ABSTRACT
The word “state” is a generic term used to describe all of the different organizations that serve as more or less permanent arbiters of social disputes and that organize the use of violence. States are overriding agents of social control, ultimate arbiters of social justice. Contemporary (neoclassical) economics lacks a theory of how circulation processes and states evolve. This is because the market is taken as the only real circulation process and the market is simply assumed to exist. It is viewed as a self-generated phenomenon, a product of Immaculate Conception and virgin birth. As a minimum contribution to the economy, the state provides or fails to provide a stable, unified social arena large enough for division of labor and specialized technology to become effective in the production of goods and services. The state also provides or fails to provide processes through which goods and services can circulate between groups of people.
