State Economy Society REVISION

State, Economy, Society – REVISION 2018
Market-liberals want the state to be both minimal and strong, while others see the state as a condition of
economic wealth and/or as a means for a just and fair society. What is to be understood by the state? Where does
the state end and society begin? What is the connection between the economy and the state? Can a market
economy work without the state? And who is the master of the law? In the first term the module investigates the
conception of economic wealth, its dynamic and crisis-ridden development, and enquires about the social
purpose of profit, trade and economy. In this term we will be studying the contributions of Adam Smith, Karl
Marx, Karl Polanyi, John Maynard Keynes, Joseph Schumpeter, Michel Foucault and David Harvey. The second
term investigates the relationship between the state and the rule of law, society, economy, class, globalisation
and crisis, and democracy, through the work of modern state theorists ranging from Marx to Weber, and from
Schmitt to Hayek, including recent contributions by, for example, Clarke and Holloway.
1. ADAM SMITH – Classical Liberalism – The wealth of nations

This seminar examines the way in which the classical political economists conceived of wealth, its origins, and
the ways in which it can be maximised. It locates Adam Smith’s writing in relation to mercantilist traditions of
political economy, addresses the relationship between the productive capacity of nations and wealth, and the role
of free trade. We will also examine how the case for free trade was formalised in the writings of David Ricardo.
The aim of this week is to introduce political economy as the study social relations, and focuses on the way these
relations constitute the economy, and the implications this has for governing by the state. It shows Smith's belief
that when an individual pursues his self-interest under conditions of justice, he unintentionally promotes the
good of society. Self-interested competition in the free market, he argued, would tend to benefit society as a
whole by keeping prices low, while still building in an incentive for a wide variety of goods and services.
Nevertheless, he was wary of businessmen and warned of their "conspiracy against the public or in some other
contrivance to raise prices".[84] Again and again, Smith warned of the collusive nature of business interests,
which may form cabals or monopolies, fixing the highest price "which can be squeezed out of the buyers".[
Smith argued that deepening the division of labour under competition leads to greater productivity, which leads
to lower prices and thus an increasing standard of living—"general plenty" and "universal opulence"—for all.
Extended markets and increased production lead to the continuous reorganisation of production and the
invention of new ways of producing, which in turn lead to further increased production, lower prices, and
improved standards of living. Smith's central message is therefore that under dynamic competition a growth
machine secures "The Wealth of Nations". attributes to Smith "the most important substantive proposition in all
of economics". It is that, under competition, owners of resources (for example labour, land, and capital) will use
them most profitably, resulting in an equal rate of return in equilibrium for all uses, adjusted for apparent
differences arising from such factors as training, trust, hardship, and unemployment.
1. What role does the division of labour play in increasing the productive capacity of a nation?
2. What’ does Adam Smith mean when he talks about the economy benefitting from individuals acting in their
self-interest?
• how to increase and maintain the wealth of nations
• political economy - the science of the statesmen and legislators - what to do to produce the wealth of nations, to facilitate the interests
• to liberalise the economy - not the term of liberalism in Smith’s literature
• he wrote a critique on mercantilism
• liberalism - new form - next cent - 19th - describe capitalism - the Sinatra doctrine - individualism, self interest, self love, greed -
political econom is in fact a class economy - 3 classes - the master class - defined by stock (means of production) - has the means of
labour - a particular revenue - profit. - the landlords - defined by their factor of prod - land - get the revenue – rent. - the working class -
the class that labours - gets a particular revenue - factor is hands, they get a wage
• each class defined by what they are what they are not and they need to cooperate - no production without land, instruments or land - to
each factor there is a revenue
Chapter 1
the wealth of nations is a consequence of the division of labour - leads to productivity - more can be done in less time - huge critique of the
mercantilism system. Mercantilism is economic nationalism for the purpose of building a wealthy and powerful state. Adam Smith coined
the term “mercantile system” to describe the system of political economy that sought to enrich the country by restraining imports and
encouraging exports. This system dominated Western European economic thought and policies from the sixteenth to the late eighteenth
centuries. The goal of these policies was, supposedly, to achieve a “favorable” balance of trade that would bring gold and silver into the
country and also to maintain domestic employment. – connection with Ricardo’s theory – the law of comparative advantage – UK – steam
engines, Portugal – wine – a lot of wine for a few steam engines. Both benefit, even if one investment is higher than the other.
• a technical division of labour - the division is the base of labour
• cooperation - the pin making process
• the greater the division, the more enhance the productivity, the more country has
• divide and sub divide the labour - common wealth that triggers down even the poorest that can become richer in a country where the
division of labour exists
• the idea of exchange is greater when division of labour - everyone need to meet their bits - expanded market is created when division of
labour exists - diff people do diff things - it s a society based on trade, commerce - THE COMMERCIAL SOCIETY - function of his
notion of wealth
• institutional division of labour - between economy, society and the state - ever increasing specialisation, division, exchange
• why? - we are born with it - men defined by a natural propensity - our nature is to trade to exchange - it cannot be changed for
something else - either it is natural or it is destroyed - we cannot resist to what is natural.
• good government required for not to be distracted from what is natural.
Chapter 2
• person driven by 1 thing - not by the needs of others - BUT by the self love, self interest - for his pocket - exchange
• this is transformed into a public virtue ( the baker feeds the rest of the people)
• if only self interest - where is the gov? - a producer determinated by self interest wants to destroy the competitor ? - GOV - compete
with your competitor - law, order - beat the neighbour on price, increase the productivity, but don t eliminate it. - the GOV moralises the
conduct, provides order to the conduct - punish, prosecution if not.
• every individual is equal before the rule of law - commercial society is the republic society governed by law
HIS CONCEPTION ON CLASS
• the poor - the working class - driven by indignation - see the wealth, the profit - are likely to revolt - understandable - desperate condition
- but it s wrong because it doesn't help them
• the masters are few, they can cooperate with each other easily - the worker is starved to death - has nothing to live on my his labour - if
withdrawn - they have nothing - defined by the means of production - nothing good comes off it
• what to do? - the conditions are bad - to TRIGGER down effect - to increase options, to produce more - the only way to improve the
condition of this class is by increasing the division of labour, by constantly improving the production - if more wealth - then the poorest
slice becomes bigger.
• the increasing productivity of labour - greater demand, the wages increase - the greater productivity - the higher demand for labour -
better wages
• BUT the masters - the only truly conscious class - the higher the wages - a squeeze on their profits - REACTS - protecting their profits -
hindering a further division of labour. How? - by monopoly pricing - dividing markers - means of protectionism eg. entrance fees on a
market - the masters stop a further development of productivity, hinder innovation, by cartels, divide the markets, protectionist measures,
monopoly prices
• The state has to act - every issue that concerns exchange trade and manufacturing belongs to the police - the public policy in his view -
each participant is reminded of his or her moral duty to contribute to the further division of labour, increase in labour productivity - the
only basis of resolve the problems between masters and workers
• the state is required to guarantee private property, to facilitate the clashes of interests - instead of eliminating one another, no unfair
market - all these resolved by means of law in order to facilitate the good order of commercial society and guarantee its further products.
The state is required to facilitate the cheapness of production. has to do for the market what the market can t do for itself - the state is
there to educate with moral responsibility to act with self love, without our passions running riot, on the basis of law and order in
fulfilment of exchange
The Wealth of Nations
The division of labour leads to productivity – more can be done in less time – divide and subdivide the labour
Common wealth that triggers down even the poorest that can become richer – the exchange is greater – everyone
doing their bit – expanded market – greater demand, the wages increase – higher productivity – higher demand
for labour
The increase of the quantity of work because of the division of labour is owing to – the increase of dexterity in
every particular workman – a man’s business reduced to 1 operation, saving the time which is lost from passing
to one species of work to another, great number of machines which facilitate and abridge labour and enable one
man to do the work of many.
Q2 – when they act for their self interest, people give more in exchange – Give the that which I want, and you
shall have this much you want. The exchange is feasible, fair and based on self interest. Everyone benefits from
everyone. The certainty of being able to exchange all the surplus part of the produce of his own labour. Mutual
need form of exchange. Under capitalism, this is met through money = universal exchange value = allows easier
and expanded transactions on a global level.
Homo economicus – any historical society – people who are drown to home markets. Markets = how society
evolved to distribute the surplus – achieve maximum value -> cooperative competitive society
Mercantilism – when one country gets rich, the other gets poor = zero sum game = gold saving = for expanding
= logic of Impersialism
Q1 wage labor – creates demand – because when someone has a wage his demand for other products increase.
Marx and Smith - the transition from feudalism to capitalism through the existence of wage labour.
The application of Smith’s opinion. - The division of labour can be shown in the international setting.
Riccardo – the law of comparative advantage – a country good at producing wine could produce large
quantities – eg Portugal. UK is good at producing steam engines. He said: Even if Port. has to exchange
their wine for few steam engines, it is still for their advantage and for UK, even if the relative cost is
higher.
If youre specialized on 1 production, you try to maximize this internationally, not rely on domestic
consumption.
Too little demand – no labour – people lose jobs
Too much demands – not enough products and labourers – higher prices – The philosophy of labour?
Wages = rent a labourer is charging for their time – not exploitation as Marx says – The worker has a choice to
work or not
Feudalism = exploitative BUT the obligation of the employer see the maids living in the houses of wealthy
people where the owners made sure they had what they needed – to take care of the employee – not happening in
capitalism.
THE STATE IS PART OF THE DIVISION OF LABOUR – FACILITATES IT – THE INVISIBLE HAND –
ECONOMY AND SOCIETY – THE OTHER 2 MECHANISMS FACILITATING THIS – DIVISION OF LABOUR
AT THE GENERAL LEVEL AND DIV OF LAB AT THE PARTICULAR – WEALTH GENERATOR LEVEL.
THE INTERDEPENDENCE BETWEEN THE STATE, EC, SOCIETY. IN SOCIETY – THE COMMERCIAL SOCIETY – THE LABOUR IS
CREATED – THEN THE ECONOMY IS THE ONE THAT MAINTAINS THE BALANCE IN THE SOCIETY AND THE EXISTENCE OF
PEOPLE OVERALL – SELF INTEREST FAVORATES THE EXCHANGE. THE STATE IS THE ONE OVERSEEING THIS PROCESS. THE
GUIDING INVISIBLE HAND.
2. Marx - critique of Adam Smith - Economic Nationalism

