Category: Democratice governance

National Socialism versus Social Democracy versus National Capitalism

Sheri Berman’s The Primacy of Politics: Social Democracy and the Making of Europe’s Twentieth Century (Cambridge UP, 2006) has been sitting on my shelf a long time, but I only just got around to reading it, partly in response to John Quiggin’s recent declaration that he has given up on the term “social democracy.” My discussion of that decision is here and here.

One virtue of Berman’s book is that it shows how both Mussolini and Hitler were socialists—that is, both the fascists and the Nazis established strict governmental control over the economy (“the primacy of politics” over economics in Berman’s phrase). In particular, the fascists and the Nazis developed full employment programs that used public works as a last resort for the unemployed, created or enhanced social welfare and insurance programs, and established firm state control over capital flows and investment. The enthusiasm for Mussolini, in particular, that many (not just clowns like Ezra Pound) expressed in the late 1920s and early 1930s becomes much more understandable when reading Berman’s account of his regime’s fairly successful attack on the poverty and inequality capitalism wrought in post-World War I Italy. Of course, the fascists and the Nazis did not dismantle capitalism entirely; in particular, they did not threaten private ownership. But they did sharply curtail the autonomy of property; the Faustian bargain made by the capitalists was that they would accept a lesser level of profit and massive government interference in what and how they produced things in return for “order” and for a guarantee that property would not be confiscated or nationalized. But, especially, by the standards of our own dark times, Mussolini’s and even Hitler’s economic policies look “progressive.” For starters, their policies were Keynesian, depending on large public expenditure to provide employment and to jump start a depression economy back to something like prosperity.

Of course, much of that Keynesian spending was on the means for war. Both regimes can look like giant potlatches—building up vast stores of military hardware in order to destroy them all in an orgy of destruction. And the regimes had the same attitude toward citizens as they did toward tanks: they are expendable; plenty more where they came from.

The point, naturally, is not to praise Mussolini or Hitler. The Nazis, in particular, dismantled liberal democracy in incredibly short order. All other parties were outlawed by six months after Hitler’s becoming Chancellor. And the left-wing economics were yoked to right-wing nationalism, to the mythos of the fatherland and of “blood.” Violence was baked in from the start, as Walter Benjamin told the world in 1936. The only possible end game was war—and that was explicit, a feature not a bug.

But Berman’s work led me to a rather different dark thought. What does it mean to say that the only successful assaults on capitalism in the 20^th century were accompanied by the destruction of democracy? We might be able to dismiss Lenin and Stalin’s madness quickly by saying that the economics were impossible even apart from political crimes. But what happens if we say that Mussolini’s Italy came pretty close to achieving an economic realm that most social democrats can recognize as their aspiration? In short: can we get to social democratic heaven if we hold resolutely to the democratic part? Does democracy—the rule of law, elections, legislative bodies, civil liberties along with property rights—afford capitalists too many tools for withstanding any and all attempts to gain political control over capitalist practices? The impatience with liberal democracy everywhere evident in the 1930s reflected the inability of democracies to act quickly and decisively. The post-2008 actions of the EU, especially, with its ongoing (even now, ten years later) constant kicking of the can down the road, appear to confirm the claim that democracies find it hard to act. (The exception, always noted, is the US response to World War II; slow to get going, the historians say, but what a behemoth once roused; but it took a war for the US to end its depression, with precisely the kinds of Keynesian spending and government intervention into the economy that even the New Deal could never install.)

So here’s the horrible thought: only a non-democratic regime, one that steps on the “rights” of property owners and the many ways that the rich can control elections and elected officials, will be able to break the stranglehold that capitalism has on modern political communities. Capitalism both strives to escape political (democratic) accountability wherever possible—and uses all the intricacies of democratic procedures to its advantage in holding off change. Well-intentioned liberals and leftists, who play by the rules, are played by the business barons. We are getting a demonstration of that dynamic now. We had the corruption free, good governance folks who were the Obama administration; the absolute epitome of high-minded liberals. And now we are seeing the kinds of ethics that prevail among the pocket-lining hacks of the right, who could care less if the agencies they preside over actually function.

