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Deflections of power 59 The state imperative Beyond their many disagreements, all Marxists seem to accept that capitalism requires a state for four main reasons. First, the state helps prevent the inherently conflictual nature of capitalist production from becoming overtly politicized. The capitalist class, argues Gerald Cohen (1978), has ‘power’ over every worker, but the ‘right’ over none. It has the systemic ability to act in its own interest, but it lacks the normative, moral and legal sanction that makes such action acceptable. This sanction is provided by the state. Second, the state can help counteract the anarchic, crisis-prone nature of capitalism.

Whether the tendency for crisis comes from production or realization, history suggests that the state is able, within limits, to mitigate it (Miller 1987). Third, the state serves to absorb, temporarily or permanently, the bloating social cost of accumulation (O’Connor 1973). Fourth and finally, at the global level, the state system mediates the conflicting and mutual interests of capitalists as well as their relation with non-capitalist entities, although the precise nature of this mediation as well as its logical necessity remain heatedly debated (Mann et al. 2001–2; Callinicos 2007).

Marxist state theorists further agree that the state needs to be sufficiently separate from capital. This is the common point of departure. The debate is over the precise nature and extent of this separation, and here there seem to be two distinct views. The first, ‘flat’ approach is to treat capital and state as belonging to two interdependent yet distinct spheres – economics and politics – and to consider each sphere as having a separate and equally significant logic. The other, ‘hierarchical’ approach is to consider the logic of capital as primary, and then derive the state from the broader imperatives and contradictions of accumulation.

The flat approach The flat approach underlies the famous debate between Ralph Miliband and Nicos Poulantzas over the ‘autonomy of the state’.15 The two begin from seemingly different assumptions. Miliband considers the state as an instrument of the capitalist class, whereas Poulantzas sees it as rooted in the objective structure of capitalism. Yet both cast their argument in purely political terms. This exclusively political language can be traced back to Friedrich Pollock’s ‘end of economics’ – and, indeed, references to the autonomy of the state have been criticized as neo-Ricardian. The neo-Ricardians have rejected Marx’s labour theory of value along with his laws of motion. And since this rejection eliminates economic inevitability (at least in the immediate term), the state is left economically indeterminate (at least for the time being).16 15 See Miliband (1969; 1970; 1973) and Poulantzas (1969; 1973; 1975).

16 A neo-Ricardian critique of Marx’s analysis of production is given in Gough (1972), and its implications for the state are articulated in Gough (1975). For counterarguments, see Fine and Harris (1976b; 1976a) and Holloway and Picciotto (1978a).

60 Dilemmas of political economy For Miliband, economic indeterminacy means that the state can serve the immediately observed interests of the capitalists, whatever they may happen to be. For Poulantzas, the state lives a more complicated double life – economic in principle, political in practice. In theory, the state is certainly ‘determined’ by the economy. This determination, though, happens only in the Althusserian ‘last instance’ – an asymptotic concept that Poulantzas leaves conveniently opaque and safely out of sight. In the interim the key is politics, which means that in its day-to-day operations the state enjoys a ‘relative autonomy’ to act as it sees fit.

The result is acute schizophrenia. Given that any state action affects both the immediate and ‘last’ instances (and every instance in between), the state must constantly juggle its own short-term autonomy against the long-term structural interests of the economy. But, then, Poulantzas, whom taxonomists for some reason like to classify as a ‘structuralist’, is completely silent on the economics of the ‘last instance’. And since this silence leaves the structural imperatives of capitalism undefined, it is rather unclear what exactly it is that the state tries to achieve. For his part, Poulantzas informs us, with emphasis in the original, that ‘the State is precisely the factor of cohesion of a social formation and the factor of reproduction of the conditions of production of a system that itself determines the domination of one class over the others...’ (1969: 73), and it is obviously to our own demerit if we don’t quite understand what this sentence is supposed to mean.

The hierarchical approach The alternative, vertical approach is different in that it considers capital and state as conceptually unequal. The engine of capitalist history is the economic accumulation of capital. The capitalist state is merely part of that process.

Writers who follow this approach are often labelled ‘fundamentalists’. They emphasize the deep logic and inherent contradictions of capitalist production as articulated by classical Marxism – this in opposition to the neo-Ricardians who, they argue, deal with the secondary, surface phenomena of ‘circulation’, market structure and monopoly capital.17 The contradictory logic of accumulation gives the state its concrete history.

Thus, according to Perry Anderson (1974), the capitalist state was never functionally autonomous. In Europe, he argues, state formation was deeply intertwined with the underlying transformation of the mode of production.

The feudal and absolutist states prepared the conditions for capitalist accumulation and, eventually, also for the political rule of the bourgeoisie. Seen from a functionalist viewpoint, the state doesn’t have – and never had – an 17 It should be noted that, in practice, the differences between the two analyses of the state are not that clear cut. Fundamentalists customarily rely on ‘surface phenomena’, while circulationists often make references to ‘inevitable contradictions’ (see also footnote 9).

Deflections of power 61 independent role. It merely shapes the requirements of the ruling class, a class that is, in itself, is a creature of the contemporary mode of production.

At a later stage, economic restructuring, driven either by the centralization of capital or the intensification of competition, further transforms the capitalist state. Gabriel Kolko (1963), for example, maintains that the growth and strengthening of the American state were largely a consequence of a political alliance of big business. The large industrial owners, he says, did not enjoy greater monopoly power. On the contrary, they suffered from mounting competition. They solved the problem with government regulation, for which they needed a big state – hence the emergence of ‘political capitalism’.