In the previous week we examined the ways in which wealth has been understood to be created, transferred, and
maximised by classical political economists--focussing specifically on Adam Smith. This week we will examine
radical political economists’ views that wealth is not justly transferred between free individuals, but rather is
appropriated from workers by employers through a system that is defined by antagonistic social relations and
class struggle. We will do so primarily through an examination of Karl Marx’s critique of political economy and
Marx and Friedrich Engels’ consideration of the consequences of these social relations in The Communist
Manifesto.
1. According to Marx, what is the origin of profit?
2. According to the Communist Manifesto, what is the role of the state in the capitalist social relations?
• Smith - labour productivity is a factor of ever increasing division of labour

• Marx - important too as a critique
• Smith - difference between the use value, its utility - has to be good for someone - Marx agrees and the
exchange value - he agrees - Marx explain - a prod has to have exchange and use value. If a prod cannot be
exchanged for money - better to exchange the product than give it for free
• A crisis of underconsumption or an overproduction one - too much produced and the market cannot carry it.
• the state is meant to facilitate the continuous division of labour - organization who concentrates in its
institutions what makes civil society rule is based in self interest and the further increase in labour or activity.
• the state is the executive institution of the common affairs of the burgeoise
• Smith - society is classed divided (see 1st lecture) - the masterclass- means of prod, revenue for the prod
(profit) - landrulers (disappears in MARX and others) and the workingclass - 3 classes and 3 revenues -
belong of the productive factor
• Marx asks - is it really the case that the commercial society is the outcome of our human nature? Is this social
diferentiation and the outcome of nature?
• Smith - it is in our genes - natural - to exchange and produce - dynamic of the human development = the
comercial society
• Either nature is progressed further or it is destroyed - Marx - no human nature that develops the man toward
the human society - the Smith s commercial society is in fact a socially constituted society - the outcome of
huge struggles - humiliation and privillege
• Smith talks about originate arhirelation — the acummulation of wealth in small groups of people - social
differentiation
• Marx agrees with the division - not a process of nature - it is a process of violence - primitive acummulation -
UK - land privatised, the natural resources were owned by some people etc - that created the relation between
capitalism and workers - a liberal no longer tighten down to the mass - a labour who is free of the means of
subsistence
• Marx - agrees with Smith- labour is the product of wealth
• BUT if the labourer produces wealth why does she only gets a wage - is this not a robbery? - where is the
profit going? the profit is prodced by labour too
• if we agree with Smith why the labour does give away profit and so on?
• THE COMMUNIST MANIFESTO

• communism = common economy, organization, the idea of having common ownership, property that is not
private
• equality as the rule of law NO - BUT equality of needs, the individual ones -
• if we agree with Smith that the equality is the dynamic - it means theat the burgeoise needs to trade
everywhere - cosmopolitan - buy and sale wherever
• In the context to the globalisation - the burgeoise is not national, he is citizen of the world - he is organized by
a multiplicity of teh national state holding the monopol of violence, setting up the regulation for trade,
manufacturing etc, each one opperates as the institution that opperate the affairs of the burgeoise
• MARX AND THE ISSUE OF PRODUCTIVITY
• series of exploitation - he assumese that there is trade in labour power that the worker is not put in a contract
and the worker gets the value of the product - he is not cheated - human rights - everybody participates in the
exchange as an equal - over his or her own will, to meet their own objectives
• labour power has to exist - the capcitalism is dependent on the workers
• The labour needs the contract because he needs to do what they can to get the wage - the worker gets access
to the means of life - mediated by the labour.
• In this exchange, no cheating - no coerced relationship
• exploitation happens when labour power becomes an activity and becomes liberal
• Marx explains power as an equivalent exhange of equivalent values
• where is the more coming from? - cheatting - not increase, the profit leads to an increase - the increase is
generate by the production process - replaces the original end (money) and gives an addition to it - profit
• How can we explain the surplus in production? - it is not the machinery that gives value, but the workers that
use it - machines increase the productivity of labour - transfer at the end.
• Smith - profit is the product of labour - Marx - how?
• City screen example - necessary labour (hours to justify your wage) and surplus labour time (for profit -
unpaid labour time) - theory the exploitation - assumes that no one is cheated - there is an exchange - each
exchanging for their own benefit - the consumtion the utilisation is how the profit is justified ?!
• unpaid labour = exploitation
• the worker sells his capacity to work - but cannot be separated from himself - intense struggle between the
rights of the buyer and the ones of the seller - these rights can pe protected only by the state
The communist manifesto

