This is a glossary of some of the main terms that are specific to the field of this book. It should assist especially the reading of the first few chapters of Parts One and Two (Chapters 1–2 and 6–7). It also covers most of the field-specific terms used in the ‘General Summary and Conclusions’.
Because the interconnection of concepts is core to this book, it is inevitable that the reader looking up an entry is often referred to other entries.
Some lemmas start with a brief dictionary definition (in brackets; ‘a.o.’ is an abbreviation for: ‘amongst other’ definitions). This is followed by the particular usage of the term in this book in case this (somewhat) deviates from the dictionary definition.
The sign → means: see the lemma (as indicated after the arrow).
In the references to sections of the book, ‘sub #’ refers to a sub-section of the section indicated.
GI-C§# refers to a section in the General Introduction. A§# refers to a section in the General Appendix, Outline of Systematic Dialectics.
In this book this term is used in reference to a →‘moment’ (in brief a ‘stage’) of the exposition that has not yet been fully →‘grounded’ (its concrete conditions of existence have not yet been determined). The starting point of the book (1D1 and 6D1) has a special status. It is ‘abstract’ in the sense above, whereas it is at the same time a (not yet grounded) reference to the essence of the totality. The starting point is therefore referred to as ‘abstract-general’. To the extent that all of Chapters 1 and 6 are starting points in a wider sense, these have also been referred to as ‘abstract-general’ moments. [A§11.]
This term is sometimes used so as to emphasise that a statement made at that point yet abstracts from x, that is, a →‘moment’ x (in brief a ‘stage’) presented later on. This phrase occurs in sentences such as: ‘the state yet being abstracted from’. This refers to a stage of the systematic dialectic when some moment (such as the state in the example) is still →‘pre-posited’ (i.e. not yet presented). Instead of ‘abstraction from x’ an alternative used is: ‘with x bracketed’.
→‘trans-abstraction in practice’.
The process of the growth of →‘capital’. [2§3 sub 1, 2§6.]
The term ‘actor’ or ‘social actor’ is used in a very general sense of ‘activity’. An actor may be an individual (that is, an individual in a particular role, for example that of labourer, entrepreneur, manager) or a (corporate) ‘person’ in the legal sense, hence also an institution such as an enterprise, or the agent of a particular institution (e.g. enterprise). [2§7-a.]
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 (‘person’ denotes person in the juridical sense, including, for example, a corporation). 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. An ‘allowance right’ contrasts with a ‘positive right’. The latter 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. [6§17.]
(dictionary: the act of joining or the state of being joined). Structured interrelationship/interconnection within the totality of the exposition.
A distinction is made between ‘banks’ and ‘banking entities’. Banks are conceptualised purely as creators of money and as financiers. Any labour that this might require is outsourced to a separate ‘production branch’ of the banking entity. These production branches are subsumed under the enterprises sector. This means that the (pure) banks are not producers. [3§1, sub 2.]
→‘outward bifurcation’; →‘inward bifurcation’.
The term capital without adjective refers to ‘active capital’, that is, the balance sheet assets of a →‘production enterprise’. A distinction is made between ‘active capital’ and ‘passive capital’ (or passive finance capital). Active capital is the ideal →‘monetary value’ (ideal value or book value) of, first, the enterprise’s investment in inputs for production and, second, the running →‘valorisation’, each measured at one point in time, and reported on the enterprise’s balance sheet as assets. The running valorisation is co-materialised in the ideal monetary value of semi-finished products and not yet →‘validated’ output stocks. [1§13.] ‘Passive capital’ (or passive finance capital) is the equivalent of the various liabilities of an enterprise. [2§15; 3§1, summarised in Fig. 3.2a.]
Shorthand for the indirect exploitative relation between →‘passive capital ownership’ and labour, the counterpart being the directly exploitative →‘enterprise–labour relation’. As passive capital grows on the basis of the direct appropriation and next the distribution of surplus-value, passive capital owners are indirectly involved in the exploitative relation. [2§15, sub 3.]
This term is a shorthand for the three legislative (or regulative) frameworks of the state that are geared at its furthering of the accumulation of capital, that is: the monetary framework (7D2); the labour-capacity framework (7D3); and the infra-structural framework (7D4). This shorthand term is used in Ch. 11 and in the General Summary and Conclusions. [11§12, summarised in Fig. 11.16.] It is contrasted with the term →‘hard core (frameworks) of the state’.
