Although I speak very violently, I have a sense of friend and foe, right and wrong. I have a lot of respect for Mr. Liu Jipeng. This article discusses with Mr. Liu Jipeng on the matter of "capital", and also asks for advice.
What is Capital? I don't think I understand it in terms of the Marxist definition. I agree with Marxism's view of capital as a relation of production, and I even regard capital as an international relation. However, I feel that it is too abstract to regard capital as a relation of production and international relations, and it is not easy to distinguish friend from foe, right from wrong, and it is not easy to grasp it in theoretical research and economic practice.
I feel that it is better to concretize capital.
I have also used the concept of capital in my previous articles, and the concept of capital I use has two connotations: first, it is the actual control of the right to issue money; The second is the scope of use of the currency issued by using the currency issuance power in its possession, including the industry, geographical scope, and the scale of the currency issued by oneself.
The size of the capital is directly proportional to these two elements. That is, the greater the control of the currency issuance, the more money issued, and the greater the control over the circulation of money, the greater the capital.
Second, the larger the scope of use of money, for example, the wider the field, the more industries, and the wider the geography that a certain currency is allowed to enter, the stronger the power of capital.
It can be expressed by the following formula:
Monetary power (power) = amount of money issued × range of currency used
Obviously, as long as one of the two elements, the amount of money and the scope of its use, is zero, the amount (strength) of capital is zero. If money cannot be spent, it does not constitute "capital"; There are enough manpower, resources, but there is no money to mobilize them, and there is no way to form capital.
In my opinion, the right to issue currency is a key component of political power, and it is also an important part of sovereignty, and it is indispensable. Private individuals are not allowed to have the right to issue money, and if private enterprises want to obtain money, they must pay labor or sell goods, and then use these currencies to buy daily necessities or means of production. The currency in which the expenditure is made in this way is not the issuing currency. However, if private individuals or private financial institutions are allowed to engage in banking business such as investment, deposit and lending, payment, and settlement, then the private or private financial enterprise will have a certain amount of money issuance power, because it can decide the object and field of currency issuance by virtue of the investment business it is engaged in, and it can also control a considerable amount of money circulation by virtue of the business of deposits, loans, payments, and settlements it engages in.
This forms the first condition of private capital: the right to issue money.
The second condition, the scope of the use of money, requires the approval of the regime. If the regime allows private or private financial enterprises to engage in medical care, and "allows social capital to flow into the medical field", then this capital becomes "medical capital"; If they are allowed to engage in real estate, this capital becomes real estate capital; If they are allowed to engage in agriculture, industry, commerce, and education, then this capital becomes industrial capital, agricultural capital, commercial capital, and educational capital. This act of capital is an encroachment on the sphere that could only be used by the regime to organize productive labor using the money it issued, and of course, it is also a transfer of the rights and obligations of the regime in its own domain to private capital.
I pay attention to the circulation of money, that is, the process of money from issuance to recycling. The circulation of money is related to the circulation of goods, labor, services, resources, and enterprise equity (or commonly known as manpower, material resources, and resources; material resources are indirect manpower) The circulation is like a shadow; However, the direction of the circulation of money and the circulation of goods, services, resources, corporate equity, etc., are opposite! Among them, the circulation of money is the "master" and the determining factor, and the circulation of goods, services, resources, and enterprise equity is the "servant" and the determining factor; The circulation of money determines the circulation of commodities, etc., and determines the type, quantity, and direction of circulation of commodities.
Through the issuance of currency, the political government independently determines the quantity, field, object, timing and method of issuance, and determines the type, quantity, and direction of circulation of commodities. If the regime has a strong state-owned economy, it can rely on the industrial, peasant, and commercial systems at its disposal to sell goods produced by the state-owned economy to society and recycle the money it has issued.
This completes the cycle of money.
The completion of the monetary cycle is the external manifestation of money in the process of organizing production and labor by the political power. In my opinion, the amount of money issued is not directly related to the amount of money that is recovered, and the amount of money that is collected does not determine the amount of money that is issued. This is one of the biggest differences between me and Mainstream Monetary Theory. Please also note that the credit and issuance of money must be based on a strong "public-owned economy" or "state-owned economy", otherwise the credit of money (i.e., prices) will inevitably be turbulent.