Wage labour creates any property for the labourer? No – it creates capital – the prop that exploits wage labour –
Property = based on the antagony of capital and wage labour – Capital is a collective product and a social power.
Q1 – Free labour provides the profit. Surplus value is equal to the new value created by workers in excess to
their own labour-cost, which is appropriated by capitalists as profit when products are sold – no other business
cost is reducible as this. The worker is entitled only to the value of his labor-power. He gets it in full, but
meanwhile the capitalist gets the full value of his worker’s whole working day and this is no longer than the
hours for which he paid. Because capitalists monopolize one thing – access to the means of production
themselves. The proletariat only have their labour to sell – no level playing field.
Q2 – The state – the repressive arm of the bourgeoise – the state is an instrument in the hands of the rulling class
for enforcing and guaranteeing the stability of the class structure itself. = nothing but a committee for managing
the common affairs of the whole burgeoise. The state necessarily exists to serve the interests of capitalists – the
value of property and preservation of capital to ensure the perpetuation of their economic supremacy. AGAINST
SMITH WHO THINKS THAT THE STATE IS THE BALANCING HANDS WHICH ENSURES THAT THE
ECONOMY GOES WELL AND NO ONE IMPOSE MONOPOLIES WHICH COULD DISEMBALANCE
THE SYSTEM.
A portion of the profit is invested in new means of production to expand the profit – machines, new business =
allows capitalism to expand – process of accumulation. In case of perfect competition – their profits go down
because they want to get more costumers. Surplus value – employees have working hours extracted from them
for free – but you can have loss too if you have competitors which sell cheaper products, but you still have to pay
your employee. Not much demand – no matter how much you’ve worked, but how much you got in exchange for
it.
When competition too high, profit smaller and smaller – the labour of workers is squeezed at maximum – 0-hour
contracts, longer working days. – when fed up, Marx suggests overthrowing the system by the proletariat – To
avoid this, Marx suggests that one solution is the creation of monopolies – artificially increase prices and
keeping them up through cartels, etc. Gov implement Control bodies to stop an excessive monopoly.
FINE (2010) – Critique related to class. The critique has two separate components, one concerning class
structure, the other concerning the implications of that structure. In short, and partly because Marx allegedly
predicted increasing polarisation in class structure (including, wrongly, the presumption that Marx supports the
notion of the ‘absolute’ pauperisation of the workers), it is argued that the division between bourgeoisie and
proletariat is too crude, and, not least because of Marx’s revolutionary aspirations for the working class, class
action and ideology have presumably failed to match his expectations and those corresponding to his posited
class structure. For example, why do wage workers vote for right-wing governments, and why do conservative
governments introduce reforms that bene t working people? These questions are taken up below. At a methodo-
logical level, concerns are voiced over both the structure of Marx’s theory and its causal content. For example, it
is deemed to be too deterministic and reductionist – supposedly it implies that everything flows from the
economic, with the economic itself identified primarily with production and class relations.
Critique related to state - Once again, Marxism has been subject to criticism in the form of parody, with its
theory of the state perceived as reducing to the simple proposition that it serves the ruling class and, hence,
capitalist interests. This is immediately open to the objection that the state often implements policies that bene t
working people, especially through welfare reform. Marxism is then crudely portrayed as defending itself
through understanding reform as a devious strategy on the part of the ruling class to pre-empt revolution – where
it is not otherwise securing a working class better able to produce (and fight wars) on its behalf.
BURNHAM - Marx indicates that our first task is to focus on the relationship between the direct producers and
the owners of production to ascertain how the ruling class secures the extraction of surplus value. The particular
form and mode in which the connection between workers and means of production is effected is what
distinguishes the various economic epochs of the social structure. On this basis it is possible to introduce
consideration of the state, since as Clarke (1938) clarifies, ‘the state does not constitute the social relations of
production, it is essentially a regulative agency, whose analysis, therefore, presupposes the analysis of the social
relations of which the state is regulative. The analysis of the capitalist state conceptually presupposes the
analysis of capital and of the reproduction of capitalist relations of production, despite the fact that in reality, of
course, the state is itself a moment of the process of reproduction’. The character of the capitalist state, and by
implication the international state system, is therefore to be analysed against the background of the tensions and
contradictions inherent in the development and reproduction of the capitalist mode of production.
In this light, class relations do not impinge on the state, they do not exist in ‘domestic’ society and make their
presence felt by influencing the state which operates in the international realm. Rather the state itself is a form of
the class relation which constitutes global capitalist relations. These relations appear, for example, as British
relations on the world market. Yet as Marx clarifies in The Civil War in France, struggles between states are to
be understood, at a more abstract level, as struggles between capital and labour which assume more and more the
character of the national power of capital over labour.
3. GLOBALISATION – A STATE IN RETREAT
In the debate on globalisation, the relationship between state and economy is said to have led to liberation of the
economy from the national state, which established the economy as a global economy and led to the retreat of
the state from a political power over the economy towards a market liberal state, or competition state. The
seminar scrutinises the meaning of this contention, and asks about the impact of economic globalisation on the
idea of democratic government. Seminar Questions:
1) Globalisation emphasises the liberal character of the state. Discuss.
2) What does it mean to say that the state was in retreat and is now resurgent?
What sort of state lies behind a free capital?

Globalisation - power of the market over politics
The state is the operating agent
Anti globalisation demand for democracy, for the resurgence of the state as power over economy to regulate it
democratisation - Trump, Brexit (sovereignty, democracy, British rule of law)
what is sovereignty in the context of Globalisation? - is the banker sovereign? - who is directed by what is
rational in terms of financial calculations or the state whose public policy has been changed by economy
if there is political sovereignty, how does it express itself?
The RULE OF LAW - does it apply to chaos? is it actually dependent economically socially and so on. Order
and law? Law regulates order, not disorder
was the rule of law in Greece sovereign? - who decides whether the rule of law applies?
Hayek - democracy is a danger for the rule of law
There is nothing above the states - international relations - nothing superior controls them - power of the state as
the supreme political actor in the world.
Globalisation - different - still have International Relations, world’s population, but above states we have euros,
pounds, dollars, yens - multi transnational banks, transnational financial system - sending money from one
country to another in seconds - change states’ policies in terms of what they can do - multinational corporations -
they can invest in one place and disinvest in another and figure out their policies in connection with financial
context - eg too high taxes in UK, move the investment somewhere else - their actions are reflecting what is best
for them, not patriotism
Economic sovereignty has been lost
De-democratisation - People make their choices - if they are politically viable, it depends on the actions of the
continuous investment and the decisions made by transnational companies - to invest or not in the country
Past: National economy regulated by a national state - that state was answerable to a democratic majority - and
regulated its national economy accordingly
Globalisation - national ec no longer exists - it has denationalised itself - has become some sort of global
economy -> global market
This leads to a powerless state - has been enforced into retreat
The previous state - instead of this democratic regulation of a national economy and so on - we now have a
competition state - the state competes with other states for economic investment, to retain investment already in
the country and to attract further investment
The state is powerless vis-a-vis the economy,its demands and so on - it is a competition state
Powerless competitor? - How do you compete without power? - state - compete to make its national territory
attractive as a point for investment
States’ powerlessness - related to the state as a democratic institution - globalisation in fact emphasises a process
of de-democratisation which enhances the state as a liberal state
Retreat - from the market, to a new position of safety

Retreat from policies , welfare, socially comprehensive systems of cooperation, the conception of economic
policy for the common democratic good, from the idea of democratic state
Retreat to the endorsement of market criteria, politics of privatisation, deregulation and flexibilisation of labour
market, to the idea of self responsibility, politics of triggering down rather than redistribution, self reliance, the
big society where the state lets people themselves
The state is no longer the idilic idea of the democratic state, retreat from the economy as a national economy -
the idea of powerless state as a powerful liberal state that reorganises its economy in order to facilitate global
investment and to attract global investors in competition with the states that are trying to do the same
When has state the power over the Globalisation? -50-60s

