The Tools Of Law That Shape Capitalism: And How Altering Their Use Could Give Form To A More Just Society

247 Pages·2019·3.416 MB·English

by  Koen Byttebier

Economic and Financial Law & Policy –
Shifting Insights & Values 3
Koen Byttebier
The Tools of
Law that Shape
Capitalism

And How Altering Their Use Could Give
Form to a More Just Society
–
Economic and Financial Law & Policy
Shifting Insights & Values
Volume 3
SeriesEditors
KoenByttebier
Brussels,Belgium
KimvanderBorght
Brussels,Belgium
This book series focuses on presenting critical legal and interdisciplinary research
regarding the tools and instruments of free-market-driven societies and their
economies.
Forthelastfewdecades,theworldmarketshavebeeninturmoil,toalargeextent
isaresultofvalueandpolicychoiceswhichhavebeenmadesincethelatemiddle
ages.Asaresult,onaglobalscale,economiesandthelegalsystemsgivingformto
them, have mainly if not exclusively become based on selfishness and greed, a
reality which is moreover explicitly propagated by the theories of economic
neo-liberalism.
It has neverthelessbecome clear in therecentpast thatsaid freemarket toolsand
mechanisms – such as private money creation by banks, next to the way huge
corporationsingeneralfunctionanddeterminetheoutcomeofeconomicprocesses–
result in disastrous consequences, especially when remaining uncorrected by law
andwhennotbeingsubmittedtoclearpublicpolicyinterventionmeasures.
Despitetheevidenceandgrowingunderstandingofthecausesandconsequences
of neoliberal policy, few alternatives for the capitalist model as currently
implemented,havesofarbeenproposed.
In order to meet these concerns, this book series aims at offering an outlet for
variousformsofscientificresearchoutput,bothmonographsandeditedcollections.
The objective ofevery bookoftheserieswill hereby betolook critically atthe
legal methods and mechanisms shaping the free markets, and even to suggest
alternativesforthese.
Althoughthebookseriesisinitiatedbylegalscholars,itneverthelessaimstobe
truly multi- and interdisciplinary. The books series therefor welcomes and will
incorporate all relevant disciplines, including law, economics, philosophy, ethics,
religion,psychology,sociology,anthropologyetc.
Moreinformationaboutthisseriesathttp://www.springer.com/series/15643
Koen Byttebier
The Tools of Law that Shape
Capitalism
And How Altering Their Use Could Give
Form to a More Just Society
KoenByttebier
CenterforEconomicLawandGovernance
FreeUniversityofBrussels
Brussels,Belgium
ISSN2522-5243 ISSN2522-5251 (electronic)
EconomicandFinancialLaw&Policy–ShiftingInsights&Values
ISBN978-3-030-24181-0 ISBN978-3-030-24182-7 (eBook)
https://doi.org/10.1007/978-3-030-24182-7
©SpringerNatureSwitzerlandAG2019
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theeditorsgiveawarranty,expressorimplied,withrespecttothematerialcontainedhereinorforany
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For Anne and Michel (+) Claeys,
For Padma and Giri
Contents
1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 FulfillingMan’sNeedsAsOneoftheMainReasons
WhySocietiesAreThere. . . . . . . .. . . . . . . . . .. . . . . . . . . . .. 1
1.2 FurtherScopeandMethodologyofThisBook. . . . . . . . . . . . . . 4
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2 MainLegalBuildingStonesoftheCapitalistSocio-Economic
Order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1.1 MoneyAsaSocietalConstruct. . . . . . . . . . . . . . . . . . . . 9
2.1.2 TheOriginandLaterDevelopmentofthePresently
PrevailingSystemofMoneyCreationinaNutshell. . . . . 13
2.1.3 AFirstBigLesson:MoneyIsCredit/CreditIsMoney,
andWhyThisIsTroublesome. . . . . . . . . . . . . . . . . . . . 21
2.1.4 ASecondBigLesson:Banks(‘Interests)Prevail. . . . . . . . 28
2.2 TheCompanyLawForm(orHowAlsotheFunctioning