It has become clear—if it wasn’t in the past—that the Milton Friedman insistence that capitalism and democracy went hand-in-hand is simply wrong. Capitalism hates democracy, as the US support of right-wing dictators throughout the world should have made clear. But the more worrying thought is that democracy does not pose an existential threat to capitalism, just an annoyance, a low-grade fever, that capitalism has learned how to keep under control. Capitalism can tolerate low-grade democracy, just as it can tolerate gay marriage, antagonistic art works, and academic freedom, confident in its ability to not let such things get out of hand. True, the right is always hysterically claiming that chaos is nigh—if not already here. But such fulminations on Fox don’t register in the corporate boardrooms, not the ways that tax and regulation evasion strategies do.

In short: for social democracy to work, the left has to get the democracy part in order first. This is Berman’s “primacy of politics.” Without a very firm democratic mandate, establishing the economic policies of social democracy would seem a non-starter. But there are so many structural obstacles to establishing that mandate that stand in the way—even if the needed majority existed. (Thus, something like gun control offers an object lesson in all the ways majority opinion can be thwarted in the scheloric American political system.) With the democratic hill so high to climb, hope for the economic transformation wanes. We know what needs doing: higher taxes, public housing, fully funded public education and public transit, universal health coverage, etc. etc. But the ability of our political system to deliver any of these things is very doubtful.

And (again it is very odd to say this) the fascists and Nazis look good in comparison to the current political landscape. They mobilized nationalism to authorize the state’s taking control of the economy—and molded that economy in ways that, to a fairly large extent, benefited the majority. (Another horrible thought: you can only mobilize people by providing them with an enemy to fear and hate; the Carl Schmidt notion. So you couldn’t really form the democratic majority that would take control over capitalism unless you identified a “class enemy” or a “non-national” enemy. Someone has to be “not us” and a legitimate target of rage and mistreatment. You can only benefit the majority by persecuting the minority.)

But how do the fascists and Nazis look good? Because at least they were using the poison of nationalism and the powers of the state to rein in capitalism. Today’s right wing aims to serve capitalism, not control it. They mobilize the state to augment capitalism’s power. National capitalism instead of national socialism. Singapore, China, the UK, and the US. Different degrees of assaults of civil liberties; different degrees of direct state subsidies to corporations. But the same basic model based on the same nationalistic principle: the nation’s glory resides in its wealth, along with the fraudulent promise that the prosperity at the top will generate (trickle down) prosperity for those below them. Perversely, this vocabulary of national greatness is accompanied by a dismantling of all public services or any notion of public goods. Capitalism will provide all that is needed; market failures do not exist, just as externalities are not admitted. The state exists to smooth capitalism’s path—and to beat the nationalistic drum.

I understand that these dark musings are the voice of despair speaking. Our world has become so cruel, the hypocrisies of the right so all encompassing, and the use of democracy’s trappings to forestall any change in a leftist direction so pervasive, that fears such as those expressed here seem inevitable. It is simply not clear that our political system can deliver the changes needed. Its inability to do something as simple as ban assault weapons feeds that fear. There’s plenty of overt oppression—from mass incarceration to the unfreedoms experienced everyday at the workplace by most employees—just as there is plenty of overt corruption (all those politicians on the billionaire’s dole). But there is also the general grinding of the gears in the Circumlocution Office, which keeps enthralled, obsessed people like me (there are so many of us!) reading the newspaper every day to monitor the drip, drip, drip, as if something this time, against all our prior experience, is going to come of it. But nothing ever does come of it—and some days it seems that that perpetual inaction is precisely the point.