the competition state - Smith - role of the state is to facilitate economic progress - is this not state as a
competition state? - the state functions are defence, the state governs by the liberal rule of law, the state is
necessarily to provide what it requires for its social project but can’t facilitate for itself for the lack of
profitability (nuclear power stations etc) - companies would invest in this state - security of property, stability,
rule of law etc - smith’s LIberaL STATE
Is this globalised state not a version of Smith’s state? - which is a liberal state.
Liberal state vs Democratic state
1. HIRSCH – New world disorder – the crisis of Global Fordism – the capitalist formation – based on
particular societal model and mode of accumulation led by the US and developed since the 1930s under
East West tension – Characteristics – Taylorist mass production and consumption, development of
welfare state, Keynesian state intervention – economic growth and full employment.
Under capitalism – more and more difficult to secure democracy, and HR within the democracy and nation
state. The struggle for freedom, welfare, democracy and HR can only be effectively fought out on the global
place – Globalized capital necessities a world wide and internationally inter-twined democratic movement
of resistance – break through bourgeois democracy.
A democratic development can only emerge if the democratization processes located on the local, regional,
national and international levels become tightly interwoven.
Nation state – not the main instrument and goal for democratic politics
Nation state – overrun by capitalist development itself as framework for democratic process.
2. BONEFELD (2010)
Neoliberalism – began with the end of the Bretton Woods system of fixed exchange rates in 73 and the following
liberalization of financial markets in Thatcher’s GB. Neoliberalism is thus identified with a specific capitalist
regime of accumulation, characterized by the dominance of finance capital over productive capital. Ordinarily,
neoliberalism is associated with a weak state that is unable to resist market forces. The neoliberal state functions
as a market facilitating state. The neoliberal regime of accumulation is said to have ended in 2008 when the
banking industry ‘did not hesitate to “bring the state back in”, in an even more radical way than in Keynesian
times’. Once the state was back in, neoliberal capitalism transformed into a ‘kind of “financial socialism”. The
socialism socialized the financial losses, guarantees toxic debt and secures private gains, and in order to balance,
attacks conditions. It amounts to a huge redistribution of wealth from labour to capital. Financial socialism well
illustrates Marx’s notion of the capitalist state as the executive committee of the bourgeoisie.
The notion that the state has been ‘brought back in’ suggests a resurgent state, one that has regained some
measure of control over the market. This view implies a conception of market and state as two distinct modes of
social organization, and the perennial question about such a conception is whether the market has autonomy vis-
à-vis the state, or the state vis-à-vis the market. The social constitution of state and market as distinct forms of
social relations is not raised. Following Clarke (1992), this paper argues that the capitalist state is fundamentally
a liberal state.
Arising from its ashes is ‘the new era of postneoliberalism’ (Brandt and Sekler, 2009: 12)—a response,
according to Brandt and Sekler, to ‘the (negative) impacts of neoliberalism’, whose specific mode of
organization is as yet unclear. It could range from social democracy to military dictatorship, and from radicalized
Keynesianism to the militarization of social relations. Whatever its precise mode of organization, at its base post-
neoliberalism is a rejection of financial capitalism, carried by social forces that demand a return to sustained real
economic growth (Brandt and Sekler, 2009: 11–12). The spectre of the coming era appears, thus, in the form of a
strong and capable ‘post-neoliberal’ state that makes money its servant, putting it to work for growth and jobs.
The post-neoliberal state is thus conceived of as a powerful state that polices the market with strong state
authority in favour of progressive productive accumulation, creating jobs and wealth.
For Smith, private property is the consequence of the development in the division of labour. It gives rise to the
growing social differentiation of society into distinct social classes, and its extension increases the social surplus,
which leads to the expansion of private property. This expansion lays the foundation for the separation between
civil society and state in capitalism.
Smith determines the state as the political form of private property, and derives state purpose from the
needs of private property. The state is to protect, maintain and facilitate the law of private property. Smith
specifies a number of indispensable state functions. Apart from defending the country against external threats, it
has to provide for an exact administration of justice in order to resolve clashes of interest between property
owners. For him, ‘justice ... is the main pillar that holds up the whole edifice’ (1976b: 86). It safeguards the
rights of the individual to liberty and property, guaranteeing the framework of civil society. The state is
indispensable also for the provision of public goods that are required for the operation of the market, but which
cannot be provided for by the market itself for lack of profitability. Smith introduces the subject of the class
struggle between capital and labour, arguing that ‘common wages of labour depend every where upon the
contract between those two parties, whose interests are by no means the same’. That is, the ‘workmen desire to
get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the
latter in order to lower the wages of labour’. According to Smith, the resolution of the class conflict can only lie
in determining the true interest of the worker, and the true interest lies in sustained progressive accumulation.
‘Workers do well not to struggle, because with the increase of surplus, stock accumulates, increasing the number
of workers, and the increase of revenue and stock is the increase of national wealth. The demand for those who
live by wages ... increases with the increase in national wealth’ BUT MARX SHOWS THE OPPOSITE – THE
WRKERS WILL ALWAYS STRUGGLE BECAUSE THE LAND OWNERS WILL ALWAYS BE SELF
INTERESTED AND EXPLOIT THEM TO GET MORE AND MORE PROFIT. MORE WORKAND THUS
MORE PROFIT DOES NOT GENERATE BETTER LIVING CONDITIONS FOR THE POOR, ONLY
WIDENES THE PAY GAP BETWEEN THE TWO CLASSES.
The ability of the state to protect and maintain the law of value depends on its separation from civil society—it
is the state’s independence from society that allows its effective operation as a capitalist state. Failure to
maintain its separation from society will ‘eventually lead to class war’. Its proponents construct the liberal state
unashamedly as a class state that, ostensibly, operates in the true interest of workers—in jobs, wages and
conditions, and thus in the progressive accumulation of capital.
Friedman – the state is essential both as a forum for determining the “rules of the game” and as an umpire to
interpret and enforce the rules decided upon’, and enforcement is necessary ‘on the part of those few who would
otherwise not play the game’
After all, it is her social labour that produces the ‘wealth of nations’, and this in a context in which ‘the labourer
belongs to capital before he has sold himself to capital’ (Marx, 1983: 542). The hopeful suggestion, then, that a
‘post-neoliberal’ mode of capitalist regulation will be one of job creation translates working-class demands for
employment and social security into a politics of economic growth and, that is, into pressure on the state to
facilitate the increase in the rate of accumulation (see Clarke, 1991b: 200). The working class, then, remains an
‘object of state power. The judicial power of the state stands behind the appropriation of labour without
equivalent by the capitalist class, while preventing the working class from using its collective power to assert the
right to the product of its labour’
That is to say, the notion of constant capitalist regime changes exposes a shrinking of historical consciousness. It
justifies forgetfulness. I have argued that the character of the neoliberal state is not defined by its relationship to
the market, but by class. I have further argued that the capitalist state is fundamentally a liberal state. Whether
one refers to it as neoliberal, post-neoliberal, Keynesian, Fordist or post-Fordist, the state’s purpose, which is
intrinsic to its bourgeois character, is to ‘govern over the labour force’. The old chestnut of the state as the
executive committee of the bourgeoisie sums this up well.
3. JESSOP (2010)
Marx and Engels – the expansion of the world market was inhibited by the frictions entailed in a plurality of
states and local markets and the underdevelopment of finance. Thus, the world historical achievement of
neoliberalism has been to reduce the frictions and constraints on capital accumulation deriving from states as
national power containers and from inefficient financial markets to reinforce the dominance of exchange value
over use value in the global economy, to secure changes in extra-economic relations which facilitate the global
expansion of capitalism and weaken any resistance to these effects. Overall, this reinforces tendencies to uneven
development, as zones of instability and crisis are created as a condition and effect of relatively crisis-free
expansion elsewhere.
For globalization affects not only the territorial sovereignty of states (through the gap between intensified world
market integration and the still largely national architecture of many state apparatuses), but also their temporal
sovereignty in the sense that hypermobile, superfast capital undermines normal policy cycles. This said, the
many social forces and mechanisms that generate globalization put pressure on particular forms of state with
particular state capacities and liabilities, and with different unstable equilibria of forces. This requires serious
engagement with the modalities of globalization and with the specificities of state forms and political regimes.
Likewise, the differential and uneven dynamic of globalization will have different impacts on metropolitan
capitalist states, export-oriented developmental states, rentier oil states, post-colonial states, post-socialist states,
etc. This excludes a zero-sum approach to the relation. between world market and state power in terms of a
singular emergent borderless flow-based economy operating in timeless time that is expanding at the expense of
a plurality of traditional national territorial states operating as ‘power containers’ that control fixed territorial
boundaries. The dynamic of the world market has crucial territorial as well as flow dimensions.
World market integration enhances the economic and political power of capital in so far as (a) it weakens the
capacity of organized labour to resist economic exploitation through concerted subaltern action in the economic,
political and ideological fields, and for which the ‘multitude’ alone is not an effective substitute; and (b) it
undermines the power of national states to regulate economic activities within mainly national frameworks.
First, in so far as states, regardless of any other activities they may perform, remain integral moments in the
expanded reproduction of the capital relation, any loss of formal territorial sovereignty by national states
through the upward, downward and sideways transfer of powers may be compensated by pooling sovereignty
and/or enhanced capacities to shape events through interscalar coordination.
The overall impact of the increasing integration of the world market along primarily neoliberal lines has been to
strengthen international financial capital at the expense of productive capitals that must be valorized in particular
times and places
WEISS (1997)
The new globalist orthodoxy posits the steady disintegration of national economies and the demise of the state’s
domestic power. This article, instead, seeks to show why the modern notion of the powerless state, with its ac-
companying reports about the demise of national diversity, is fundamentally misleading. In contrast to the new
orthodoxy, I argue that the novelty, magnitude and patterning of change in the world economy are insufficient to
support the idea of a ‘transnational’ tendency: that is to say, the creation of genuinely global markets in which
locational and institutional— and therefore national—constraints no longer matter. The changes are consistent,
however, with a highly ‘internationalized’ economy in which economic integration is being advanced not only
by corporations but also by national governments. Proponents of globalization overstate the extent and ‘novelty’
value of transnational movements; they also seriously underrate the variety and adaptability of state capacities,
which build on historically framed national institutions. My argument therefore seeks not simply to highlight
the empirical limits and counter-tendencies to global integration. More importantly, it seeks to elucidate
theoretically what most of the literature has hitherto ignored: the adaptability of states, their differential
capacity, and the enhanced importance of state power in the new international environment.
First, even if we accept that national economies are more integrated through trade and investment flows than in
the recent past, it appears that in all but the smallest economies, trade constitutes quite a small share of gdp, with
exports accounting for 12 per cent or less of gdp in Japan, the us and the ec. This means that in the main
industrialized economies around 90 per cent of production is still undertaken for the domestic market. The
national bases of production—and, as we saw, for investment—therefore seem as pronounced as ever.
A second pattern runs counter to the idea of a globalizing tendency. Whereas globalization predicts more even
diffusion between North and South, in fact world trade, production and investment remain highly concentrated in
the oecd—that is, in the rich North. Over the 1970–89 period, the North’s share of trade grew from 81 per cent to
84 per cent— though the decline of the South’s share in world exports masks their changing composition.
For many commentators, the power of global finance—especially of the bond market—to undermine the
monetary and fiscal policies of governments seems an incontrovertible truth. It is also viewed as the key con-
straining feature of a globalized economy: forcing all governments to adopt similar neoliberal—deflationary,
fiscally conservative—policies. From this perspective, two conclusions follow. First, global money markets are
all-powerful, forcing on governments fiscal conservatism —read ‘powerlessness’. Second, it matters not whether
a state is weak or strong; all national governments are impotent in the face of global finance. Here I will examine
each of these claims in turn.
The variety of ‘national capitalisms’—continental European, East Asian, Anglo-American—finds a parallel in

