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THE RELATIONSHIP BETWEEN THE STATE AND CAPITAL AT THE PRODUCTIVE CORE OF THE ECONOMY

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Future of Post Keynesian Economics session at 12th International Conference

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THE RELATIONSHIP BETWEEN THE STATE AND CAPITAL AT THE PRODUCTIVE CORE OF THE ECONOMY

  1. 1. THE RELATIONSHIP BETWEEN THE STATE AND CAPITAL AT THE PRODUCTIVE CORE OF THE ECONOMY
  2. 2. The productive core of the economy • The wage/labor system • The monetary production system • Competing interests of particular capitals
  3. 3. The role of the state in the productive core of the economy • Maintain the wage/labor system • Issue the sovereign currency and maintain its legitimacy • Mediate the competing interests of particular capitals
  4. 4. The capitalist state and the business enterprises • Together determine the volume of employment and output • Create a demand for state money as a prerequisite to access to the social provisioning process • Wage laborers produces what the business enterprises and the state want to produce, and, in the process, materially reproduce themselves • The origins of profit lie in the ability of the state and the capitalists to force Labor to produce surplus
  5. 5. A summary of Post Keynesian theories of the state so far • Chartalism • Policy prescription of permanent and structural programs aimed at full employment, etc. • Class theoretic understanding of production • Role of the state in generating capitalist profits
  6. 6. Reflections… • So what’s the issue? We’ve identified what we think the capitalist state does or should do. • We’ve identified what capitalism really is about. • We’ve identified that the crises we face are not for lack of economic capacity, and that all reasons are political. Is there anything more to say about the state?
  7. 7. People who talk about revolution and class struggle without referring explicitly to everyday life… such people have corpses in their mouths. - Raoul Vaneigem, The Revolution of Everyday Life
  8. 8. Fundamental assumptions revisited… Assumption # 1: The “economic” and the “political” are formally and institutionally separate.
  9. 9. Fundamental assumptions revisited… Assumption # 2: Capital accumulation is an “economic” process.
  10. 10. Fundamental assumptions revisited… Assumption # 3: The “national economy” is the fundamental unit of analysis.
  11. 11. The composition of this book has been for the author a long struggle of escape, and so must the reading of it be for most readers if the author's assault upon them is to be successful — a struggle of escape from habitual modes of thought and expression. The ideas which are here expressed so laboriously are extremely simple and should be obvious. The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds. J. M. KEYNES 13 December 1935

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