The term capitalism refers to ‘full-fledged capitalism’. This is a social formation in which the dissociated →‘outward bifurcation’ (i.e. divide) between households and privately owned enterprises is dominant [1§1; 6§1] and in which the economy (the capitalist economy) and the state (the capitalist state) constitute a unity (→‘separation-in-unity’). The following are the further main characteristics of this social formation. Economic characteristics: (1) economic entities and processes are expressed and measured in the →‘monetary-value dimension’ (MVD); (2) labour-capacity predominantly takes the form of wage labour (whence there is a labour market); (3) production (the production process) is equally expressed and measured in the MVD; (4) the production of →‘surplus-value’ (integral profit) is the driving force of production; (5) the surplus-value is appropriated by the owner(s) of the enterprise [Ch. 1, passim]. Legal economic rights characteristics: Owners of enterprises make the following core claims: (1) claims of entitlement to private property in the earth; (2) claims of entitlement to private property in means of production other than for production by the claimant; (3) claims of entitlement to employ labour as combined with the appropriation of the surplus-value produced by that labour. The state grants these claims in the form of legal rights – the granting of these claims makes the state a ‘capitalist state’. [6D2.] (Capitalism emerged from about 1800, first in the UK and France [1§0-a].)
Passive capital ownership refers to the ownership of the liabilities of production enterprises. This includes, first, the loans from banks and other external financiers and, second, the internal financiers’ equity (the latter for corporations; ‘own capital’ in case of firms). [2§15 and 3§1.]
These are two broad class ‘categories’, or ‘objective classes’ that derive different (dis)advantages from the capitalist system in terms of their decision-making power and of their shares of income and wealth. These are called ‘objective classes’ in terms of these two measures, and in contradistinction to any notion of ‘subjective class’, that is, of class-consciousness. SWC: Subordinated workers are defined as workers who have no decision-making power (in the USA between 1930 and 2010 this category covered 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). 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’. [6§12.]
Private enterprises and their owners claim to be →‘entitled’ to: first, private property in the earth; second, private property in means of production other than for production by the claimant; third, employment of labour as combined with the appropriation of the surplus-value produced by that labour [6§2]. The capitalist state grants these claims in the form of ‘rights’ (this is what makes the state a ‘capitalist’ state) [6§4]. These three together are referred to as the ‘capitalist economic rights’ granted by the state.
In this book this term has the specific meaning of a dominant bank that clears interbank debts and credits for other banks. It imposes its standard of money and it imposes a standard for securities and liability rules on the banks for which it clears. It has no legal powers. The ClB is a concept introduced prior to the introduction of the state and a Central Bank, though it may be thought of as foreshadowing a Central Bank. [2§9 and 2§9-d.]
→‘capitalist and managerial class’.
→‘trans-abstraction in practice’.
(dictionary: the act of conforming, acquiescing, or yielding; a tendency to yield readily to others, especially in a weak and subservient way). Voluntary or involuntary conformation (see further Bay [2§7-b]). Labour’s compliance with the requirements of the enterprise during production is one of the main conditions for the existence of a capitalist economy [2§5; 2§7] →‘enterprise–labour relation’. Regarding the state, a vast-majority compliance of the actors (a vast majority of all actors) to the state’s actions – and at least its granting of the core →‘capitalist economic rights’ is the main condition for the →‘legitimation of the state’.
(dictionary: a.o. a group of objects, etc. related in some way). In this book this term has the meaning of: interconnected organisational units and/or interconnected processes and/or structures (often called configurations). The term may also refer to what in ordinary language is called a ‘subsystem’ (such as the ‘banking system’). Most often the term is used when, for methodological and sometimes for stylistic reasons, I want to avoid the term ‘system’. [GI, C§2, fn.]
A distinction is made between phenomena that are predicated on →‘necessary’ moments (Chs. 1–3 and 6–8) or on →‘manifestations’ (in brief: implications) of those moments (Chs. 4–5, 9–10 and 11). Phenomena (entities, institutions and processes) are contingent when these could be either absent or different without changing the necessary moments and their manifested implications. Hence these could be absent or different without changing the essential functioning and potential →‘reproduction’ of the system under consideration. [A§13, sub 1.] The exposition abstracts from contingent phenomena and their determinants. Nevertheless the degree of intensity of the forces engendering necessary moments and their manifestations is often contingent. [A§13, sub 3.]
Refers to an entity, institution or process that is both necessary to the reproduction (that is, the continued existence) of the subject matter and impossible to it. It therefore inevitably requires some kind of →‘sublation’. [1§1-j.]
(dictionary: having the function of deliberating, as a legislative assembly: as deliberative body). The existence of ‘a deliberative’ is a condition of existence of the →‘legitimation of the state’. This deliberative may, but need not, be associated with a parliamentary democracy. The (degree of) legislative power of a deliberative is contingent. [7§23.]
A diachronic process refers to one that gains force through time (if not counteracted, the same applies for its effect). A synchronic process refers to a process that has force within each period of time (if not counteracted, the same applies for its effect). In this book each of these processes refer to the history of full-fledged →‘capitalism’.
Specifics that differentiate a particular configuration (or a particular entity) within a general category of configurations (or a general category of entities).