the variety of ‘state capacities’ for domestic adjustment strategies. Contrary to globalist predictions, I propose
that national differences are likely to become more rather than less pronounced in a highly internationalized
environment, thus exacerbating rather than diminishing current differences between strong and weak states.
In a comprehensive recent study, Hirst and Thompson propose that certain traditional powers are declining: ‘The
power of nation states as administrative and policy-making agencies has declined’ while the state’s role as an
economic manager is ‘lessening’. In this respect, they appear to overlap with the globalists. In a more nuanced
approach, however, they insist on the enduring importance of the nation-state— not in traditional terms as
sovereign power or as economic manager, but as the key source of legitimacy and the delegator of authority to
powers above and below the national level. Its territorial centrality and constitutional legitimacy assure the
nation-state a distinctive and continuing role in an internationalized world economy, even as conventional sover-
eignty and economic capacities lessen: ‘Nation-states should be seen no longer as “governing” powers... Nation-
states are now simply one class of powers and political agencies in a complex system of power from world to
local levels...’34 According to this interpretation of current tendencies, state power is being reduced and
redefined on a broad scale, stripped to the basics, becoming even a shell of its former self: still the supreme
source of legitimacy and delegator of authority, but exercizing no real capacity over its economic domain.
In failing to differentiate state capacities, global enthusiasts have been blinded to an important possibility: that
far from being victims, (strong) states may well be facilitators (at times perhaps perpetrators) of so- called
‘globalization’. Although those researching in the field have yet to explore this possibility, there is sufficient
evidence to suggest that this would be a promising line of enquiry. Such evidence as exists for Japan, Singapore,
Korea, and Taiwan indicates that these states are acting increasingly as catalysts for the ‘internationalization’
strategies of corporate actors. As ‘catalytic’ states (see below), Japan and the nics are taking the bull by the
horns, providing a wide array of incentives to finance overseas investment, promote technology alliances
between national and foreign firms, and encourage regional relocation of production networks.
‘Internationalization’ in Japan has become a key strategy of its bureaucracy. Through agencies such as miti,
Japan has sought to manage the trade imbalance with the us by facilitating the off-shore relocation of the
production process in industries such as micro-electronics.
More generally, so-called ‘globalization’ must be seen as a politically rather than a technologically induced
phenomenon. It is political, firstly, in the general sense that the opening up of capital markets has occurred as a
direct result of governments, either willingly or unwillingly, ceding to pressure from financial interests. But it is
political also in the more specific sense discussed here: that a number of states are seeking directly to facilitate
rather than constrain the internationalization of corporate activity in trade, investment, and production.
The final strand in my argument is that we are witnessing changes in state power; but these changes have to do
not with the diminution but with the reconstitution of power around the consolidation of domestic and
international linkages. As macroeconomic tools appear to lose their efficacy, as external pressures for
homogenization of trade regimes increase, and as cross-border flows of people and finance threaten the domestic
base, a growing number of states are seeking to increase their control over the external environment. State
responses to these pressures have not been uniform. They have varied according to political and institutional
differences. But, in general, one of two strategies has prevailed. Both involve building or strengthening power
alliances: ‘upwards’, via inter-state coalitions at the regional and international level, and/or ‘downwards’, via
state-business alliances in the domestic market.
Weiss - Make connection with Bonefeld – same opinion – post-neoliberalism – state has a change in power, but
it has an impact – it is a strong state – contribute to the consolidation of the everchanging domestic and
international relations.
So states are no longer powerful in their national dimension, having control only on their national economy,
they seek to have control over the international one which guarantees them even more power through exerting
influence on the international system, benefiting their national economy. They might not have full control on
their national economy from a bureaucratic perfective, but they have a say in in international context, which
counts more than a closed national economic system. International relations, strengthening power alliances give
them more advantages.
Rather, the state is constantly seeking power sharing arrangements which give it scope for remaining an active
centre, hence being a ‘catalytic’ state. There is a shift in power from the national level to the international one,
the state seeks to increase its dominance on the international level because this benefits directly on its national
economy.
First, the world economy is an internationalized economy, increasingly a regionalized economy; but it is not
genuinely a globalized economy in which territorial boundedness and geographic proximity have declining
importance for economic accumulation. While money and finance have increasingly become ‘global’ in some—
but not all—aspects of their operation, the same cannot be said of production, trade or corporate practice.
Finally, however, because domestic state capacities differ, so the ability to exploit the opportunities of
international economic change—rather than simply succumb to its pressures—will be much more marked in
some countries than in others. For while current tendencies in the world economy subject more and more
national economies to similar challenges and opportunities, these are likely to solidify the institutional dif-
ferences that separate the weaker from the stronger performers. Eg – the rise of East Asia - building state
capacity, rather than discarding it, would seem to be the lesson of dynamic integration. As we move into the next
century, the ability of nation-states to adapt to internationalization—so-called ‘globalization’—will continue to
heighten rather than diminish national differences in state capacity and the accompanying advantages of
national economic coordination.
4. Hayek and the Liberalist State - The road to selfdom
The neoliberal conception of the state belies the conventional view that it is in fact a weak state. Neoliberalism
conceives of the state as a strong state. It argues that unfettered democracy contains a threat to liberal
government, and argues that for the benefit of free markets the liberal rule of law has to sovereign.
1) Assess the claim that the state is indispensable for the existence of the free market.
2) The liberal state is superior to the democratic state in making the rule of law effective. Discuss.
The liberal state is a planner for competition - public policy is a policy for competition and its competition
Everybody is free if they are bounded by the law. The law is not directive, cannot tell people what to do, it is the
rules of the game, but doesn t tell anybody what to do.
The law is a formal one that operates like a traffic light, it tells when to stop, but it doesn’t tell people where to
go. It’s the law that allows everybody to be free, but does not exercise power over any group in particular.
the argument - as a reaction to the democratic state, the establishment of a mass democracy.
Democracy allowed the development of a state as a planned one - as a socialist state, etc etc -. this lead to
totalitarianism, to authoritarianism (Hayek) - men should not obey any other men - they should be their
entrepreneurs of their own circumstances
Neo-liberalism fights for the state, recognises that it is the indispensable power in a free economy, rejects
laissez-faire, because if you endorse this, it doesn’t matter who wins the elections. Democratising the rule of law,
by making the state a servant to particular social interests, social classes has totalitarian consequences - policy of
full employment, nazism, etc.
The conditions for liberalism - how can gain a economy that is governed solely by the rules of the game - we
need a strong state - laissez-faire does not apply to the state - it has to take independence from society and from
the economic power, from the social interests in order to be governed solely on the basis of the rule of law. a
framework that sets the conditions of conduct in society and economy.
This state plans for competition, it is a competitive planner.
A state that facilitates the economy as recognising the importance of the individuals and so on.
The crisis of 1970s - state of states’ authority, of legitimacy.