Is it necessary for regime-controlled "all-people-owned" enterprises to make a profit (in the form of accumulating more money in order to expand reproduction)? No. The financial affairs of enterprises owned by the whole people adopt the principle of "separating revenue from expenditure," and the production and living expenses required by them are appropriated by the political regime, and their sales are directly deposited in the bank and returned to the "state treasury," and have nothing to do with their income. Because its expenses have nothing to do with income! Therefore, of course, the "enterprises owned by the whole people" do not have the problem of expanding reproduction only by making profits, and of course there is no need to pursue profits and "seek profits"; There is also no need for a tax (if the enterprises owned by the whole people are allowed to make a certain profit, the local government can also impose a certain tax on the enterprises. However, it is obvious that there are some enterprises owned by the whole people, such as military enterprises, cutting-edge scientific research, education and medical care, and infrastructure. Enterprises under collective ownership, with the enterprise as the unit of settlement, are financially independent, and can have a certain amount of profits (if there is profit, there must be taxes), which can be used to expand reproduction, or they can borrow money from state-owned banks (the amount is limited) to expand reproduction.
In the process of this cycle, because the regime has a strong state-owned (public) industry, state-owned (public) agricultural production system and commercial system, the regime has enough ability to determine the pricing of bulk commodities, and can adjust the distribution of benefits in different industries by adjusting commodity prices. In addition, because it has a powerful state-owned industrial system in its hands, it can distribute the labor force of different industries through the political power, form a rational structure of various industries, and form an organic coordination and complementarity between various industries, so that there will be no waste and social production will develop proportionally and at a high speed, and the political power will also have sufficient capacity to form the key points of construction in the fields of industry, agriculture, scientific research, military, education, public health, infrastructure, ideology, and culture.
(There is a saying that capital accumulation is called "capital accumulation", and for private production, "capital accumulation" is required.) But for the regime, I don't think there is a question of "capital accumulation", especially the "accumulation of money", only the accumulation of various products of labor and the fruits of labor!)
Obviously, the political power has organized socialized large-scale production in an efficient, rationally structured, and proportional and scientific manner through the means of state-owned economy and currency issuance, as well as the people's livelihood security systems such as education, medical care, public health, military, infrastructure, ideology, and culture, which can prevent the blindness and waste of privatized production and improve the quality and speed of social development.
The political regime uses the method of issuing money to organize socialized large-scale production, which benefits the country and the people, and of course cannot oppose the interests of the people.
However, I do not approve of the regime's control of the right to issue currency as "capital," nor do I approve of the regime's use of its own currency, and the use of its own currency in all fields, industries, and regions to organize production and construction, which is regarded as "capital organizing production and labor." This is essentially the political regime's reliance on the "state-owned economy" or "public-owned economy" and the use of monetary means to organize the production and construction of various industries.
Please also note that currency is issued by the political regime, and it is the subjective organization and guidance of the political power on the objective and practical role of social and economic construction, and the quantity, field, object, timing, method of issuance, and currency recovery are important means for organizing production and construction; Currency issuance is a tool for organizing production and construction, forming economic priorities, and supporting the country's mobilization capacity! Currency issuance has a strong role in promoting and shaping industrial and agricultural production and the construction of people's livelihood such as military, medical care, education, ideology and culture. The issuance of currency depends on the needs of socialist industrial and agricultural development, the guarantee of people's livelihood and the quality and quantity of social labor! It is not limited by any "anchor" such as gold and silver.
For example, I regard the issuance and recycling of money as the reins of an ox, and then industrial and agricultural production and various kinds of security are a "cow"! Monetary means are the "reins" of man's control over the "ox," that is, a tool. The "reins" of money play a decisive role in the actions of the "ox", and the control of the "reins" controls the "cattle". Of course, the "ox" itself also has its own initiative, and it can also have a certain counter-effect on the "reins". (This view was inspired by Li Shenming, a senior of the Chinese Academy of Social Sciences, and I would like to express my heartfelt thanks.) )
What is capital? On the surface, capital is also manifested as: First, a certain force (usually not the central power of the state) has a certain right to issue money, and can determine the corresponding amount of currency to be issued, the field of issuance, the object of issuance, the timing of issuance, and the method of issuance, and use its own banks, financial institutions or commercial systems to recover money, or intercept and recover the currency issued by other forces (such as the central power of the state), so as to increase its own right to issue currency. The second is the field, industry, and region of use of the currency issued by this power. Again, these two elements are indispensable; If one of these factors is zero, then the power of capital is zero. It can also be expressed with the above formula:
The amount of private capital (how strong it is) = the amount of money issued × the extent of the use of the money
If the regime allows private capital to enter the fields of real estate, medical care, education, and military industry, then private capital in real estate, private capital in medical care, private capital in education, and private capital in military industry will be formed. If the regime rejects private capital into these areas, it cannot form private capital in these areas.