Occupy Anarchism

“A kind of anarchism of direct participation has become the reigning spirit of left-wing protest movements in America in the last half century. There is a lineage even longer. Decision-making by consensus is of Quaker inspiration, as if to say: Speak and listen, listen and speak, until the spirit of the whole emerges. In its recent incarnation, anarchism is not so much a theory of the absence of government but a mood and a theory and practice of self-organization, or direct democracy, as government. The idea is that you do not need institutions because the people, properly assembled, properly deliberating, even in one square block of lower Manhattan, can regulate themselves. Those with time and patience can frolic and practice direct democracy at the same time—at least until the first frost.” Todd Gitlin, Occupy Nation: The Roots, The Spirit, and the Promise of Occupy Wall Street (NY: HarperCollins, 2012; pp. 80-81.)

“There was a graver problem with leaderlessness than the fact that it made it awkward for outsiders to know who to speak with. By rejecting leadership continuity, the movement remaining in motion, mobile, able in principle to adapt to new circumstances. But it also rejected the formalities, even the informalities, of accountability. When it made mistakes, it didn’t know what to do about them. It was prone, in difficult hours—and all movements, like organizations and marriages, have difficult hours—to thrash around” (Gitlin, 103-104).

[I]n keeping with the movement’s anarchist, antiauthoritarian thrust, there was a strong sentiment that, as naturalist Garbiel Willow told a New York Times reporter, ‘Demands are disempowering since they require someone else to respond.’ Demands conferred legitimacy on the authorities. Demandlessness, in other words, was the movement’s culture, its identity” (Gitlin, 110).

“The movement’s great majority rightly understood nonviolence not as negation, the absence of destruction, but as a creative endeavor, a repertory for invention, an opening, an identity. . . .Certainly, the tactics can grow stale with repetition, but committed and creative practitioners can renew it. The Occupy movement has been, so far, a seedbed of creativity. Its future rests in no small part on whether it can continue to learn from experience, deepen its tradition and funnel it into new soil” (Gitlin, 127-29).

“Communities governing themselves in assemblies. . . . The radicalism of the core movement helped explain what baffled so many observers—the absence of formal demands and programs. As a guiding principle, what the radicals wanted was direct democracy. It would have been absurd to demand that the authorities create direct democracy. The authorities have everything at stake in resisting such a demand. If you were going to have direct democracy, you had to launch it yourself, directly. You had to infuse the spirit of do-it-yourself with world-changing zeal, and vice versa. Political-economic decisions were too consequential to be made by anyone but all the persons concerned—the stakeholders, to use the current lingo. The radical core wanted a world run not by exclusive committees but by assemblies of the people” (Gitlin, 133, 138).

“The Occupy movement wanted to win reforms and to stay out of politics. At the same time.

Movements are social organisms, living phenomena that breathe in and adapt to their environments, not objects frozen into their categories while taxonomists poke and prod them. The come, go, mutate, expand, contract, rest, split, stagnate, ally, cast off outworn tissue, decay, regenerate, go round in circles, are always accused of being co-opted and selling out, and are often declared dead. If they are large, they contain multitudes, and contradict themselves. Outsider movements struggle to finesse these tensions, to square circles, striving to hold into their outsider status while also producing results” (Gitlin, 141).

So, if economic life is to be made substantially fairer and more decent, and plutocratic power is to be reversed, an enduring movement is essential. Such a movement may not be sufficient—it isn’t humanly possible to know that—but surely it is necessary. Occupy’s thrust is popular, which is essential, but popularity itself does not change the world.

What does? In the longer run, both institutional change and changes of heart and mind. The movement needs structures that flex and learn, train leaders, generate actions, recruit supporters. It needs to be a full-service movement—one that invites participation at many levels. For overmortgaged and underwater home-owners, it needs campaigns to corral the banks that have them in lock. For the civilly disobedient young, it needs appealing direct actions. . . . Whoever oyu are, it needs to prmotoe activities tailored to you.