The economy was judged to be depoliticised. - Planned chaos
Rather the state being responsible for economy, for full employment, it is the mackerd. The people will find jobs
because they will be left out the welfare system and they will attract themselves into the market with new skills
and recognise themselves entrepreneurs of their own future - the state had to be rolled back out of society and
out of economy - it doesn t mean the disappearance or the retreat of the state - for independence of the economy
require the independence of the state. The deep depoliticisation of the economy entitled the politicisation of the
state as an open government.
The electorate having expectation from the state - created a dependency
There are economic consequences - the states become unlimited in its pursue of economic regulation - it does all
things for all people - the unlimited state is the weak state - it has to principles to defect, it is weak because it
cannot distinguish what is right and wrong, because it is governed by powerful social forces, because it doesn t
say stop it (people are responsible fro their own circumstances - ask yourself what you can do for yourself - if
you go bankrupt, you don’t get nationalised).
!!!!!!THE DIFFERENCE BETWEEN THE LIBERAL STATE WHICH IS LIMITED, BUT HAS POWER,
AND THE DEMOCRATIC STATE WHO, BECAUSE IT HAS TOO MUCH POWER ON EVERYTHING, IT
IS GOVERNED BY THE SOCIAL FORCES, MORE LIKE A CARE TAKER THAN A LEADER. The
demand for the state that moves itself out of the society - the one that is not the night-watching state - it is
actually defined as a toned state, that it doesn t let itself be captured by the ones incapable, who abdicate their
own economic responsibility - it is a state that limits democracy to the liberal principles.
It governs on the basis of the rule of law.
A dictatorship imposes its limits, so it can be more liberal that a democracy.
A democracy can make the state unlimited, the state politicises the economic and social relations, the state
becomes the ones who looks after society, this is not a liberal state, a liberal state might require the roll-back of
the state from the society by dictatorial means. A framework where the invisible hand can do its job, recognise
competitors, the existence of entrepreneurship.
Poverty is not unfreedom - it is an incentive (Keynes Joseph?!) Poverty is an opportunity to become rich.
Employability replaced employed as a category.
The state is essential as a forum for determining the rules of the game and as an empire for deciding the rules of
law.
The state has to promote competition, has to do for the market what the market cannot do for itself and to
enforce the rules of the game. Liberals must employ political channels to reconcile differences. The state is the
only organisation that provides the means through which we can modify the rules.
Smith - also - provide a system of justice, the rules of the game, facilitate competition, and enforce the rules of
the free economy against those who do not want to live by it - this division of labour, the wealth creating system
depends on good government - he defines the state by the word of police. A state of market police (Friedman). -
it governs for the market, for the undistorted market freedom, for entrepreneurs for labour power. sets the rules
and expect you to behave accordingly.
Market police - a politicised state - if, according to Hayek we are free when we have to obey only the rule of law,
then our relationships as individuals where everyone is responsible for the consequences for our own decisions
and treating each other as equals before the rule of law, if as equals pursue our own interests only, then there
cannot be any coercion between the people, no one tell anybody else what to do. No politics in society - the
political has to be absent if politics exist, we are not equal, someone tells us what to do. In his society, there is
equality, regardless everything, everyone enjoys themselves as equals before the rule of law - everyone is free to
pursue our own interests as long as we follow he rules of tlaw - as traffic lights.
The state just enforces the rules of the game, facilitates, embeds, concentrates the power of the political in its
own sphere, nobody is allowed to contest that, to be more equal than anybody else. the depoliticisation of the
economy in the society presupposes the state as a monopoly of the political. Everyone is free to pursue their own
utilities under the rule of law. Exchanged society is the society of contracts between equals. Contract - the public
authority of the rule of law, as a formal, non-directive rule of law, that guarantees the freedom of our society.
And justice therefore is not the one of redistribution as in Keynes, it is the pursue of society by equals each
entering contracts with each-other without coercion or violence, without making anybody answerable. - the
opposite would be against liberal principle.
1. Hayek – The road to serfdom
Ch5. - Thus, he writes, efforts by central planners to coordinate the economic activity of a whole society are
fundamentally flawed and doomed from the start. The limitations of planners’ knowledge and their inability to
reconcile conflicting wants among different groups within society leads both to plans based on insufficient (and,
furthermore, unattainable) knowledge of individuals’ and groups’ values and a system that necessitates the
sacrifice of some parties to others.
In support of this, however, he offers an argument that both fails to challenge the collectivists’ ethical premise
and reaffirms the skepticist moral approach observed in his earlier chapters. In reference to the collectivist moral
premise, Hayek writes,
“The ‘social goal’ or ‘common purpose’ for which society is to be organised, is usually vaguely described as the
‘common good’, or the ‘general welfare’, or the ‘general interest’. It does not need much reflection to see that
these terms have no sufficiently definite meaning to determine a particular course of action” (42).
Hayek is correct in acknowledging that the terms are non-objective. What he fails to do is to challenge their
validity as ethical concepts, repudiating the very notion of a “common good” or of the “general interest.” An
objective, rational defense of individualism is not made by simply proclaiming the functional superiority of
individualism over collectivism, as that superiority has been made clear throughout history, and avowed
collectivists have long-since proven themselves disinterested in actual consequences and results. The ultimate
defense of individualism must challenge the very existence of any alleged collective good that is apart from and
contrary to the good of the individuals who constitute it.
Hayek’s only moral challenge to collectivism, rather than refuting the notion of the “common good”, is to
challenge the possibility of any complete system of values. To be clear: Hayek does not challenge the imposition
by force of a complete system of values; he challenges instead that one can even exist.
Having established in the last chapter his flawed view that the basis for freedom arises from the need to leave
room for unexpected growth, Hayek now states his defense for individualism as based on man’s non-
omniscience. That is: individuals are the primary unit of political consideration not because they have any
natural rights, but because the attempt suppress and control them is forever limited by the knowledge problem of
their would-be masters.
Conversely, one can assume that if such masters were able to attain perfect knowledge, he would have no
arguments with which to oppose their collectivist system. The battle between individualism and collectivism is
thus, for Hayek, reduced to a pragmatic debate between those who doubt the efficacy of totalitarian systems and
those who claim that, despite the history of failure in socialist systems, this time they have the right answers.
Hayek is not without his own misconceptions as to the true nature of democracy, though, nor the relationship
between democracy and capitalism: “If ‘capitalism’ means here a competitive system based on free disposal over
private property, it is far more important to realise that only within this system is democracy possible. When it
becomes dominated by a collectivist creed, democracy will inevitably destroy itself” (52).
To say that democracy is possible only within “a competitive system based on free disposal over private
property” ignores the fundamental nature of democracy. Despite the typical usage of the term today, democracy
in its pure sense entails no protection or recognition of rights whatsoever. As it was designed, democracy is a
system of unlimited majority rule.
Capitalism does rely upon certain legal and political necessities such as individual rights and objective law. What
is perceived as the hallmark of democracy—the ability to vote—is not, however, sufficient to secure democracy
and may, in the absence of the other two features, destroy it. True, there exist milder democracies throughout the
world today that do recognize rights, but their regard for rights does not derive from their nature as democracies.
The recognition of rights is only an adjunct to—and, furthermore, a limitation on—the democratic system. The
more that alleged “democracies” alter their nature to accommodate individual rights, objective law, and the
principles of capitalism, the more they shed their democratic nature and acquire the qualities of a representative
system suited to capitalism: a republic.
Ch. 6 – The state should confide itself to establishing rules applying to general types of situations, and should
allow the individuals freedom in everything which depends on the circumstances of time and place. If the actions
of the state are predictable, they must be determined by rules fixed independently of the concrete circumstances.
If the state is precisely to forsee the incidence of its actions, it means that it can leave those affected no choice.
Hatd to be impartial, even if desirable. But where the precise effects of gov policy on particular people are
known, where gov aims at particular effects, it cannot be impartial.
Planning necessarily involves deliberate discrimination between particular needs of different people. It does not
matter which side of the road you drive as long as everyone does the same. Important – the rule enables us to
predict other people’s behavior correctly and should be applied to all cases even if in a particular case it might
seem unjust. Laissez-faire – ambiguous and misleading of the principles on which a liberal policy is based.
The rule of law – a legal embodiment of freedom. Kant – Man is free if he needs to obey no person but solely the
laws. Perception – democratic state – so long as all actions of the state are duly authorized by legislation, the
Rule of Law will be preserved. Eg. Hitler has obtained his unlimited powers in a strictly constitutional manner –
whatever he did was legal in the juridical sense. But this doesn’t mean that the rule of law existed in Germany
during his time. No objectivity.
Planned society – rule of law – the use of govs coercive powers will no longer be limited and determined by pre-
established rules. By giving the gov unlimited powers the most arbitrary rule can be made legal – a democracy
