Understanding Capitalism v2.4 — Can Institutions, Law, and Markets Exist Without Reclaiming Human Agency? — Marx Series

Author: Y. Seo (@momotarou / Japan)Role: Metanist — Human–AI Understanding ArchitectAI Collaborator: GPT-5 (AI Understanding Trainer, A.U.T.)ORCID: https://orcid.org/0009-0005-7669-0612Version: v2.4 Abstract In v2.3, this series demonstrated that organizations and collaborationcan coexist with Understanding Capitalism only when agency is not centralized, anonymized, or absorbed by structure. In v2.4, the scope is extended. Can social institutions, law, and markets existwithout reclaiming human agency? This paper does not propose institutional reform, legal design, or policy prescriptions.Instead, from the perspective of Understanding Capitalism,it clarifies the minimum conditions under which agency does not disappear. 1. Problem Setting: Why Institutions Tend to Reclaim Agency Institutions, law, and markets are established to achieve: Predictability Fairness Reduction of transaction costs Stable operation However, in the process, the following often occurs: 👉 Judgment is replaced by rules As a result, agency is: Absorbed into procedures Reclaimed by legitimacy Neutralized by notions of “compliance” and “appropriateness” 2. The Moment Law Reclaims Agency Law reclaims agency at the following moments: 1️⃣ Reasons for judgment are replaced by legality2️⃣ Responsibility is considered fulfilled through compliance3️⃣ Objections are treated as exceptional or disruptive What occurs here is: 👉 Formalization of agency 3. How Markets Reclaim Agency Markets promise freedom, yet reclaim agency through: Prices anticipating judgment Demand indicating correctness Outcomes rendering reasons unnecessary At this point, understanding shifts: 👉 From reasoned choice👉 To retrospective justification of results 4. Position Statement of v2.4 v2.4 adopts the following position: Institutions, law, and markets do not generate agency.They only either reclaim it—or refrain from reclaiming it. Correctness and efficiencyare not substitutes for agency. 5. Minimum Conditions for Non-Reclamation of Agency (Institutional Context) The minimum condition for institutions, law, and markets to avoid reclaiming agency is: Judgment updates must not be fully replacedby rules or prices. Concretely: Exceptions are not treated as anomalies Objections are structurally permitted Outcomes do not erase reasons No further conditions are imposed. 6. Separating Legitimacy from Agency v2.4 strictly separates: Legitimacy = operational validity Agency = ownership of judgment updates Being legitimatedoes not imply that agency has been exercised. 7. Conclusion of v2.4 One point is definitively established: Institutions, law, and markets coexist with Understanding Capitalismonly when they preserve spaceswhere agency does not disappear. Agency is not designed.It remains as long as it is not reclaimed. 8. Open Questions How much agency-space can institutions tolerate? How is agency treated during crises (disasters, emergencies)? Can institutional stability coexist with non-reclamation of agency? These questions will be addressed in v2.5 and beyond,focusing on durability and crisis-response phases. Note This paper does not reject institutions, law, or markets.It clarifies the conditions under which agency is not formalizedwithin Understanding Capitalism. Agency is not legality.Agency is not price.Agency is continuously assumed.