A decrease in →‘valorisation’. Devalorisation is due to the actual →‘monetary value of labour’ (mLα) for any one capital lagging behind that in the previous period. This applies not on the Lα, but on a decrease in the ‘m’ (the →‘unit monetary value of labour’). Devalorisation refers to the value-added, and should be distinguished from depreciation, i.e. the (calculated) normal returns for the wear and tear of means of production (δK). [4§6, sub 2.]
Shorthand for the employment relation through which labour, as determined by its →‘productive power’, produces the value-added and hence also the surplus-value, the surplus-value being appropriated by the enterprise. In its quantitative aspect (the rate of surplus-value or the degree of exploitation of labour →surplus-value, rate of) this relation is constrained by, first, the technique of production, second, the rate of unemployment and, third (in face of that rate), the management of the compliance of labour during production, as assisted by the managerial device of a wages ladder that optimises this compliance. [2§7.] The ‘enterprise–labour relation’ is contrasted with the →‘capital–labour relation’.
(dictionary: something that exists as a distinct, separate, independent, or self-contained unit). ‘A something’ that has not, or not yet, been (fully) identified conceptually. [1§0, fn.]
(dictionary: a.o. to give (a person) the right to do or have something).
(dictionary for epistemology: investigation of the origin, nature, methods and limits of human knowledge; dictionary for ontology: study or a theory of the character of being or the kinds of things that have existence.) Much of traditional philosophy makes a (preliminary) distinction between the following fields. Ontology: the study of being or existence (what ‘is’); epistemology: the study of knowledge (what and how we ‘know’); phenomenology: the study of our experience (how we experience). In line with Hegelian views in this respect, the exposition in this book recognises that whereas we can distinguish these fields, they cannot be divorced.
→‘capital’ (especially ‘passive capital’ or ‘passive finance capital’). [3§1, sub 1; summary Fig. 3.2; 3§2, sub 1; 3§5.]
Something that is predominantly the case. When I use the term ‘generally’ I explicitly or implicitly refer to contingencies that are compatible with capitalism, whilst if those contingencies were to be generalised, there would no longer be capitalism [1§1-e].
The entity, institution or process that is necessary for the existence of an entity, institution or process posited earlier in the systematic exposition. Thus the ground is a condition of existence of a →‘moment’ presented earlier on. [GI-C§4; A§11.]
See also: ‘proximate moments and proximate conditions’.
The positing of a →‘ground’.
These terms are used in Chs. 10–11 and in the ‘General Summary and Conclusions’. The term ‘hard core of the state’ is shorthand for, in brief, the moments presented in Ch. 6. These are especially the state-granted rights of: (1) claims of entitlement to private property in the earth; (2) claims of entitlement to private property in means of production other than for production by the claimant; (3) claims of entitlement to employ labour as combined with the appropriation of the surplus-value produced by that labour; (4) claims of entitlement to existence (in the sense of →‘allowance’) and the two legislative frameworks in which these four are concretised (6D4 and 6D5); as well as (5) the state’s public security framework (6D6). The term ‘hard core frameworks of the state’ refers more specifically to the legislative frameworks just mentioned (6D4–6D6). It is contrasted with the term →‘capital accumulation frameworks’.
(dictionary for commensurate: a.o. having the same measure). At the market, commodities are constituted as commodities (→‘market transformation of entities’), whence these are commensurated in terms of money, that is, in terms of the money-form of →‘monetary value’. ‘Ideal pre-commensuration’ refers to the anticipation of this process during production, whence the elements of the →‘production process’ (that is, the stocks and the commodities in process of production) are accounted in terms of monetary value. [1§10.]
Identical to →‘surplus-value’.
The year flow of →‘surplus-value’ validated, calculated over the stock of the capital assets at the beginning of the year (cf. →‘validation’). [1§13, sub 3; 1§14, sub 6; 5§1, sub 1.]
Internal profit is the ‘integral profit’ (identical to →‘surplus-value’) that remains for the enterprise after the distribution of interest to banks and other external financiers. The concept of internal profit is introduced in 3§1 (cf. Fig. 3.2b) and amplified in 5§1 and 5§2. Internal profit includes ‘rent’ (explained in Appendix 3C). Next to the distribution of interest, another part of the surplus-value (or of the internal profit) is distributed to the state in the form of taxes (8§7 and 8§7-a; cf. Fig. 8.10).
The year flow of the →‘internal profit’ validated, calculated over the stock of the capital assets at the beginning of the year. (cf. →‘validation’). [5§1, sub 1.]
‘Investment’ always means investment in means of production. For the purchase of financial paper the terms ‘portfolio investment’ and ‘portfolio investor’ are avoided; for the latter, instead, the terms ‘finance’ – be it primary or secondary finance – and ‘financier’ are used. [3§8; 5§5.]