Private capital also has the ability to allocate labor in various industries, distribute the interests of various industries, form the focus of economic development, and mobilize manpower and material resources! However, these capabilities of private capital will inevitably constitute irreconcilable contradictions and conflicts with the corresponding capabilities of political power!
Marxism believes that only the living labor of laborers can create value; Money as a tool, as well as the means of production and labor tools such as land, factories, machines, etc., does not create value. I couldn't agree more.
It is not difficult to understand that the most fundamental thing that can be mobilized by the central power or private capital, whether it is the central power or private capital, is "manpower," and material resources are only the result of human labor, and they are indirect "manpower"! However, in society as a whole and for a certain period of time, the labor force is limited, and if a certain amount of labor force is mobilized and occupied by private capital, it will be difficult to be mobilized and used by the political power!
Therefore, the existence of private capital is very likely to erode the mobilization capacity of the regime. If private capital sits on a large scale, it is entirely possible to deprive the regime of its right and ability to mobilize human and material resources to a corresponding extent. This will inevitably lead to a struggle between the regime and private capital over money and the scope of its use! Obviously, in this struggle, the political power represents the interests of the entire people, while private capital only represents its own private interests, and cannot be primarily concerned with the interests of the people and social benefits.
If we realize that money is "issued" by the regime according to the needs of the country's industry, agriculture and people's livelihood industries, and that the state-owned industrial, agricultural and commercial system is responsible for recycling (i.e., fulfilling the credit responsibility for these currencies), rather than being "anchored" to gold and silver (not limited by the amount of gold and silver reserves), then we should be able to realize that the methods by which private capital seizes the right to issue money are roughly as follows:
The first is to directly steal the right to issue currency. For example, the central bank system, which issues money based on foreign exchange reserves;
the second is to establish an industrial, agricultural and commercial system controlled by the forces of private capital, and to intercept the currency issued by the regime;
The third is to expand the scope, industry, and geographical scope of the use of money issued by private capital, and to seize the scope of use of money from the hands of the regime;
Fourth, private capital sets up banking institutions and financial institutions, engages in banking business such as investment, deposit and loan, settlement, and payment, and develops financial products such as wealth management, trusts, futures, funds, securities, insurance, reinsurance, virtual currency, and P2P, and engages in financial business, so as to usurp more currency issuance rights;
Fifth, it rejects the settlement and payment qualifications of the "credit currency" issued by the regime, and uses private capital's own currency, such as gold and silver, or uses a certain foreign currency for settlement and payment, so as to attack, restrict, or even eliminate the regime's right to issue money;
Sixth, the "state-owned" or "public-owned" industrial and agricultural production system and commercial system controlled by the regime should be dismantled, so as to weaken the regime's ability to recycle money.
Seventh, it is inevitable that the people's livelihood security industries, such as medical care, public health, education, housing, and old-age care, will also be turned into profit-seeking industries, so as to facilitate the accumulation of greater private capital. This will inevitably lead to the poverty of the working people, and will inevitably deprive a considerable part of the working people of their most basic rights such as education, medical care, hygiene, dignity, and security.
Of course, because for the sake of accumulation, private capital will inevitably not attach importance to national dignity, sovereign independence, and military strength in addition to ignoring the people's livelihood, and even, for the sake of capital accumulation, it can collude with external forces and sell these dignity and sovereignty.
I feel that the purpose, effect, and connotation of the use of money by the central government and other forces after they have mastered the corresponding power to issue currency and the scope of use of currency are fundamentally different, and may even be opposed, so we must not confuse the two. In fact, I do not agree with the term "state-owned capital", because this argument distorts the meaning of the political regime's control of the right to issue money, and regards the right to issue money that should be held by the political power and serves the people as a right that can be shared with private capital. Obviously, it ignores the essential nature of the regime of currency issuance.
Forces outside the regime that acquire a certain amount of currency issuance rights and are able to continuously expand the scope of their own currency use constitute private capital (chaebol). It is not difficult to see, then, that private capital is likely to be extremely unfavorable to social production, the mobilization capacity of political power, the fair distribution of society, and the protection of people's livelihood, and it is also likely to lead to blindness, disorder, and structural imbalance in production. Therefore, capital and the people are most likely opposites! It is also very likely to be opposed to the ability of the regime to mobilize manpower and material resources, and the prosperity and strength of the country and the nation!
Therefore, it cannot be said that "do not pit capital against the people", not "there is no labor without capital"!
To reverse the current unfavorable economic situation, it is necessary to recover monetary sovereignty, to "make state-owned enterprises bigger, stronger and better", to develop the national private economy, and to tighten the comprador economy, rather than to "respect capital and revitalize the stock market" in a general way.
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Author: Hong Jun