The Withering of the State

by cominsitu


by Paul Mattick

These days, critics of electoral politics can sit smugly and enjoy the deepening disarray of the political parties; the worries of the 1%, who really want little more from their governments than low taxes, high subsidies, social peace and quiet, and just enough military action to keep the world safe for democracy; and the panicked musings of the political pundits trying to make sense of it all and reclaim their lost function of predictors and explainers. Of course, when (as is most likely) Bernie has finally been done in by the Democratic machine and “progressives” are asked to hold their noses—as they now must do in every election—to vote for the hated Hillary in order to stop the dreadful Donald, it will seem like just one more dreary step downhill, the apparently inevitable result of electoral efforts not to sacrifice the good for the impossible best.

But there does seem to be something special this time. For one thing, both of the most dynamic contenders, Trump and Sanders, apparently entered the lists without expecting to win, and were only moved to give it the old college try when they discovered an unexpected level of response among the voting public. This is another side of the fact of the nearly complete absence of believable contenders beyond those two (and Clinton, of course, but without Sanders she would have been the only one on her side). The Republican field featured an astonishing array of nitwits and nonentities; the fact that Cruz—a man so obnoxious in policy and personality that he is the most hated official in his own repulsive political camp—was the last non-Donald standing says it all. This reflects the absence of any political content to Republican politics but the most simple-minded fealty to the richest Americans combined with assurances of devotion to the emotional needs of increasingly dispossessed white working- and lower-middle-class people.

The Republicans had mutated from the historically progressive anti-slavery party into an organization devoted to fighting New Deal policies in defense of laissez-faire, until Nixon abandoned that core value with his declaration, that “We are all Keynesians now,” and Reagan proved it by tripling the national debt. Similarly, the Democrats were once a real political party, interested in shaping national politics. From the pro-slavery party of the 19th century it turned into a modernizing force, responding to the Great Depression by mobilizing the state—particularly for war—to safeguard American capitalism; it did its best to shape the postwar world into a field for the advancement of American economic and so political interests. By the ’60s the Democrats were established as the party of “corporate liberalism,” as we used to say in Students for a Democratic Society (SDS), holding Communism at bay while maintaining social order at home through such policies as reshaping the urban environment and “fighting poverty,” while promoting the arts and humanities to demonstrate that the U.S. was worthy of its economic preeminence. It was based electorally on Jim Crow in the South and fealty to entitlement programs for (mostly) white people, until that mechanism broke down under the impact of the civil rights movement and the defeat in Vietnam. Given its current political incoherence, it’s hard to imagine why the party wouldn’t have embraced Sanders as a sort of political monkey-gland implant, if it wanted to be a real party again. Everything conspires to suggest that what we have here is not politics as usual, but something new. To begin to understand it we have to think back to the old normal—the workings of the state in modern capitalism.

To my mind, the best guide to a basic understanding of this is to be found in the first book of Hal Draper’s five-volume Karl Marx’s Theory of Revolution. Here Draper discusses the tendency of governments—whose job is essentially to safeguard the existence of modern society by ensuring respect for private property and the special interests, national and international, of the dominant actors in the national economy—to develop a certain autonomy of action relative to the economic activities of its sponsors. This independence from the immediate concerns of businesspeople, Draper says, derives from the fact that “of all the ruling classes known to history the membership of the capitalist class is least well adapted, and tends to be most averse, to taking direct charge of the operation of the state apparatus.” Capitalists want to make money, not run the government (except, more recently, as a retirement hobby). Moreover, “no other ruling class is so profusely crisscrossed internally with competing and conflicting interest groups,” with regional interests, agriculture and industry, different industrial sectors, and many other subcategories of national business struggling against each other. As a result, the need arises for professional politicians, not unlike the need for managers in a large corporation, “to take the Long, High View of the system as distinct from the approach of the myopic money-grubber.”