ofEnterprisesIsCompletelyDeterminedbythePrinciples
ofCapitalism). . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . 32
2.2.1 TheBreakthroughoftheCompanyFormAsaMethod
ofOrganizingEnterprises. . . . . . . . . . . . . . . . . . . . . . . . 32
2.2.2 TheFurtherBehavioralInfluenceofthePrinciples
ofCapitalismonEnterprises. . . . . . . . . . . . . . . . . . . . . . 33
2.3 TheCapitalistModelofStateFinancing. . . . . . . . . . . . . . . . . . . 54
2.3.1 WhyAccordingtoLiberalandNeoliberalDoctrine
theRichShouldBeExemptfromPayingTaxes. . . . . . . . 54
2.3.2 SomeFurtherConsequencesoftheLiberal
andNeoliberalTaxationApproach. . . . . . . . . . . . . . . . . 56
2.3.3 NeoliberalMethodsofStateFinancingAsanEndless
SourceofMoreWealthfortheRich. . . . . . . . . . . . . . . . 57
2.3.4 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
vii
viii Contents
2.4 GeneralConclusion.. . . . . .. . . . .. . . . .. . . . .. . . . . .. . . . .. 60
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3 Neoliberalism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
3.1 WhyNeoliberalismWantstheWelfareStateModel
Dismantled. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
3.1.1 Neoliberalism:TheIdeologyThatHas
ProclaimedEgoism,SelfishnessandGreedtoBe
theBasicSocio-EconomicValues. . . . . . . . . . . . . . . . . . 65
3.1.2 TheRiseandDeclineoftheWelfareStateModel. . . . . . 66
3.1.3 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
3.2 TheNeoliberalWetDreamofDismantlingtheWelfare
StateModelMadeTrueinPractice. . . . . . . . . . . . . . . . . . . . . . 69
3.2.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
3.2.2 TheImplementationoftheNeoliberalAgendainSome
TerritoriesintheEightiesoftheTwentiethCentury. . . . . 70
3.2.3 ImplementingtheNeoliberalAgendainSomeTerritories
inPresentDays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
3.3 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
4 SomeMajorUnansweredChallengesofOurTimes. . . . . . . . . . . . . 79
4.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
4.2 TheUnsolvableDebtProblemRevisited. . . . . . . . . . . . . . . . . . 80
4.2.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
4.2.2 SomeDataontheAmountsofDebt. . . . . . . . . . . . . . . . 81
4.2.3 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
4.3 UnjustTaxation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
4.3.1 TheGeneralPurposesofTaxationandSemi-Taxation
BrieflyReaddressed. . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
4.3.2 NeoliberalFiscalPolicy:TaxingtheLower
andMiddleClassesWhileLeavingTheRich
(Relatively)Unburdened. . . . . . . . . . . . . . . . . . . . . . . . 98
4.3.3 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
4.4 CapitalismandtheEnvironment. . . . . . . . . . . . . . . . . . . . . . . . 102
4.4.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
4.4.2 HowthePrevailingCapitalistMonetarySystem
EntailsEconomicGrowth. . . . . . . . . . . . . . . . . . . . . . . . 103
4.4.3 HowtheEconomicModelofEverMoreEconomic
GrowthWasBoundtoResultinEnvironmental
Problems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
4.4.4 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
4.5 TheIncreasingGapBetweenRichandPoor. . . . . . . . . . . . . . . . 107
4.5.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
4.5.2 SomeDisturbingData. . . . . . . . . . . . . . . . . . . . . . . . . . 110
Contents ix
4.6 SomeFurtherTroublesomeConsequencesofDismantling
theWelfareStateModelintheUKandtheUSA. . . . . . . . . . . . 124
4.6.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
4.6.2 SomeDataonPovertyandWealthInequality
intheUK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
4.6.3 SomeDataonPovertyandWealthInequality
intheUSA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
