State Expenditures

Image: Anselmo Pessoa


The barbarism of Constitutional Amendment 95/16

State expenditures are increasing in all capitalist economies throughout history, this statistical truism was initially described by the German economist Adolph Wagner, starting to be called, even if imprecisely, Wagner's law[I]. The complexity of the capitalist reproduction system partially explains the increasing expenses, because one of the main headings of state expenses refers to economic and social infrastructure and the maintenance of institutions destined to the management of the State itself.

In this brief article we seek to theoretically detail state expenditures from a Marxist perspective, structuring its composition in a generic way, which will enable us to establish a first evolutionary approximation of state expenditures and the defense of the inevitable thesis of the impossibility of maintaining, in terms of capitalist relations , the rigidity of the Constitutional Amendment of Spending Ceiling (EC 95/16).

O'Connor (1977) divides state expenditure into two types: social capital and social expenditure. Social capital is the state expenditure necessary for “profitable private accumulation”, under this heading we have expenditure on “physical capital”, that is, infrastructure strict sense (roads, airports, railways, ports, electrical installations, water and sanitation, sports stadiums, etc.) example.

The resources spent by the State on these items provide “goods or services that private capital requires on a permanent basis”, guaranteeing the maximization of private profits by guaranteeing the regular flow of these resources at stable and minimum prices. This makes state expenditures fundamental for private capital, allowing the most efficient use of its capital, something that neoclassical theory calls “guaranteeing externalities”.

It is also worth noting that state workers produce part of the economy's real wage components, for example, social services, or elements of constant capital, such as research and scientific development. In this way, the increase in productivity of the state sector benefits the capitalist sector, either by lowering wage costs or by reducing constant capital costs.[ii], making it possible to increase the profitability of private capital.

To the extent that mercantile relations become generalized, a part, an important fraction of activities that demand a portion of state revenue, starts to be carried out by capitalist production units, but a sector that cannot be capitalized is always maintained and, on the other hand, new sectors of low profitability, high risks or unproductive continue to be assumed by the State. It should also be noted that the permanent crises in the capitalist system force a growing presence of the State in the management of certain sectors of the economy, clearing obstacles to capital accumulation or acting in the partial stability of the system.

The expenses necessary for social control processes are also on the rise, in particular with regard to the maintenance of coercive forces and police security. Engels (2002, p. 203-04) established this item as a striking feature of the State in general, resulting from the division of society into classes, according to him that “public force exists in every State; it is made up not only of armed men, but also of material accessories, prisons and coercive institutions of all kinds”. We can remember here that in the USA alone there are “more than 17.000 police agencies, served by a contingent of human resources superior to 900 thousand individuals, and in the last 20 years, expenses with public security have quadrupled”[iii].

War expenses and the maintenance of more structured and active military forces over longer periods of time are another factor responsible for the growing fiscal effort and the State's indebtedness. The so-called “military-industrial” complex is one of the central items of budgetary pressure in the main modern capitalist states, its main form of financing being the state debt.

On the other hand, expenses linked to the process of social legitimacy also increase, which, as we have seen, is based on the salary relationship and requires renewed adaptation processes, such as changes in salary systems, social security and public health policies, causing the maintenance of institutions necessary to support these processes. Included in these “social expenditures” are those resources intended for what Marx (2012), in the book Criticism of the Gotha Program, called “meeting collective needs”, such as schools, health institutions, etc.

One should also consider the workers' organizational and struggle capacity, an important factor in the configuration of the general budgetary structure of government expenditures, and two elements of these expenditures that are directly influenced by the class struggle can be highlighted: (i) resources destined to the satisfaction of collective needs, such as schools, sanitary and public health institutions, etc.; and (ii) maintenance funds for people unable to work, such as social security and social security.

State expenditures intended to benefit the share capital

State intervention in important sectors, including profitable ones, is linked in general terms to the social conditions necessary for the reproduction of capital. the term Clinic refers to carrying out indispensable activities for the bourgeoisie as a whole, for example: research, supply of stable energy inputs, communications and road infrastructure. Social capital is defined as the “movement of the sum of individual capitals and, therefore, of the total capital of the capitalist class”. Included in this totality are the capitals of corporations, something that has become predominant in contemporary capitalism, and the capitals of the State, “to the extent that governments employ productive wage labor in mines, railroads, etc. and thus function as industrial capitalists. [iv].

These state expenditures are intended to supply the physical infrastructure necessary for the development of economic activities and also for social reproduction, being part of the economic infrastructure necessary for accumulation, such as road transport systems, the energy and electrification system, and the sanitary and health structure. Water supply. The social infrastructure necessary both for the development of capitalist reproduction conditions and for the supply of collective social needs in general have characteristics of public goods, that is, use values ​​that are unable to be commercialized conventionally due to their characteristics of collective usesuch as parks, highways and sanitation facilities.