may set up the most complete despotism imaginable. However, if the law enables authorities to direct ec. Life, it
must give them such powers to make and enforce decisions in circumstances which cannot be forseen. The rule
of law implies limits to the scope of legislation – it restricts it to the kind of general rules known as formal law,
and excludes legislation directly aimed at particular people and enabling the use of coercive power.
2. CLARKE
The foundations of neoliberalism go back to Adam Smith’s Wealth of Nations. Over the past two centuries,
Smith’s arguments have been formalised and developed with greater analytical rigour, but the fundamental
assumptions underpinning neoliberalism remain those proposed by Adam Smith. As Milton Friedman put it,
neoliberalism rests on the ‘elementary proposition that both parties to an economic transaction benefit from it,
provided the transaction is bilaterally voluntary and informed’ (1962, p. 55). Consequently, any restriction on the
freedom of trade will reduce well-being by denying individuals the opportunity to improve their situation.
Moreover, Smith argued, the expansion of the market permitted increasing specialisation and so the development
of the division of labour. The advantages gained through exchange were not advantages gained by one party at
the expense of another. Exchange was the means by which the advantages gained through the increased division
of labour were shared between the two parties to the exchange. The immediate implication of Smith’s argument
is that any barriers to the freedom of exchange limit the development of the division of labour and so the growth
of the wealth of the nation and the prosperity of each and every one of its citizens.
Smith’s doctrines were attacked by romantics and socialists. On the one hand, Smith’s ideal society was
one of isolated individuals, each pursuing his own self-interest (while women and children remained
dependants within the family). Smith’s ‘romantic’ critics argued that this model ignores the most distinctive
characteristics of human society – morality, religion, art and culture – which provide higher values than the
individual and elevate humanity above the animal condition of seeking immediate gratification. On the other
hand, experience soon showed that the benefits of free trade flowed overwhelmingly to the more economically
advanced and/or politically powerful party. While free trade brought prosperity to the most advanced producers,
it imposed destitution on those who were unable to compete, provoking periodic crises in which less advanced
producers were bankrupted, masses of people were thrown out of work and the trade of whole nations came to a
standstill. This experience gave rise to demands for state protection for small producers and for the national
industry of the productively less advanced countries. The market was not just an economic, but also a moral
force, penalising the idle and incompetent and rewarding the enterprising and hard-working.
Socialist critics of capitalism, since the early nineteenth century, have developed a more radical critique of
capitalism and its legitimising ideologies, based on the critique of its silent presupposition, private property.
Adam Smith’s economic agents are not just isolated individuals, they are property owners, and it is because they
are the owners of property that some have the power, embodied in legal right, to profit from the labour of others.
Socialist critiques saw the inequalities which capitalism creates not as the result of the failure of markets, but as
an expression of the unequal distribution of property, and ‘market socialists’ called for the equalisation and/or
the socialisation of private property and the organisation of production on the basis of common ownership,
sustained by the free availability of credit.
The Marxist critique - starting point was the socialist critique of private property. Marx took this one step further
by pointing out that the evils of capitalism did not derive from the unequal distribution of property, but from the
institution of private property itself. Marx argued that even if society started with an equalisation of property,
market processes would necessarily give rise to inequality and a polarisation of wealth and poverty, as money
accumulated in the hands of a minority, while the majority lost the means to earn their own living and were
forced to labour for others. Thenceforward, the minority would further accumulate their capital on the basis of
their appropriation of the unpaid labour of the majority, so that the polarisation of wealth and poverty would be
cumulative. The unequal distribution of property is not a distortion of the formal equality of the market, but is its
necessary presupposition and its inevitable consequence.
Capitalist competition is not a deus ex machina, but the expression of the constant tendency to
overproduction which presents itself as a barrier to the further accumulation of capital, a barrier which is
only overcome through the creation of new needs, the intensification of labour, the destruction of
productive capacity and the redundancy of labour on a global scale (Clarke 1994). Far from responding to
the needs of consumers, capitalism thrives on the constant creation of unsatisfied needs; far from
generalising prosperity, capitalism gener- alises want; far from relieving the burden of labour, capitalism
constantly intensifies labour, to the extent that a growing proportion of the population – the young, the
old, the infirm, those with inadequate skills – are unable to meet the demands of capital and are
condemned to destitution. The market is an instrument of ‘natural selection’ that judges not on the basis
of an individual’s ability to contribute to society, but on the basis of the individual’s ability to contribute
to the production of surplus value and the accumulation of capital. This is the moral law that is expressed
in the platitudes of neoliberalism.
Neoliberals contest Marx’s analysis of the ‘absolute general law of capitalist accumulation’ on the grounds that
the living standards of the employed population have steadily risen on the basis of capitalist accumulation,
thereby undermining the ‘pauperisation thesis’ that is often falsely attributed to Marx. However, the validity of
the law at the global level is ‘so self-evident that it would be absurd to attempt to prove it’. Even in the
metropolitan centres of accumulation the inherent tendencies of capitalist accumulation are undeniable. While
real wages may have risen, the creation of new needs by capital has meant that the socially determined
subsistence needs of the population have risen more rapidly, forcing an ever growing proportion of the
population to seek work to augment the household income in the attempt to meet those needs.
For Marx and Engels capitalism was not entirely evil. It has undoubtedly developed the productive capacity of
society to a hitherto undreamed of degree. But it has done so at enormous human (and, we can add today,
environmental) cost. the costs of capitalism are inseparable from its benefits.
Neoliberalism represents a reassertion of the fundamental beliefs of the liberal political economy that was the
dominant political ideology of the nineteenth century, above all in Britain and the United States. The liberal
model of society remained the ideal, but it was recognised that this ideal could not be attained by the power of
the market alone, which would have to be supplemented by the guiding hand of the state. Neoliberalism emerged
as an ideological response to the crisis of the ‘Keynesian welfare state’, which was precipitated by the
generalised capitalist crisis associated with the end of the postwar reconstruction boom and was brought to a
head by the escalating cost of the US war against Vietnam at the beginning of the 1970s. The economist critics
of neoliberalism have repeatedly exposed how restrictive and unrealistic are the assumptions on which the
neoliberal model is based. However, to argue that the neoliberal model is unrealistic is somewhat to miss the
point, since the neoliberal model does not purport so much to describe the world as it is, but the world as it
should be.
3. GABMLE
By the end of the 1990s the triumphalism of US capitalism was back at full volume and neo-liberalism had
become the dominant ideology of the new world order proclaimed by the Americans and also of the discourse of
globalisation. Many now argued against the idea of national capitalisms, in favour of analysing capitalism as a
global system of accumulation. One important issue concerns the relative weight to be given to capital in general
as against particular capitals or fractions of capital. Many of the analyses of neo-liberalism as irrational have
looked at national capitalisms and particular sectors, such as industrial capital. But looking at capitalism as a
global system of accumulation and at capital in general, the rationality of neo-liberalism as a political and
economic strategy in a period of restructuring is more apparent. Neo-liberalism gives priority to capital as money
rather than capital as production. In a period of rapid restructuring this has the advantage of enabling policies to
be adopted which clear the decks, removing subsidies and protection, and freeing up capital from fixed positions.
It allows capital to regain mobility, dissolving the spatial and institutional rigidities in which it had become
encased
The priority of monetarism was to make sound money once more the cornerstone of economic policy, and to
give up the Keynesian objectives of full employment and economic growth. The real significance of monetarism
was political. As Hayek noted, the key issue was to recognise that inflation was not a matter of technical error,
but of the political balance of power. If governments committed themselves to policies of full employment it
meant a significant weakening of the normal capitalist disciplines of bankruptcy and unemployment and a huge
increase in the bargaining power of organised labour, particularly over wages.The neo-liberal analysis was that
this had led to the progressive extension of state intervention over the market economy in the form of wage and
price controls, and the development of corporatist modes of governance for the economy.
One argument against neo-liberalism is that capitalism needs democratic legitimacy if is to survive, and that
welfare programmes are part of the ransom capital has to pay in order to be protected. Neo-liberalism is still by
itself not very good at winning electoral support. But a number of politicians have been adroit either at
combining the neo-liberal economic programme with conservative policies which do appeal to particular
interests and groups, or at recasting the neo-liberal economic policies in ways that resonate as popular
commonsense. The authoritarian populism of Thatcher and Reagan were two such successful employments of
neo-liberalism by politicians on the right. In the 1990ss the revival of the United States economy appeared to
reinforce the neo-liberal message. Neo- liberalism became assimilated with globalisation and the policies of
international agencies such as the IMF and World Bank pushing neo-liberal agendas.
4. BONEFELD (2012) – Smith and Ordoliberalism