Whatever the reason, the assent of the state is unavoidable. In the hyped language of Ernest Mandel, Capitalist private property, the private appropriation of surplus-value and private accumulation increasingly become an obstacle to the further development of the forces of production. State (and supra-national) centralization of part of the social surplus product has once again – as in numerous pre-capitalist societies – increasingly become a material precondition for the further development of the forces of production.... The strengthening of the State in late capitalism is thus an expression of capital’s attempt to overcome its increasingly explosive inner contradictions, and at the same time an expression of the necessary failure of this attempt.

(Mandel 1975: 580–81, original emphases) And now in simple words: capitalism is born an economic–industrial creature, generating surplus value that accumulates in the form of means of production (counted in undefined units of abstract labour). This process continues for a while, but sooner or later something goes wrong. There is a decline or intensification of competition, an increase in the organic composition of capital, or some other inevitable development that causes normal accumulation to turn into over-accumulation (or normal production to become over-production or under-consumption – all fuzzy distinctions which the theorist commonly pays lips service to and quickly glosses over). As a consequence of this mishap, capitalism takes a quantum leap and becomes ‘political’ (which means that previously it was a-political). The capitalists turn the ‘night-watchman’ state into a ‘regulating’ state (a transition that both proves and refutes the ability of the system to survive), and the writer puts the full stop after the QED.

Political Marxism In a certain important sense, the analysis of the capitalist state has become a fetter on Marxist theory. The problem is that the state – whether equal to capital, subordinate to capital, or derived jointly with capital from a broader 62 Dilemmas of political economy materialist history as argued by the German ‘state derivation debate’ – always ends up fracturing the overall picture.18 Because the state is assumed to be inherently and necessarily separate from accumulation, we end up with two distinct appearances: one of economics and the other of politics.

Some ‘political Marxists’ have attempted to transcend the problem by redefining the politics/economics duality in continuous rather than binary terms. According to Ellen Meiksins Wood (1981), capital is the ‘privatization of politics’ insofar as it gives private owners the authority to organize production. Meiksins Wood accepts the existence of the ‘economy’, complete with Marx’s laws of capitalist development, etc. The novelty is that the boundaries

of her economy are not rigid, but supple:

‘Political Marxism’, then, does not present the relation between base and superstructure as an opposition, a ‘regional’ separation between a basic ‘objective’ economic structure, on the one hand, and social, juridical, and political forms, on the other, but rather as a continuous structure of social relations and forms with varying degrees of distance from the immediate processes of production and appropriation, beginning with those relations and forms that constitute the system of production itself.

(1981: 78, original emphases) Although this formulation sounds tempting, it really does little to square the circle. First, there is a confusion of terms. Meiksins Wood is right to argue that capital is the privatization of politics. But the private/public distinction is not the same as the distinction between economics and politics. And since capital is not an ‘economic’ entity, the fact that it privatizes power tells us nothing about the relationship between the ‘economic’ and the ‘political’.

This confusion becomes evident when we consider Meiksins Wood’s definition of the economy: she doesn’t have one. Meiksins Wood never tells us what she means by the ‘immediate processes of production and appropriation’, what constitutes the ‘system of production itself’, or how we can measure the ‘degree of distance’ from these yardsticks.

Perhaps these concepts had a clear enough meaning during the transition from the fields and meadows of pre-capitalist Europe to the factories of early industrialization. But as we shall see later in the book, this clarity has been lost since then, leaving us with a set of empty formulations. What exactly are the ‘immediate’ processes of production and appropriation of a modern pharmaceutical drug, of a jet fighter, of an automobile, of a complex software 18 The German ‘derivationists’ reject the orthodox ‘fundamentalist’ notion according to which the economic is somehow prior to the political, and instead seek to treat both as part of the same materialistic development. This rejection, though, seems largely semantic, since the deriviationists do not offer any meaningful rethinking of Marx’s original category of capital. For a recent statement of the derivation approach, see Altvater and Hoffman (1990).

Deflections of power 63 system, of an insurance system, or of health care? Where do these complex processes start and where do they end? Can the ‘immediate’ processes of production and consumption be delineated, even roughly, from those that are ‘less immediate’? If this delineation is impossible to make, what constitutes the system of production ‘itself’? And if the ‘system of production’ remains unspecified, what does it mean to say that the economy and politics are ‘distinct’, whether the distinction is rigid or supple?

The capitalist totality As Marx himself put it, if there were nothing behind the ‘thing’, there would be no need for science. If we accept that the politics–economics fracture is merely the ‘appearance’ of capitalism, we need to see what lies behind this fracture. Physicists tell us that behind the separate appearance of colours lies the unifying logic of the wave length. Likewise, Marx tells us that behind the distinct appearances of economics and politics, of production and state, of exploitation and oppression, lies a single capitalist totality.

And yet, Marxists do not have a theory to explain this totality. They have an explanation for why the world seems bifurcated between factory and state, and for why this separation is cunning, misleading and alienating. But they offer no unified science to transcend the bifurcation, no alternative totality to stand against capitalism.

The flat, ‘autonomous’ explanations give up the possibility for such a unified science altogether by accepting from the start that politics and economics obey two semi-independent logics. By contrast, the hierarchical, ‘structuralist’ explanations do try to devise a single theory in which the state is derived from the material basis of accumulation. Yet they, too, cannot go very far: their conception of capital adheres to Marx’s notion of abstract labour value, and this loyalty keeps them entangled in the same logical and historical impossibilities that have haunted Marxism for more than a century.

The result is a dead end. Since labour values cannot be observed and calculated, it follows that structuralist theories – no matter how sophisticated – cannot know anything about the actual accumulation of labour values. And given that the value reality of accumulation remains unknown, structuralists have no concrete basis from which to ‘derive’ the state.

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