For this lemma the state is not relevant. Abstracting from the state, only enterprises invest (→‘investment’). This is the enterprises’ form of expenditure. As it is an expenditure, it is not a →‘saving’. From Adam Smith onwards, mainstream economics posits saving as a precondition for investment – moreover, saving is considered to be a justification for private profits including interest. The mainstream notion of a macroeconomic equality of investment and saving (I=S) can only be defended by way of an utterly strange definition, that functions as an assumption. This is to define the (→‘PVF’ accommodated) expenditure of investment as saving (!), thus an expenditure is defined as a non-expenditure. More specifically, the investment expenditure equivalent of retained profits is defined as a saving. This is utterly odd categorially, though it ideologically does the job of providing the alleged justification mentioned. [3§9.]
(dictionary for bifurcation: to fork or divide into two parts of branches). A particular duality, of which one pole is sensuous and the other super-sensuous. The sensuous pole refers to an entity or process. The super-sensuous pole refers to the →‘monetary-value dimension’ that in empirical reality is ascribed to the entity or process via a →‘trans-abstraction’. This book presents three inward bifurcations: that of the commodity [1§5]; that of commodified labour-capacity [1§6]; and that of the capitalist production process [1§10]. These inward bifurcations implicitly refer to the →‘outward bifurcation’ for which these inward bifurcations provide major solutions (that is, →‘sublations’).
Labour-capacity is the potential capacity to exert ‘labour’, the latter being a particular manifestation of the former. ‘Labour-capacity’ is traded at the labour market at a certain →‘wage rate’. [1§6; 1§6-c.] ‘Labour’ is employed within enterprises, the actual labour being exerted at a certain →‘productive power’, which is a composite of the ‘technique-associated productive power of labour’ and the ‘intensity of labour’. [1§14.] (Marx, and current marxian political economy, uses the term ‘labour-power’ for the term ‘labour-capacity’ above [1§6-d].)
The term ‘framework’ in reference to legislation/regulation denotes that I present a very general categorisation of legislation instead of detailed specifications (in the end those that one finds, depending on the field, in the hundreds or thousands of pages of the legislative codes).
There are two main conditions for the legitimation of the state. The first, yet abstract-general, condition is that the state posits its (non-)action in terms of the (putative) general interest [6§6], and that it posits granted rights in the form of legal rights [6§8]. The state so posits itself as an ‘impartial’ extraordinary institution above and outside the opposing particular economic interests. However, given that the state de facto grants the core claims to →‘capitalist economic rights’ indeed in the form of ‘rights’, it constitutes vis-à-vis the capitalist economy a →‘separation-in-unity’ within the capitalist system [6§7]. The adjective ‘putative’ in the phrase ‘putative general interest’ is to be taken as denoting that the state proposes its actions to be in what the state itself considers to be the general interest. Thus, rather than defining what constitutes the ‘general interest’, 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. The second main condition for the legitimation of the state is that it must gain a vast-majority →‘compliance’ for its (non-)actions [6§5]. (The requirement of a ‘vast’ majority is specified in 6§18 on the state’s ‘public security framework’.) The state’s seeking of this vast-majority compliance, and hence ‘legitimation’ is a core theme throughout Part Two of the book.
The interconnected macroeconomic succession of: (1) production predicated on →‘pre-validating bank finance’, (2) →‘validation’ of production by expenditure, (3) distribution of part of the validated surplus-value to external financiers, and (4) the resulting →‘internal rate of profit’, as determining (1) and so forth. [5§6.]
In this book ‘manifestations’ denote the final stage of the →‘systematic-dialectical exposition’. Manifestations are presented in the last two chapters of Parts One and Two and in the single chapter of Part Three; that is, at the point when the exposition of the →‘necessary’ →‘moments’ (the necessary conditions of existence) of the capitalist system has been completed (Chs. 1–3 and 6–8). Manifestations have three main characteristics. First, they are implications of the necessary moments – implications that have most often a →‘tendency’ character. Second, manifestations are the culmination of the synthetic exposition – building on that of the grounding moments. Third, whereas those grounding moments reveal the reproductive strength of the capitalist system, the implications of the simultaneous interaction of these grounding moments are expressed in concrete manifestations that reveal not only reproductive strength but also reproductive vulnerability. [A§12.]
The →‘trans-abstraction in practice’ at the market, through which entities are constituted as commodities, that is, as dual entities in the aspects of, on the one hand, sensuous →‘usefulness’, and on the other, non-sensuous →‘monetary value’. [1§5.]
(dictionary: a.o. basic process of organic functioning or operating). [1§9.]
(dictionary: a.o. an aspect of a thing; an essential or constituent factor). The term ‘moment’ refers to the constituents of each progression (stage) of the →‘systematic-dialectical exposition’. A moment is a composition of concepts that belong together; these concepts are thus posited as immediately connected, or connected by a mediating concept. In other words, a moment is a more or less cohesive institutional make-up, or a more or less cohesive set of entities, that can be analysed by itself (sometimes like a model) but that nevertheless derives its full meaning from its interconnection with other moments, and ultimately from its interconnectedness within the whole exposition. Thus moments derive full meaning through synthesis. [1§1-d; A§5.]