In the medium run, say five years, networks of activists—the inner movement—need to devise an infrastructure that sustains them, recruits them, focuses their intellectual and strategic life, generates sustained pressure on power, keeps movement tensions manageable, and not least, make significant progress toward driving money out of the political system” (Gitlin, 165-66).

“Historically, coalitions of outer-movement and inner-movement groups have accomplished what individual groups could not” (Gitlin, 208).

I don’t want to belabor this material. Gitlin wrote his book in the spring of 2012, when Occupy was still alive—if on life support. I will let his comments speak for themselves, with only three observations of my own.

It is striking the extent to which Occupy captured the imagination of the left. Its fragility—and its inability to make a dent on the plutocracy it was trying to disrupt—were obvious from the start. Yet the left is so starved for any kind of “movement” that it took up Occupy as a savior. Gitlin bends over backwards to be sympathetic, even as he repeatedly points out all of Occupy’s flaws. His sympathy is to be applauded, not sneered at. But this ember cannot be stoked into a fire. There just wasn’t enough there—and never was.
The point about inner and outer movements is well taken. Some serious pressure from the left on the Democratic Party is sorely needed. So the dilemma remains: when should the radical left stand firm, when should it fall into line behind the Democrats. Disdain for electoral politics is suicidal, as the triumph of Trump shows. But being continually blackmailed by the threat of “their being worse” is a formula for snail’s pace progress.
So the only answer is to organize, to build larger and stronger coalitions. Anarchism is no help in that case. Assemblies are fleeting if they are not constituted as institutions. The people governing themselves in assemblies is a useless, even frivolous, goal. It doesn’t pass the sniff test. It’s a happening, not a politics—and is of a piece with the gestural politics that is so delicious to the avant-garde.

Biopower/Biopolitics

Foucault introduces the notion of “biopower” as a supplement to his theory of “disciplinary power.” He argues, convincingly in my view, that what we might call the “welfare state” slowly emerges from about 1750 on. That state takes ensuring the welfare of its citizens, promoting and even providing the means toward sustaining life, as one of its primary missions—or even its fundamental reason to exist, the very basis of its legitimacy. The state that can protect, preserve, and even enhance the life of its citizens is a state worthy of their allegiance and obedience. It seems plausible to claim that the Roman empire did not value citizens’ lives in this way, or that medieval kingdoms did not place each citizen’s welfare as a central value the polity was pledged to honor.

Typical of Foucault is his desire to focus on the way that something which is often celebrated as “progress” in fact carries significant costs that a Whiggish history ignores. We can use the term “liberalism” to designate the traditional story (even though, as I have argued vehemently over the years, it makes no sense to accuse 20^th century liberals of buying this story; we must distinguish, at the very least, “classical” from “modern”—or 29^th century—liberalism). The liberal story has several parts: a) consent of the governed to the state’s power in return for protection, for the preservation of life; b) the rise of the individual, which is why every life is equally entitled to that protection; and c) the establishment of “rights” that aim to protect citizens from the potential abuses of power by the state itself. Liberty, in this understanding of the world liberalism establishes, is meaningless without security. Only someone who is confident that his life will continue will be able to act out the kinds of long-term plans and undertake the kinds of initiatives that make liberty a reality. This notion of the necessary preconditions of liberty gets expanded as the 19^th century moves into the 20^th to include what sometimes get called “social rights” (to contrast them to “political rights.”) Social rights are claims upon the polity to provide the “means” to life: namely, food, shelter, education, health care, clean air and water, the list can go on. Political rights, on the other hand, are direct protections against undue interference in a citizen’s behavior: freedom of speech, religion, assembly, along with legal rights against preventive detention, arbitrary imprisonment, and rights of participation, including the right to vote, to run for office, and to form/join political parties.