This autonomization of the state could be seen clearly when the major industrial capitalist economies were emerging in the 19th century, when British entrepreneurs left much of the running of the government to members of the old aristocracy, and Bismarck oversaw the emergence of German capitalism and the disciplining of the superannuated Junker class with an iron hand. In the twentieth century, it became particularly visible in the face of economic crisis, when the capitalist state was turned over to strong managers like Hitler and Roosevelt, despite the distaste of many businessmen for aspects of their economic and political programs. In the U.S., the New Deal and, especially, the Second World War, bringing vast increases in government interference with the private-property economy, strengthened the tendency to state autonomy well into the postwar period.

Paradoxically, the very growth of the “public sector” led to the weakening of its independence. On the one hand, as Draper notes, “one of the consequences of the relative autonomy of the state is to permit the dominant sectors within the capitalist class to secure the main levers of power.” The clearest modern example of this in the U.S. was recognized as early as the 1950s by President Eisenhower under the name of the “military-industrial complex.” Over time it has been joined by the prison-industrial complex and the medical-industrial complex in whose interests President Obama and his party have labored so assiduously, along with the other industrial sectors—construction, finance, education—whose fate is increasingly intertwined with government largesse. One result of this is the penetration of government affairs by inter-sectoral business competition; another is the evolution of politics itself into a form of business, visible in the famous revolving doors linking industries and their governmental regulators, and culminating in such spectacular successes as Bill Clinton’s transformation from striving politico into international money-shifter and fixer for business-minded dictators. That the central activity of American politics seems to have become the collecting and disbursement of huge quantities of cash around elections, a matter of much dismay to those who still pine for a fair and democratic system, is only a symptom of this basic absorption of the state by big business.

One result is the increasing inability of the state to manage the common affairs of its citizens, within the fairly stringent limits set by the needs of a business economy. A goal like the legalization of gay marriage, which combines improving the lives of a certain number of people with the symbolic celebration of the neoliberal virtues of individual self-definition, consumer choice, and hip, distinctive urbanism, can be (at least partly) achieved. (For one thing, it’s free.) But a significant increase in the minimum wage—made necessary by the last decades’ lowering of the cost of labor to well under the level of working-class comfort or even survival—would have a real impact on bottom lines, which is why, in most of the few places it has been introduced, it will be phased in over several years, while prices continue to rise and other costs are cut. A single-payer healthcare system, while probably cheaper for the system as a whole, would cause great harm to the insurance and health management industry.

The fact that this question—like that of raising wages—is still under discussion shows that the state is still cognizant of its raison d’être, even if the limits on its action are narrow. Similarly, governments around the world understand that the most immediate issue facing the human race is the onrushing multitude of catastrophes caused by industrially induced climate change. But they have been able to accomplish nothing of significance in the face of the magnitude of the business interests presently dependent on the fossil-fuel régime. Similarly, the governments that wish to counter, as opposed to those who with to utilize, the forces of political Islam are at a loss: as experts repeatedly point out, the solution of this “problem” would require the transformation of global society into one based on fairness, equality, and governmental responsiveness to human needs.

As this example suggests, the weakness of the state—and not only in the U.S.—is a function not just of its too-tight integration with the world of business, but also of the mismatch between its means and the scale of contemporary social problems. One recent issue of the New York Times suggests the size of that mismatch, as well as the difficulty of well-meaning thinkers to see it. The “Business Day” section for May 11, 2016 featured an essay by economics commentator Eduardo Porter on the need for the U.S. government to take on the task of managing the transition “to a postindustrial economy with little factory work to be had.” As he pointed out, “government at multiple levels played an essential role in shaping the nation’s transition from farms and small towns to cities and factories” during the 19th and 20th centuries. “It could do so again,” he asserted. “What has stopped it is not the lack of practical ideas but the encrusted ideological opposition to governmental activism of any kind.” What sort of practical ideas did he have in mind? “Start with investment in the government’s crumbling infrastructure [. . .] Then there is health care and education.” To accomplish such goals, the government need only “try to rebuild a quality bureaucracy, rather than subcontract so much of its work to expensive consultants and bottom-end contractors that employ the cheapest workers available.” All that holds us back is “the loss of a vision [. . .] of what government can accomplish, when it is allowed to do its job.”