Monetary value is a concretisation and a necessary condition of existence of →‘value’. Like value in general it is non-physical and thus super-sensuous, and like value in general it is ascribed to entities, without comprising part of the bodily form of those entities. However, monetary value refers to either a past transaction (→‘validation’) in terms of sensuous money, or to an anticipation of a future transaction in terms of sensuous money. In this perspective (of past and anticipation), current monetary value is always both super-sensuous and ideal in the sense of non-actual – entities in their physical guise are actual. (‘Sensuous’ money includes pure ‘account money’ or bookkeeping entries by banks [2§8, sub 2].) Thus ‘monetary value’ must be distinguished from →‘money’. (For example, usually only a minor fraction of enterprises’ assets exists in the form of money; all other assets are valued in terms of the super-sensuous monetary value, and moreover of anticipations of this super-sensuous monetary value.) [1§4; 1§10 for the anticipation.]
The super-sensuous dimension of capitalist economic entities. It is the result of the mundane practice of identifying →‘value’ with →‘monetary value’. [1§4.]
The actual monetary-value product of labour (mLα), which is the →‘value-added’. [1§14, sub 6.] In 3§10 (sub 2) a distinction is made between this ‘actual monetary value of labour’ and the prior and during production ‘planned’ monetary value of labour (that is, prior to the →‘validation’ (the sale) of the output of production). See also ‘unit monetary value of labour, actual (m)’.
The unity of measure and medium of one-dimensional value. Unlike the entities that money measures, money has no inherent content (even if some particular form of money may be more adequate than another). Money has no inherent value. Money is inherently merely a quantifier of one-dimensional value. [1§4.] Concretely money is created ‘ex nihilo’ (out of nothing) by banks, on the basis of a reciprocal credit relationship between the bank and a client. [2§8.]
(dictionary: being essential, indispensable, or requisite). In this book this term refers to phenomena (entities, institutions, processes) that are required for the existence and reproduction of the capitalist system. A distinction is made between necessary grounding →‘moments’, that is, moments presenting necessary conditions of existence (Chs. 1–3 and 6–8) and moments presenting implications of those grounds as revealed in their →‘manifestations’ (Chs. 4–5, 9–10 and 11). Necessity is implicitly or explicitly always counter-posited to →‘contingency’. [A§11–A§13, sub 1.]
A sample of 21 mature capitalist countries currently organised in the OECD, for which relevant more or less homogenised data go back to 1870. (Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK, USA. In 2015 their share in the world population is 13% and their share in world GDP 56%.) [Appendix 6A.] In Amplifications throughout the book the average of these is used as an empirical ‘exemplary’ for the capitalist system from 1870–2015. [6A-2 for the notion of ‘average’ in this context.]
(dictionary: study or a theory of the character of being or the kinds of things that have existence). →‘epistemology and ontology’.
(dictionary for bifurcation: to fork or divide into two parts of branches). A main institutional separation. In this book the only outward bifurcation is that between households and privately owned enterprises [1§1, 1§1-c, 6§1, 6§1-a]. Outwardly bifurcated entities are generally each driven by different objectives. In contradistinction, the different institutional entities of a ‘separation-in-unity’ are (ultimately) each driven by the same objective (→‘separation-in-unity’).
→‘capital ownership, passive’.
(dictionary: to position in advance or beforehand). [Hegel’s German: Voraussetzung ≠ Annahme = assumption.] An entity or constellation that is posited without the grounds of its existence – that is, the conditions of its existence – having yet been (fully) posited. The term ‘pre-position’ (instead of ‘assumption’) is used so as to indicate that these have a temporary status. It is claimed that all entities or constellations pre-posited can and will be grounded at a later stage of the exposition, whence at that stage these are no longer pre-positions. Distinguished from →‘presumption’. [GI-C§9 and A§7 – these two sections are almost identical.]
(dictionary: something presumed: taken for granted). The exposition in this book adopts three presumptions: (1) language; (2) the existence of the object of enquiry, that is, capitalist economies and states (as empirically exemplified by the current OECD countries as well as all other countries with a similar structure); (3) the object of investigation is systematic – which is a precondition for any scientific study of an object of investigation beyond mere descriptions. Distinguished from →‘pre-position’. [GI-C§9 and A§7 – these two sections are almost identical.]
The flow of money newly created in a reciprocal relation between bank and enterprise is an anticipation of production and realisation of that production in the future. The bank that creates this new money on the basis of a loan performs a private pre-validation of production, which is socially validated when the anticipated production is sold – the loan can then be redeemed. [2§10; expanded in 3§2.] Contrasted with the stock of →‘remaining pre-validating finance by banks’. Bank provided pre-validating finance (PVF) for enterprises is not only unconditionally necessary to the capitalist system; it is also fundamentally different from any other type of finance. One fundamental aspect is that this PVF is a pure ex nihilo accounting money operation, and another is that it requires no saving, neither prior to the investment that it accommodates, nor after it. Generally, saving is not necessary to the capitalist system. [3D2.]