Foucault had, with his work on disciplinary power, made a compelling case that the advent of individualism, usually seen as a progressive step toward valuing all lives (if not equally, at least in ways that proclaimed that no life could be legitimately sacrificed), offered pathways to the intensification of power. Namely, each individual becomes a target for power’s intervention. (Strictly speaking, of course, we should say each body becomes a site for power’s intervention—and that power produces individuals out of bodies.) Liberal political orders exist hand-in-hand with an economic order (one Foucault resists calling capitalism) that is determined to make each person as productive as possible. A whole series of disciplinary techniques are applied at a multiplicity of sites through a society to insure that individuals are up to the mark, that they are, as the phrase goes, “productive members of society.” And all kinds of punishments are devised for those who prove deviant, where deviance comes in an astounding variety of forms. Disciplinary power “articulates” the social field with finer and finer gradations of acceptable behavior, with every citizen constantly being measured (through endless processes of examination) against the various norms.

Disciplinary power, then, works upon each individual. Compulsory education is one of its innovations; the highly organized factory is another, the creation and training of the mass citizen army another. In each case, every body in the ranks must be made to conform, to play its part.

Biopwer, by way of contrast, works on populations. The nation that takes “life” as its raison d’etre will focus attention on individual life, but it will also be concerned with the general preservation of the nation as well. That is, it will become interested in birth and death rates, working to raise life expectancy, to lessen infant mortality, to encourage pregnancy and attend to the health of pregnant women. The statistical (general) knowledge that can be generated about such things will suggest various large-scale interventions by state power. The most obvious one are in public health measures: laws (regulations) to protect air and water quality, but also the outlawing of “dangerous” drugs and the interdiction of suicide.

At some points, Foucault appears to be simply describing something that is so familiar to us, so taken for granted, that it is practically invisible. The state’s power increases when we, as citizens, grant it the right to enforce various public health measures. We could say, in a similar fashion, that state power increases if we make it one of the state’s responsibilities to provide public transport. The gathering of money and the granting of jobs involved in creating and running a public transport system must entail the state having more power. After all, power is not just power over (any employer has power over employees, and the state is no different in that regard) but also power to. The state would not have the power to (ability to) run a transportation system unless it had power. So the more duties we assign to the state, the more power it, necessarily, accumulates (unless it is totally ineffectual).

However, as many readers of Foucault have noted, his discussions of power quite often come with the distinct flavor of “critique,” in a dual sense: first, as a revelation of power’s presence where either ideology (semi-deliberate masking of the reality) or taken-for-grantedness hide that presence, and second, as a strongly implied normative criticism of power as illegitimate, evil, or pernicious. Some commentators have even started to wonder if Foucault has affinities with ne0liberals insofar as he associates state power with tyranny. I think that is going too far because Foucault (especially with disciplinary power) was very attuned to the ways in which power is exercised in non-state venues (like the factory) and certainly never thought of the economic sphere, of private enterprise, as a site of liberty unrestrained by power. But his temperamental anarchy does make his approach certain libertarian positions in troubling ways—since, in my view, the libertarian is absurdly naïve, being blind to power’s presence in ways that Foucault has taught us to mistrust. Power is everywhere—and always with us. (Hence other readers of Foucault have taken “power” to be the “god-term” in his work.) Instead of the anarchist dream of a world without power, my view is we have to think about ways to rein in power, to limits its abuse, and that means distributing power in ways that neither state or employers have enough power to leave their citizens or their employees without effective recourse against abuses. Foucault, however, never goes in that direction. After identifying the many sites where power is exercised, and implying that such exercises are not good things, he has nothing more to say about how we might or should respond to that situation.