At the top of the page on which Porter’s article appears is the headline, “A Harbinger of U.S. Woes: Puerto Rico’s Fiscal Fiasco is Facing Many Troubled Cities and States.” Mary Williams Walsh’s article explains that Puerto Rico’s “unemployment rate is forty-five percent, schools and hospitals are closing, and the government debt is so huge it makes Detroit’s look modest.” Moreover, she points out, all over America “dozens of cities, counties and states may be heading down the same rabbit hole.” Why? It seems the problem is not “loss of a vision” so much as the inability to deal with “deferred costs.” Governments lack the money to pay promised pensions or the “bonds issued in the distant past”—the days before the vision was lost—“to build bridges, highways, and other projects—even as the projects themselves could by now use expensive makeovers.” This is why, despite Porter’s seemingly sensible thought that instead of funneling money to low-quality profit-making colleges, government should “help finance public universities and community colleges,” every public university I know of is trying to attract private money to make up for cuts in state and federal spending.

The basic problem is that governments in capitalist countries, for the most part lacking economic resources of their own, have to tax or borrow from the owners of capital to meet their expenses. (Taxes on wages are only a disguised form of this, since the money workers don’t get could just as well have gone to their employers as to the state.) While national debts have existed since the 18th century, they took a great leap forward with the expansion of government activity during World WarII, and have basically been growing ever since: The U.S. had a government debt of $16 billion in 1930; today it is nearly $19 trillion. In terms of percentage of GDP,the federal debt had already reached 37.9 percent by 1970; in 2004 it was 63.9 percent. And this is to leave local—city and state—debt uncounted. While an endpoint to the creation of debt so that governments can continue to function has not been reached, this resource is not unlimited. And everything suggests that the limits, though unknown, are sharply sensed even now by those for whom the making of money is the foundation of meaningful existence—and who have to pay the interest, in the form of taxes.

The reason for the continual expansion of government debt is the failure of the capitalist economy to produce the quantity of profit required to expand business investment on the scale required to employ the working population in numbers and at rates of pay that would ensure the kind of life to which it became accustomed after the last world war. But it is this same failure of the business economy to expand quickly enough that makes the repayment of the debt impossible. The only alternative would be, as urban-finance guru Richard Ravitch put it in Walsh’s article, “confiscatory levels of taxation.” But this, of course, would not solve the problem of insufficient profitability. It would, in fact, mean a step towards the further takeover of business activity by the state. And who, in a world where state and business are run by the same people, with the same practical interests, wants that?

Hence the absence of a vision of what government can accomplish—and hence the collapse of politics, the business specializing in (as Bush 41 expressed it) “the vision thing.” Speaking to Eduardo Porter, Professor Lawrence F. Katz of Harvard University described “the huge issue going forward” as: “are we going to care for the elderly with a bunch of minimum-wage workers or people with a better certification offering better care for better pay?” As a member of “the elderly,” I agree that that is certainly a huge issue. Professor Katz could also have asked whether we are going to educate the young, including future elder-care workers, with comfortably-paid professors like himself or with over-worked, low-paid adjuncts, except that we already know the answer to that one.

Perhaps Bernie Sanders, who oversaw a reasonably functioning city government in delightful Burlington, Vermont actually believes his local success some decades ago can be translated to the national level. The illusory character of that vision would be revealed as soon as he made it into office. The unlikelihood of that outcome to America’s election shenanigans, however, is in itself a sign that meaningful change will not come from politicians. The very absence of “great men”—and women—in the political field testifies to the exhaustion of this mechanism for the management of the ongoing disaster that is modern civilization. One can only hope that the accelerating decay of politics will open a way to understanding that the disaster, ultimately unmanageable, must be dealt with in some other, more direct way.