In this sense, it should be considered that almost all state expenditure items include elements of the “social consumption fund”, whether roads, airports, schools, hospitals, public assistance buildings, urban structure, etc. This fund is formally similar to fixed capital, because its wear and tear occurs gradually and works as a “consumption instrument” (HARVEY, 1990), in the case, for example, of the provision of services such as water and electricity, that require large initial investments, high production costs and very low “return rates”, which makes capitalist exploitation impossible, at least temporarily, being assumed by the State and financed in the medium and long term mainly through public debt[v].

State expenditures destined to legitimize the system and social control

The capitalist configuration based on share capital and in the large oligopolistic conglomerates it presents an economic cohesion that materializes in a strong unity in political intervention. The “cartelization unifies economic power and thus directly increases its political effectiveness”, which would culminate in the superior capacity of the capitalist State to partially confront the crisis conditions of the dynamics of accumulation, but also to accommodate interests of other class fractions.[vi].

Accommodation of interests does not mean, in any way, an alleged autonomous condition of the State in relation to social classes, but rather a consequence of specific changes in the structural relations that make up the system, on which the State acts as a regulatory force. In this way, it can be recalled that the changes surrounding the regulation of the wage relationship in the post-war period, in the main capitalist economies, were much more the result of pressure from workers' movements and the peculiar situation of the 40s and 50s than exactly of the major or minor interventions of the Keynesian State.

There is nothing to suggest that the specific changes that occurred have altered the structure of the exploitation of the workforce, nor that they are not reversible in a crisis situation, which partially started to occur from the 80s onwards, following the growing flows of of global circulation of loan capital, in the form of a “new financial power”.

We consider that the State is not an imposed power; it is rather a product of the very contradictions and social antagonisms, however, so that “these classes with conflicting economic interests do not devour each other and do not consume society in a sterile struggle, a power placed apparently above society is necessary”[vii]. The idea of ​​appearance above class interests is a fundamental aspect of the stability of class relations and the role played by the State.

Institutions recognized as social welfare are necessary for class power. The diversity of social commitments that the State assumes would be a function of two aspects: i) the reproduction of class domination in the long term, even if in certain periods it is necessary to impose material sacrifices on sectors of the dominant classes; ii) the class struggle imposes itself as a specific force; the social functions of the State depending directly on the intensity of popular mobilization. The changes that are institutionally imposed, even those whose achievement was brought about by pressure from the popular sectors, become part of the capitalist dynamics, as long as they are assimilable in the cycle of accumulation and not contradictory with the conditions of equalization of the rate of profit and competition between the capitals[viii].

This process of gaining bodies and souls takes place through a wide network of ideological control and production institutions, from schools to the various media. These factors are based on a basis of social legitimacy based on the salary relationship. The State, as an important component of the process of legitimizing capitalist production relations, must obligatorily follow the same guidelines as the entire system: the adoption of a salary relationship between its subordinate staff, even if, as we saw above, these workers are income consumers and not surplus-value producers.

Hegemony is not the result of a mere superstructural derivative of economic and social dominance, but rather the result of permanent actions by a varied set of agents who are destined to create or reinforce the legitimizing base of society. Thus, the consent of society as a whole to the dominant interests takes place through ideological hegemony, but through agencies that legitimize social relations and coercive apparatuses of the State. Gramsci states that “the State is the complex of practical and theoretical activities by which the ruling class not only justifies and maintains domination but seeks to win the active consent of those over whom it governs”[ix], therefore the mechanisms of coercion, control and persuasion are interconnected forms in the capitalist State.

On the other hand, the State constitutes a force of repression of a ruling class over the others. Nowadays we can use a double expression that denotes a similar content, but more relative: control and legitimation. The first term, control, more clearly reflects the notion of repression as a police or military coercive imposition; the second term, legitimation, reflects Gramsci's notion of hegemony, as seen above. Carnoy (1986) observes that even the “legal system is an instrument of repression and control, insofar as it has established the rules of behavior and reinforces them to adjust to bourgeois values ​​and norms”.