Foucault has a particular reason for thinking biopower pernicious: his argument that it leads to racism. I will take up that argument tomorrow—since it is the direct claim that a “politics of life” leads to the infliction of large-scale death. For now, one last point: biopower is not biopolitics. There are lots of ways of understanding “politics,” but one fairly basic definition of the term would be “pertaining to the collective arrangement of ways of living together with others.” That is, we don’t have politics until more than one party is involved in the creation (through negotiation, or legislation, or other means) of the arrangements—and where the goal is to establish a modus vivendi that enables sustainable co-existence (which means at least semi-peaceful and semi-stable ways of muddling along). “Biopower” only identifies where and how power, focused on issues/questions of “life,” intervenes, is exercised. “Biopoliitcs” attends to the ways that placing the question of “life” prominently among the issues a society must address leads to certain political debates/decisions/conflicts in the ongoing collective effort to forge the terms of sociality. We might say that “biopower” suggests a passivity of the part of power’s subjects—a passivity Foucualt always claimed he never intended to convey, yet nonetheless inflicts a vision that is as “apolitical” as his. An odd charge, I know, since Foucault seems intensely political. But his work rarely attends to the collective processes through which power is created and its specific techniques are forged. Instead, power appears out of the cloud like the God in the Book of Job. And it proves just about as unaccountable as that God as well. You can resist it the way you might kick your broken-down car but you can’t get under the hood and actually tinker with its workings. It takes a political vision to imagine that kind of transformative work, a work that would involve negotiation and compromise with others, and the eventual creation of legal and institutional frameworks (invariably imperfect). It would require, in other words, a belief in the power of people to intervene in history, in place of the kind of transcendent power Foucault presents us with.

The State

If, as yesterday’s post argued, trade unions are no longer in a position to effectively counter-balance the power of capitalism, then some other site of power, some other institution, must play that role. The contemporary right (the neoliberals, if we are going to use that terminology) demonizes trade unions at every turn. The moral fury they direct against even the slightest hint of collective action on the part of workers has always baffled me. Just what is morally wrong here? Why is such collective action so reprehensible? Other forms of collective action—political parties, lobbyists, trade and professional associations, the NRA and the AARP—are not anathematized, but trade unions are somehow beyond the pale. I refuse to reduce this to sheer economic interest and bad faith; their moral outrage would be unsustainable if it didn’t somehow resonate beyond the quarters in which it directly serves economic interest.

Of course, the primary rhetorical move is to claim trade unions are an infringement on freedom. Even workers who don’t endorse the union must pay their union dues. A similar argument, of course, is made against the state—with taxes standing in as tyrannical in the way that union dues are. The union and that state are both robbers.

The right’s commitment to undermining unions (which has a long and continuous history dating back to the 1870s) goes hand-in-hand with it more recent commitment to undermining the state. And I think the right is absolutely correct to see the state, like the unions, as a potential danger to its deep commitment to economic inequality. The state is a threat to profit insofar as everyone of its regulations—from labor law to environmental and public health measures—makes doing business more costly.

Despite the right’s (or neoliberalism’s) obvious desire to decrease the power of the state, the left has been much more lukewarm in its embrace of the state. [A side-note: yes, the American right wants to increase the power of the state when it comes to regulating private conduct and in matters relating to “national security.” Capitalism—as the Marriott response to socially conservative legislation shows—has no particular sympathy for the issues that motivate conservative moralists. But the right is still the “party of order”; it does want a strong police force and military; it just doesn’t want any of that state power directed toward reining in money-making practices.)

While you would be very hard pressed to find a leftist who does not think unions are a good thing, attitudes toward the state are more ambivalent. I don’t think the right is wrong when it identifies the state as a potential problem for the achievement of its ends. The state is the only plausible (it seems to me) site of a power strong enough to combat capitalist power. So why don’t leftists rally to the state’s support?

Let me try to count the ways.

The insistence that the state has been entirely captured by the capitalists—and only serves their interests. This morphs into a necessitarian doctrine that such must always be the case. The state will always be in cahoots with capitalism. (The fallacy here is turning a contingency into a necessity. Plus it would seem to encourage a fatalistic quietism; we are doubly screwed because political and economic power work hand-in-hand and it is useless to try to pry them apart. My argument, finally, is that the chances of grabbing political power are, at the moment, better than the chances of grabbing economic power. We have at least a fighting chance on the political battlefront, whereas the legal—and moral and habitual—protections afforded private property make wresting economic power away from the corporations and the wealthy much less likely. It will take a political victory to begin to undermine the sources, structures, and institutions of economic power.)