This is a term that at times (when the preciseness of the text requires it) is used in contradistinction to →‘banks’ and other ‘pure’ financial enterprises. The latter (non-production enterprises) do not produce surplus-value and are, for the growth of their finance capital, dependent on the production and distribution of surplus-value from production enterprises (in the form of interest and dividend). [2§11; 3§1.]
The capitalist production process is a dual process of, on the one hand, a multifaceted physical-technical process, using a →‘technique of production’ [1§9], and, on the other, a one-dimensional ‘monetary valorisation process’ (→‘valorisation’). As duality the capitalist process is →‘inwardly bifurcated’ along the two poles indicated above [1§10]. The profit drive of enterprises means that this dual process is dominated by the valorisation process [1§11].
The productive power of labour goes along with the exertion of labour. Within the agreed amount of labour-time, labour-capacity (L) operates means of production, and so exerts labour at some productive power (Lα). The duality of the capitalist →‘production process’ implies that this productive power is a dual one. First, that of labour’s physical working up the plant and equipment to something qualitatively different (the physical gross and net output, for which there are no commensurate measures within and between processes). Second, that of the →‘valorising’ exertion of labour (measured as →‘value-added’, mLα). As the poles of this duality are commensurately inseparable, the productive power of labour regards both these aspects. [1§14.] The productive power of labour is the unique source of →‘value-added’, and hence also of →‘surplus-value’ (= integral profit). [1§14.] The productive power of labour covers two components (α=(ά) (ϊ)). First, the technique-associated productive power (ά), which usually diverges between sectors of production. Technology and techniques are creations by labour. Their commodification implies that these are themselves the result of the productive power of labour (perhaps in sectors different from where these are applied). The second component of labour’s productive power is the degree of intensity of labour (ϊ). At zero intensity (in effect a strike) there is no physical production and no production of value. [1§14.] This intensity is inevitably physically limited [2§2].
A distinction is made between ‘integral profit’ (= →‘surplus-value’) and →‘internal profit’ (in brief, surplus-value after the payment of interest to financiers). The term profit is used either when this distinction is not relevant, or when this distinction has not yet been introduced. In Chapter 1 (its 1§8–1§11) the term profit refers to the everyday casual meaning of this term: the quantitative difference between the monetary value of the commodity inputs and the commodity outputs. Profit is the monistic driving force of enterprises. Monistic refers to one-dimensional →‘monetary value’. The term profit is introduced in 1§8 as a transitional concept, until the introduction of the concept of →‘surplus-value’ in 1§12.
→‘integral profit rate’; →‘internal profit rate’.
(or proximate grounds). The immediate and most general conditions, at that point of the exposition, for that which was posited before. The exposition is not complete before all the conditions of existence of the starting point have been presented endogenously. ‘Proximity’ determines the order of their exposition. [GI-C§4; A§11, sub 3.]
→‘pre-validating finance of production by banks’.
→‘integral profit rate’.
→‘internal profit rate’.
Banks necessarily provide credit to enterprises, which is a flow of →‘pre-validating finance of production (PVF)’. This flow returns to the banks on aggregate spending, so cancelling the pre-validating credit. However, any non-spending of income interferes with this, and it implies that the bank is (continues to be) the enterprises’ financier for this amount not spent (3§3). The non-redeemed part of the PVF, which equals the saving by labour and capital owners, is called the remaining pre-validating finance (RPVF). Hence banks provide, in effect, next to a money-creating flow of finance (PVF), a non-money-creating stock of finance (RPVF) – the latter being based on previous money creation, and now being based on a triadic debt-credit relationship between the bank, the saver of money and the enterprise (3§6, cf. 3§3). At the same time, the non-spenders are potential ex post financiers. To the extent that the latter explicitly enter into a (additional) finance relation with the enterprises – thus substituting for the bank RPVF – they become actual ex post financiers, or owners of (additional) finance capital. A ‘loanable fund’ of current and past saving is no precondition for investment. Ex post substitution for the bank’s RPVF by capital owners contributes to the banks’ ongoing accommodation of the accumulation of capital via their PVF. [3§6.]
The continued existence of the capitalist system. This requires a series of interconnected ‘conditions of existence’, that is, a series of interconnected →‘grounds’.