4.6.4 TheIncreasingNeedforFoodBanksinBoth
theUKandintheUSA. . . . . . . . . . . . . . . . . . . . . . . . . 130
4.7 GeneralConclusion.. . . . . .. . . . .. . . . .. . . . .. . . . . .. . . . .. 132
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
5 SomeThoughtsonaMonetaryWayOut. . . . . . . . . . . . . . . . . . . . . 137
5.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
5.2 TheRationalforaNew,InternationalMonetaryOrder. . . . . . . . 138
5.2.1 OntheInvalidityoftheArgumentThatThere
IsNoAlternativeforthePrevailingMonetary
System(s)Perceivable. . . . . . . . . . . . . . . . . . . . . . . . . . 138
5.2.2 BasicOutlineforofanAlternativeMonetarySystem. . . . 139
5.3 InternationalCharacteroftheHereProposedNewMonetary
Order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
5.4 TheUnderlyingValuesoftheHereProposedNew,
InternationalMonetaryOrder. . . . . . . . . . . . . . . . . . . . . . . . . . . 142
5.4.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
5.4.2 PossibleOutlineforCreatingaMoreJust
Socio-EconomicSystem. . . . . . . . . . . . . . . . . . . . . . . . . 143
5.4.3 EscapingtheDictatesoftheDoctrine
of(Neo)liberalism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
5.4.4 TakingintoAccounttheTrueNatureofMoney. . . . . . . . 145
5.5 InstitutionalAspectsoftheNew,InternationalMonetary
Order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
5.5.1 ATwoTieredInstitutionalFramework. . . . . . . . . . . . . . 147
5.5.2 GovernanceAspects. . . . . . . . . . . . . . . .. . . . . . . . . . . . 148
5.6 TowardsaNewFivePillaredSystemofMoneyCreation. . . . . . 150
5.6.1 GeneralScopeofSection5.6:
A“FivePillar”-Approach. . . . . . . . . . . . . . . . . . . . . . . . 150
5.6.2 TheFivePillarsExplainedinMoreDetail. . . . . . . . . . . . 150
5.7 ConcludingRemarksRegardingtheProposed
NewMonetarySystem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
6 IntroducingaUniversal“CareState”Model. . . . . . . . . . . . . . . . . . 181
6.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
6.2 TowardsaNew“CareStateModel”. . . . . . . . . . . . . . . . . . . . . . 186
6.2.1 HowtheNewMonetaryOrderProposedinChapter5
ofThisBookCouldContributetoShapeaUniversal
CareStateModel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
x Contents
6.2.2 ContentoftheHereProposedNewUniversalCare
StateModel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
6.2.3 SomeFurtherThoughtsonOrganizingtheCare
StateModel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
6.3 TheCallforaNewFiscality. . . . . . . . . . . . . . . . . . . . . . . . . . . 202
6.3.1 TowardsaSimplifiedModelofGovernment
Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
6.3.2 TheBaselinesforaMoreJustFiscalSystem. . . . . . . . . . 203
6.3.3 AllocationoftheCollectedTaxes. . . . . . . . . . . . . . . . . . 214
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
7 ANewFocusonMan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
7.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
7.1.1 TheSadFateofManWithintheNeoliberal
WorldOrder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
7.1.2 HowtheProposalsMadeinthePreviousChapters
CouldHelpImprovingMan’sLivingSituation. . . . . . . . 221
7.2 TheNeedforaNewVisiononLabour. . . . . . . . . . . . . . . . . . . . 225
7.2.1 Problem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
7.2.2 TowardsaCareerPathTakingintoAccountMan’s
PhasesofLife. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
7.3 BelongingtoSocietiesofCareforOneAnother
andfortheEarthManInhabits. . . .. . . . .. . . . .. . . . .. . . . . .. 230
7.3.1 TheoreticalReflections. . . . . . . . . . . . . . . . . . . . . . . . . . 230
7.3.2 InPractice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
8 GeneralConclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239