If #1 is a version of the left’s time-worn critique of “liberalism” and the “liberal state,” now we can entertain the anarchist suspicion of the state, most recently given voice in James Scott’s Against the Grain (Yale UP, 2017). The notion here is that all concentrations of power are inevitably bad. My riposte is that, yes, power tends to accumulate—and that accumulations of power are generally not conducive to the general welfare. But I don’t think there is any wishing away of power—or of its tendency to accumulate. Thus, one needs to find ways to counterbalance powers (in the plural). In a world in which economic power has concentrated on a scale perhaps unprecedented (the “perhaps” because, arguably, the Dutch and English East India companies of the 16^th and 17^th centuries were more powerful than Google and Apple today), to abandon the state as a possible counterweight seems suicidal. There is certainly no reason to think Google is going to be more beneficent than a state—or more accountable. To dismantle political power unilaterally in the face of economic power is to refuse to engage in the contest that we wish to win. It is certainly deeply concerning that, as economic centers of power get larger and larger, political units get smaller and smaller (the break-up of Czechoslovakia and Yugoslavia, the possible break-ups of Britain and Spain).

A harder to characterize, but no less real, general disillusionment with politics as dirty, corrupt, and indirect (taking so much time to effect such imperfect pieces of legislation and the cumbersome bureaucratic state action that follows legislative victories). I feel this way myself some 75% of the time. One result of this sentiment is to turn one’s back on the state and get involved in “service” work. We have seen a huge proliferation of “humanitarian organizations.” These seem “clean” in a way politics is not—and also go out into the field and actually do the work of helping people. The results—even if limited to a fairly small number of beneficiaries—are at least visible in the way that the beneficiaries of state policies rarely are. (We see that the number of uninsured has gone down after the enactment of ObamaCare, but those are numbers not visible people). Despairing of the state’s ability to deliver the goods, many leftists (especially among the young) have turned to non-state charity operations. Letting the political, the state, off the hook in this way, not pressuring it to provide for its citizens, is a bad idea in my view—even though, as a personal choice about where to put one’s efforts, it seems to me more than easy to understand, to be a more appealing course to follow.

The final position, which seems that of Hardt/Negri and some other recent writers, is that the state is a spent force, that it actually no longer has sufficient power to hem in economic power. We must mobilize another kind of power altogether if we are to bring neoliberalism to its knees—or even mitigate some of the suffering it inflicts. Conspicuously absent from such views is any plausible agent of this force that will stop neoliberalism in its tracks. Now, of course, an analysis of the state’s deficiencies need not present something to take the state’s place. If I cannot walk with a broken leg, it does nothing to undermine the truth of my statement that I cannot walk if I do not consider alternatives to walking. The argument that the state is powerless usually point to three factors: 1) capital flight in the age of globalization means the state cannot impose terms/regulations on capital because it will just move to jurisdictions that give it a better deal. We are in a race to the bottom that the state is helpless to stop. 2) Even though the multinational and international organizations—like the GHO and GATT—and the international trade agreements—like the EU and NAFTA—are not particularly effective, they are constraining upon state actions, so power is leaking away from the national state; and 3) the blackmail and direct power of capital is such that most countries are now democracies in name only. There is no path toward citizens getting the state to serve their interests as opposed to the interests of capital. [This last point is a new version of the classic complaint that the state is just an agent of the capitalists. It tends to come accompanied with the notion that the state, therefore, is at best useless and at worst another enemy that must be overcome in the larger fight against capitalism. And the solution offered is usually the direct action of the populace, bypassing the state as its instrument, against the forces of capital. Hence the recurrent dream of the general strike. Refusal, non-compliance, civil disobedience on a grand scale.]