Contemporary capitalist society needs a growing improvement of these internal repression forces, whether due to the system's structural inability to include growing portions of the population in the labor market, reinforcing marginality and more or less excused forms of survival; either by repression of the organized forces of workers, like in the central country of capitalism (USA) 3% of its adult population (there are 2,3 million people in federal and state prisons and jails, the vast majority black men and women) or it is in the jail or in rehab[X]

War and military state spending

One of the most striking characteristics of central capitalism in this century will be the growth of the war industry, whose power has developed, in the case of the USA, for example, an authentic militaristic state, this is because the main demander of this industry is the State, whose opposition is the growing endowment of resources necessary for its financing. Of a programmed budget of approximately 3,6 trillion dollars in 2018, about 17% was allocated to national defense, with the historical average in the post-war period being around 20%.[xi]

It should be noted that the maintenance of the bellicose/military system is made possible within the dynamics of accumulation, with a permanent flow of expanding values, capable of financing the State's growing expenditures on war machinery. The war industry conducts its production with the State as the main demander, whose capacity to absorb this productive supply is linked to the total revenue available in each period, a function of tax revenue and the supply of loan capital that results in state indebtedness. According to Hobsbawm (1995) 7% of the titanic American GDP was allocated to war expenses in the mid-80s. The great entanglement of the capitalist economy with its military sector converges to a specifically important aspect for the issue of public debt. In this way, it is understandable that, in view of the fiscal restriction, the expansion of the public debt is the means of guaranteeing the growing financing of these expenditures. eccentrics of the capitalist state.

Considering the logic of the exposed state expenditures, one wonders what degree of economic rationality exists in the Constitutional Amendment 95/16, the amendment to the expenditure ceiling. Let's quickly see some data extracted from world statistics. The share of government expenditure in the German GDP goes from 10% in 1880 to 47% in 1985 and in the average of 2000-2010 it is 44%. In the US case, state spending evolved from 8% at the end of the 37th century to 1985% in 35 and stabilized at an average of 2010% in the decade ending in 2000. These figures are close to the vast majority of OECD countries, with in France the average in the period 2010-51 reached 42,1% and in the United Kingdom XNUMX%.[xii]

The set of state expenditures are components of an internal logic of capitalist accumulation, part of it. The imposition of legislation that goes against the very dynamics of the system can lead to two non-trivial consequences. Firstly, a break with the state's own capacity for intervention, which, as we have seen, conditions part of the capitalist dynamics, which will inevitably block capital accumulation and give rise to a deep structural crisis, leading to growing disorganization of the economy; the second resulting consequence will be the destruction of the social fabric itself, including reaching aspects of hegemony and control, embarking on a dispute centered on the use of violence and the repressive military apparatus, but without any perspective of equating or favorable solution to an arrangement that organizes society, in other words, barbarism is instituted. Thus, even for the Faustian lords of Capital the grotesque EC95/16 is a sword placed over their bestial necks.

*Jose Raimundo Trinidad He is a professor at the Graduate Program in Economics at UFPA.



CARNOY, M. State and political theory. Campinas, SP: Papirus, 1986.

DUMÉNIL, G. & LÉVY, D. Overcoming the crisis, threats of crisis and new capitalism. In: CHESNAIS, F. et al. A new phase of capitalism? São Paulo: Shaman, 2003.

ENGELS, F. The Origin of the Family, Private Property and the State. São Paulo: Centauros Editora, 2002.

GOUGH, Ian. (1975). “State expenditure and capital.” New LeftReview 92:53–92.

HILFERDIG, Rudolf. Financial capital. So Paulo: Nova Cultural, 1985.

MARX, Carl. Criticism of the Gotha Program. São Paulo: Boitempo, 2012.

MARX, Karl. Capital: critique of political economy, Book II: The process of capital circulation [1885]. São Paulo: Boitempo, 2014.

O'CONNOR, J. USA: The Crisis of the Capitalist State. Rio de Janeiro, Peace and Land, 1977.

PIKETTY, T. Capital in the 2014st Century. Rio de Janeiro: Intrinsic, XNUMX.

POULANTZAS, N. The State, power, socialism. Rio de Janeiro: Edições Graal, 1985.

TAYLOR, Philip E. (1960) Economics of the public hacienda. Madrid: Aguilar.


[I]The following statement is taken from Taylor (1960, p. 11): “The broad comparisons between different countries and at different times show that among the progressive peoples (…), there is regularly an increase in activity, both in the central government as de los locales (…)”.

[ii] GOUGH, 1975.

[iii] Check:

[iv] Marx ([1885], 2014).

[v] It should be noted that “public assets” can be privatized and become part of social capital, which is quite normal in the history of capitalism. In the current phase of “globalization” of capital, the privatization of real “assets”, mainly companies linked to the supply of social infrastructure, such as electricity and telecommunications, was a tonic in the resumption of the cycle of expansion of accumulation, in this sense it is quite interesting the analysis by Duménil & Lévy (2003).

[vi]Hilferding (1985).

[vii]English (2002)

[viii]Poulantzas (1985).

[ix] Taken from Carnoy (1986).

[X] Check:

[xi] Check:

[xii] Check Piketty, 2014.

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