There are two main manifestations of ROC. The first one goes along with a process of (gradual) movement of a (conglomerate) enterprise from one sector of production to another (Part One, Ch. 4) or within the same type of sector from one country to another one (Part Three, Ch. 11). This process encompasses two phases. The first one involves the liquidation of existing plants or divisions of an enterprise – either by selling them and/or by the non-replacement of depreciated means of production. The second phase is that of a gradual investment in a new sector of production, or that of taking over an enterprise (or a division of it) in a new sector, whence we have conglomerate take-overs, followed by investment in the new sector of production. The two phases may also be combined in processes of conglomerate merging of enterprises, together with a shift in investment from the one to the other part of the conglomerate. [4§2-b and 11§11.] The second manifestation is associated with the cyclical over-accumulation of capital (Ch. 5). It occurs either just before (big enterprises) or during the recession (big and other enterprises) as a reaction to falling profit rates. In brief this ROC involves the (partial) violent cyclical destruction and so cyclical devaluation of capital via the closing or the reorganisation of production plants. Hence part of the capital produced and accumulated in the previous phases of the cycle is annihilated. This may involve intra-enterprise reorganisation and inter-enterprise centralisation of capital. [5§9; 5§9-b sub 6.]
→‘remaining pre-validating finance by banks’.
Non-expenditure of an income flow. Saving is contingent. Whereas the →‘pre-validating finance of production by banks’ is a precondition for investment, saving is no precondition for investment [3§2]. →‘investment versus saving’.
(dictionary: external appearance as distinguished from true character; appearing to be true but not being true or certain).
A main institutional separation. In contradistinction to an →‘outward bifurcation’, the different institutional entities, or components, or poles, of a ‘separation-in-unity’ are (ultimately) each driven by the same objective, which articulates their unity. The core separation-in-unity (s-i-u) presented in this book is that of the capitalist economy and the capitalist state (6§7). Of the four other s-i-u’s, two are presented at the end of Chapter 2 and two at the end of Chapter 7. These are the s-i-u of enterprises and banks (2§11); the s-i-u between the shareholders – or more broadly the ‘passive capital owners’ – and the executive management of the enterprise (2§14); the s-i-u’s between the state’s administrative and judiciary branches (7§18); and between the state’s administrative and deliberative branches (7§23). [2§11-a and 6§7-a.]
Abstract minimum conditions that any imaginable society must meet, in order for it to be a ‘potentially continuous’ social whole [1§0].
Within most sectors of production, the enterprises (and their plants in case of multi-plant enterprises) are not homogenous. These are rather heterogeneously stratified according to the characteristics indicated at the end of this entry. The enterprise that successfully initiates a new technique of production secures a rate of profit above that of the existing enterprises (plants) in the sector. Because each enterprise is burdened with the fixed costs of its already accumulated capital, it will only scrap old plants when a new technique offers net profits (‘net’ that is, taking into account the costs of scrapping old plants) greater than the profits on its existing plant. Therefore, plants embodying new techniques will in general not be immediately adopted by all enterprises, whence each sector of production tends to be composed of a stratification of plants dated according to technique, cost of production, value-productivity of labour and a resulting stratification of rates of integral profit. [4§4.]
(MW dictionary: to negate or eliminate – as an element in a dialectic process – but preserve as a partial element in a synthesis; see also Inwood 1992, pp. 283–5.) In this book sublation refers foremost to a (partial) supersession/resolution of the shortcomings of the starting point’s →‘outward bifurcation’, without that bifurcation itself being undone. In other words, sublation refers to a derived mode of existence of the starting point’s outward bifurcation, a mode that when posited at that stage of the dialectic (without further grounds) may or may not be stable. In this book a sublation has always the character of the (partial) grounding of the starting point’s outward bifurcation. Grounding is the same as the determination of a (partial) condition of existence of the outward bifurcation. The term is used in Chapters 1 and 6 only. Generally, however, any other grounding of an earlier moment in these and other chapters can be considered as a sublation.
→‘capitalist and managerial class (CMC) and subordinated working class (SWC)’.
The component of →‘value-added’ that is appropriated by enterprises (the other component being wages) – all in monetary dimension. The concept is used either microeconomically or macroeconomically. [1§12.] Surplus-value is independent of the contingent way in which the enterprise is financed. In 3§1, and more detailed in 5§1, surplus-value is decomposed as the sum of internal profit (retained and distributed) and interest, the latter being the enterprises’ external financiers share of the surplus-value.
A measure for the degree of exploitation of labour as reflected in the capital–labour distribution of income, defined as the capital income share (surplus-value, Π) over the labour income share (wages, wL). [2§5.]
→‘capitalist and managerial class (CMC) and subordinated working class (SWC)’.