The main burden of this post, then, is that the left abandons the battle to capture the state—and to put its power to work advancing the left’s agenda and curtailing economic power—only at the risk of making a bad situation worse. Despair about the state is really despair about the very possibility of democracy. It can never be a government of, by, and for the people. It will always be the instrument of the economic royalists.

To be concrete: what the state can do to rein in (at the very least) economic power is not a mystery. Three strategies (all of which, I believe, are necessary) are in play.

Interference (regulation and establishing the rules of the game) in productive and money-making operations themselves. This strategy covers everything from setting conditions of work, guarantees of employment and minimum compensation, worker’s rights, unemployment insurance, etc. That is, various laws that alter distribution of effort, risk, and profit internal to capitalist procedures. Protection of—nay, promotion of—union creation and activity. These are all mechanisms to shift the distribution of market inputs and outcomes.

Interference external (or after the fact) of market processes and outcomes. In a word, taxes. Progressive taxation–including income, wealth and estate taxes—that work against the tendency of capital to accumulate in a few hands. Similarly, stringent anti-trust laws to combat the tendency toward monopoly.

Regulation of “externalities”(notably pollution) in the name of the public good, along with the positive provision of certain goods (transportation, health, parks, sanitation, public utilities, and education—I would add housing) that are not well handled by market processes. Here we get environmental regulations and public health measures, plus transit systems, municipal water and electricity, parks, libraries, schools etc.

All of this provides a suitably ambitious agenda for a left that intends to capture the state to serve its vision of the public good—a good that necessarily entails limiting the power of markets to determine either public or individual fates.

Two issues remain.

Must we reconcile ourselves to the existence of markets? Not only are there factions on the left that want to ignore or dismantle the state, there are also factions who declare any tolerance for markets apostasy. I think a regulated market is preferable to any of the alternatives currently on offer (and I mean on offer theoretically as well as in reality.) I would love to be convinced otherwise, to be shown a model of a non-market society that seemed to me both plausible and desirable. Until then, I am going with regulated markets.

The big question. Can the state actually counterbalance the power of capital? If capital is mobile precisely where the state it tied to a territory and most citizens are immobile due to legalities of citizenship and the realities of economic means, then what can the state leverage against capitalism? As I have argued in previous posts, the only place capitalism is vulnerable is the bottom line. You must hold some power over profits, have some way to damage profits, if you want to bring capitalism to heel. Yet it is exactly when the state interferes in profit-making, that capital flees to a new jurisdiction. What can possibly halt capital flight? The answer, it seems to me, is stability. Despite all the rhetoric, lots of capital (hardly all, but hardly an insignificant amount either) hates risk. There wouldn’t be so much money invested in US Treasury bonds (at a paltry return) if safety wasn’t the highest priority for lots of capital. What the rich Western countries have to offer capital are stable political and social orders, along with proximity to rich consumers. This isn’t a pretty answer. It means the West has a market advantage because of its contrast to more turbulent and more impoverished parts of the world. But, at this moment at least, the West needs to trade on this strength by making capital pay for the privilege of investment in the West. It just means the cost of doing business in the West will be higher (because of taxes and regulations) and, in addition (this is where the state needs to start throwing its weight around) there will also be a cost exacted for whatever functions capital exports in order to get around those higher costs. Call this protectionism or whatever you will. But—just as we need a transaction tax to raise the costs to financial capital of its various speculative moves—we need a “flight tax” that does not allow capital to move seamlessly across borders. And if a corporation retaliates by moving wholesale to the Bahamas, then there needs to be an “access tax” to gain entry to the US or UK or French market. These things are not impossible. States have been way too timid in the face of capital flight—especially when those states have jurisdiction over very large markets and enjoy political and social stability.

Enough for today. Plenty to chew on and follow up about.