average income of the capitalist class was between 9–29 times higher than the SWC average. (Cf. Mohun 2016.)
See, e.g., Morris 1993, p. 828.
The state, Weber noted, ‘claims the monopoly of the legitimate use of physical force within a given territory. … The state is considered the sole source of the “right” to use violence’ (1999 [1919], p. 1). However, there are (degrees of) exceptions to this monopoly, for example, in the USA on the basis of its citizens’ right to bear arms.
I realise very well that the restrictions to which I refer, and the state’s searching the limits of these restrictions, have historically and contemporarily resulted in an enormous amount of blood.
It cannot be pinpointed what, in this context, constitutes a ‘vast majority’. It is likely more than 75% rather than less. Approaching this from the other side, that is, violent action by state subjects, even such rebellion by 10% of the people seems insurmountable. And even that is a very high number within a ‘normal’ police force, as measured by OECD averages, and even when the active military is included.
In 2015, the share of these 21 countries of the world population was 13%, whereas their share of world GDP was 56% (source: World Bank, database World Development Indicators – update 17 Nov. 2016).
In 2015, the 13 other OECD countries were: Iceland, Luxembourg, Turkey – as mentioned (from the year 1961); Czech Republic, Hungary, South Korea, Mexico, Poland (from the years 1994–96); Chile, Estonia, Israel, Slovak Republic, Slovenia (from the year 2010).
Note that this is rather common in this field. See, e.g., Tanzi and Schuknecht 2000, Castles 2006 and Tanzi 2011. The OECD database often also calculates unweighted averages for its ‘OECD Total’.