In this book ‘systematic-dialectical exposition’ (in brief ‘exposition’) refers to the systematic presentation of a constellation (the object totality) that is →‘ontologically’ systematic (in case →‘capitalism’). The exposition is about the constellation’s constituents (more precisely its →‘moments’) that are necessary for its continued existence (Chs. 1–3 and 6–8) as well as about the latter’s implied →‘manifestations’ (Chs. 4–5, 9–10 and 11). The exposition thus abstracts from →‘contingencies’. The core of the exposition lies in the interconnection of the constellation’s constituents. These constituents (moments) are presented stage-wise (the book’s consecutive divisions and sections) as proximate conditions of existence of the constellation (→‘proximate moments and proximate conditions’). The focus is indeed on interconnection, rather than on merely the partial analysis of constituents (moments) treated separately. Contrasting ‘analysis’ with ‘synthesis’, the systematic-dialectical exposition results in a synthetic outline of the constellation and functioning of the capitalist system. [GI, C§4; A§10–A§14.]
A qualitatively and quantitatively specific combination of nature, means of production and labour together with a qualitatively specific labour process [1§9]. The particularly capitalist →‘production process’ means that techniques and the technical production process (rather than being ‘pre-given’ and neutral) are devised to be geared to →‘valorisation’. [1§11.]
A tendency should be distinguished from an empirical ‘trend’. A tendency is the generation of a particular form of an entity (e.g. the corporate form of the enterprise) or the particular quantitative expression of an entity or process (e.g. equalisation of inter-sector rates of profit), this generation being predicated on certain forces or compulsions (see 2§12 or 4§2 for examples). A tendency may be counteracted by other tendencies, or by other lower-level complexities (see 4§14 for an example). A tendency is a determinant whose actualisation might not always predominate in any individual case. However, for it to have the status of a tendency (in this book), it must apply to a significant enough number of cases such that, when abstracting from counteracting tendencies, it has a predominant character for the totality. [2§12-a and A§14.]
Upon the actual market trade, heterogeneous entities are commensurated in terms of money, that is, something that is no part whatsoever of their concrete physical bodily form or concrete constitution. Along with it the alien dimension of →‘monetary value’ is ascribed to the entity, or rather vested in the entity – it now being a ‘commodity’. The ‘trans-abstraction in practice’ is described in the previous sentence. ‘Trans’ refers to transcendental (in the sense of a move beyond the ordinary limits of entities); ‘abstraction in practice’ refers to the fact that this is not a mere mental abstraction (behind the writing desk, so to speak), but one that is executed in the everyday practice of market trade. Indeed we are ‘doing’ it all the time. [1§4; 1§4-b.]
The component ‘m’ in the →‘monetary-value product of labour’ (mLα). Practically ‘m’ measures the validation, the sale, of the net product of labour [1§14, sub 8]. (See also 3§10, 4§6 and 4§11.)
(dictionary: being of use or service). The specific characteristics of the physical input and output of enterprises, along multifaceted dimensions. (The terms ‘use-value’ and ‘utility’ are avoided because in Marginalist and Neoclassical discourses these terms refer to ‘subjective use-value’ – which anyway is not applicable as such for the inputs and outputs-supply of enterprises – and in some strands of these also refer to an assumed one-dimensionality.) [1§3-b.]
(dictionary: a.o. to make valid). The turning of the output of enterprises into money, that is, the sale of the output [1§10]. Validation may also refer to the realisation of a component of the output, especially surplus-value [3§10].
Shorthand for ‘abstract general one-dimensional value’, which is a homogenous common denominator, which absorbs concrete specificity [1§3 and 1§3-a]. Value is non-physical and thus super-sensuous [1§4]. Money is a necessary condition of existence of value (→‘monetary value’). ‘Value’ is distinct from →‘usefulness’, ‘use-value’ and ‘utility’. Each of the latter three refers to physical qualities of a good or of a commodity.
Value-added is the value product of labour (mLα) as resulting from the →‘productive power of labour’. It is equal to the sum of wages and →‘surplus-value’, all in monetary dimension. The concept is used either microeconomically or macroeconomically. [1§12; 1§14, sub 8.]
(translation of the German noun Verwertung). The production of ideal →‘monetary value’. (See also →‘ideal pre-commensuration’.) This monetary value remains ‘ideal’ until the output of production is actually →‘validated’. [1§10 and addendum 1§12-b.]
A term making explicit that the applied →‘techniques of production’ are not neutral, but rather geared to valorisation and profit making. [2§2-c; 2§4; 2§5.]
A sum of money per unit of labour-time – the unit being specified as, for example, one hour or one year, the latter in the going ‘full-time equivalent’. More specifically, commodified labour-capacity is bifurcated into ‘capacity rented out for a certain amount of time’ and ‘rent in monetary value for a certain amount of time’ the name for the latter being the ‘wage for a certain amount of time’ or, briefly, the ‘wage rate’. [1§6.]
(dictionary: a.o. all things that have a monetary value). Wealth refers to all durable entities or claims that have a monetary value. →‘Capital’ is a form of wealth. However, this does not mean that any wealth is ‘capital’. Capital is a form of wealth geared to production, with the purpose of selling that production so as to make a profit. [8§12; Appendix 3C-1 (sub 6).]