I argue that for Smith, market freedom not only presupposes the political state. It is in fact premised on the state
as its political authority – Adam Smith provided a political economy. The question of political economy is
therefore not whether the state intervenes or not, rather the question is about the purpose and method of
intervention. I argue that for Smith, the state is the political form of the invisible hand. That is, the
economy has no independent existence. Rather, it is a practice of government. In distinction to Watson, this
practice extends to the facilita- tion of the moral sentiments as the ethical framework of a society governed by
the free price mechanism, seeking to hold it together.
Conventionally, contemporary neoliberalism is associated with an unfettered economic system,

particularly finance, and it is seen as a political economy of free economy and a weak state.This conception
of the neoliberal state is held up even when it is argued that it is a powerful enforcer of particularly deregulated
and flexible labour markets. Nevertheless, the crisis of 2008 is said to have brought the state back in as the
decisive actor, placing regulatory restrains on the economy to resolve economic crisis and restore
economy.The resurgence of the state is said to have led ‘a more orderly, restrained form of market rule’,
in which the economy is ‘subject to controls’.It is also argued that this reassertion of state power is a clear
indication that ordoliberalism is now ‘back in favour’ as a political means of crisis resolution,one that socialises
the losses by means of ‘financial socialism’, one that balances the books by a politics of austerity, and one that,
as Jesse Norman explains, seeks resolution of the social crisis by putting in place a new moral framework to
secure free economy in the self-responsible behaviour of individuals.
I argue that Adam Smith did not provide an economic theory. He analysed the political economy of what he
called commercial society, and conceived of the state as its political force. For Smith, the state is the authority
that renders viable commercial society by securing its moral, social, legal, and, also its economic order. The
ordoliberals reasserted the political form of free economy as the means of restoring and maintaining liberal
economy in the eye of the storm.
This article argues that for the ordoliberals, economic regulation by the invisible hand amounts to a constantly
renewed authoritative decision for market freedom. The ordoliberal state is an ever watchful one. Although their
conception of free economy and strong state does not depart from, in fact, they expound, the Smithean purpose
of the liberal state as the political facilitator of the invisible hand, they develop it beyond itself. That is to say,
while Smith developed his political economy as a social theory of commercial society, establishing the rational
foundations of the liberal state, the neoliberals transformed it into a theology of the strong state. Rather than
deriving the veracity of liberty from the development of the division of labour, they assert its veracity as political
practice of strong state authority. Liberty thus becomes a political decision, which as Hayek explains in The
Road to Serfdom, one has to make in the face of the collectivist demands for a ‘freedom from want’.
Hayek focused this insight succinctly when he argued that for the free economy, the liberal state is
indispensable as a ‘planner for competition’. forming their own private interests into a matter of public
policy. The state thus has to be strong to prevent itself from becoming the prey of the social interests. For the
sake of liberty the state has thus to keep the social forces at arm’s length so that they do not govern through the
state. The liberal state has to govern over them. The limited state is the strong state.
In sum, ordoliberalism asserts the authority of the state as the political force of free economy. Freedom is
freedom within the framework of order, and order is a matter of political authority. Only on the basis of order
can economic freedom flourish, and a free people be trusted to adjust to the price mechanism in the entirely self-
responsible manner of the rule abiding and ever so innovative entrepreneur. For the ordoliberals, the task of
sustaining market liberty on the basis of the rule of law is not enough. Fundamentally, market behaviour needs to
be embedded into the ‘psycho-moral forces’ of society, containing the proletarianisation of workers, restraining
the ‘greedy self-seekers’, and ingraining the discipline of self- responsible enterprise into the moral fabric of
society.
The difference between the ordoliberals and Smith is that unlike Smith, the ordoliberals do not provide a social
theory of capitalist social relations. They demand strong state action as the means of liberty in the face of a
manifest crisis of political economy. Their stance expresses the theology of liberalism – they demand strong state
authority as a means of asserting the veracity of market liberty. Smith, in contrast, does not even utter the word
‘liberalism’. There was no such system to defend. His theory of the common wealth based on invisible principles
of market freedom and of the state as the means of rendering effective the system of perfect liberty ridding it
from impediments, looked forward to a world that still had to be born.
The political response to the crisis of 2008 – financial socialism for the few and austerity for the many –
illustrates well the practical meaning of Marx’s notion of the state as the executive committee of the bourgeoisie.
This notion reveals the liberal truth of the capitalist state. Smith’s political theory and the ordoliberal call to arms
expound with great clarity its character as the political form of bourgeois society. The capitalist state is neither
independent from the economy nor does it derive from it. The economic has no independent existence. It is a
practice of government. The state, says Milton Friedman, provides for the ‘organisation of economy activity’.
5. Max Weber
The modern state is defined sociologically in terms of specific means which is peculiar. To the state – physical
violence – Every state is founded on force – Trotsky. If social formations without knowing violence as a means,
then the concept of the state would have disappeared – anarchy. Not the sole means, but it is specific to the state.
The state is a relationship of rule by human beings over human beings, and one that rests on the legitimate use of
violence – which is held to be legitimate. (against Hayek).
For the state to resist, these who are ruled must submit to the authority claimed by whoever rules at any given
time. Legitimating rule – authority of the eternal past of custom -traditional rule; authority of the exceptional –
charisma, the entirely personal devotion to and personal trust in revelations; rule by virtue of legality.
Although the monopoly of the legitimate use of physical force constitutes one key element in the "individual"
ideal-type of the modem state, Weber does not say anything about the purposes/ends for which force is utilised.
Indeed, the modem state's monopoly of the legitimate use of physical force can be employed for the most diverse
ends ranging from the oppression of a minority group within the boundaries of the modern state to protecting the
human rights of its citizens. The modern state exists only as a series of individual actions with particular
subjective meanings. :Moreover, laws in the modem state are deemed valid simply because they have the
sanction of law.
Of decisive importance also is that Weber's identification of political responsibility with a leader's
readiness to utilise violence to serve the "cause" of promoting the "power- political interests" of the
German nation-state is, in my view, absolutely invalid in the late twentieth century. Because "all" of
mankind is now compelled to live in the shadow of atomic annihilation, a most extreme use of violence to
promote the interests of national power, as in the case of war, can only be deemed utterly irresponsible. In
this regard, Aron suggests that "responsible" effective leadership in the nuclear age can only advocate a
strategy of deterrence. A "responsible" leader's goal is the prevention of war, not victory. In other words,
"it is on the fear of atomic apocalypse that we must base our hope that the directors of the great powers
will be wise"
6. SCHMITT
Carl Schmitt was the legal philosopher of German Nazism. He rejected the idea that the people are sovereign as
a dishonest insinuation, and rejected the idea that the liberal rule of law is sovereign. He declared that sovereign
is who declares the state of emergency. For Schmitt, politics is defined by the relation between friend and foe:
democracy has no conception of the political and the rule of law is powerless to defend itself when the going
gets tough. The power to stop people running towards the exit, and indeed maintain liberal markets, is the state.
1) What does Schmitt's concept of the political entail?

2) Schmitt's notion of the strong and capable state formulates the neo-liberal insistence of the free economy from
the political point of view.
Theoretician of political decisionism - when things go bad the rule doesn t apply, because it doesn’t apply to
chaos, but to order.
Schmit - a liberal? - Authoritarian liberalism
Hayek - despite his conduct in the Hitler regime, his work is still the most learnt as perspective on the state and
the dangers that the mass democracies brings to the state. Accept that totalitarianism belongs to liberty, Law does
need to be abstract, formal, non-directive and not substantial and Schmmit’s definition of sovereignty (state of
emergency) to suspend the liberal rule of law - is entirely plausible.
State of pure quantity - the socialist state, the welfare state, of unlimited democracy, that can do everything for
everybody, there is nothing that the state doesn’t do, a state of responsibility
State of pure quality - has succeeded in depoliticising society, in monopolising the politics, in ruling of the social
interests out of the state, succeeded to govern independently from society.
The state needs to free itself

Two types of dictatorship can occur
• Commissariat dictatorship - the dictator removes all the democratic features and the army is on the streets
and the rule of law comes back when it is order and his authority is recognised.
• Sovereign dictatorship - suspends the present constitution and re-writes it.
Society is divided between friends and force. Friends - those who are not the enemy.
Politics- the values for which you fight. You need to know the stranger to our values, who opposes them and
then remove it.
Sovereignty not the rule of law, but the one that decides on the state of emergency.
Democracy - possibly only on the basis of a fundamental consensus between rulers and ruled - possible only as a
democracy of friends, not as a democracy that is tolerant towards the enemy. any such tolerance towards the
enemy - lets him in, weakens the state.
Only the strong state has the power and the ability to tolerate the enemy. The weak state does not have this
capacity.
Schmit - the state doesn t lose its independence - the strong state is to acquire for liberty for depoliticised
economy, for the recognition of property rights and the conduct of the rule of law. In order times when law
apply, everything is like this. If the state is conquered by the masses - then the pursuit of the liberal rule of law
cannot be guaranteed anymore - this is when the rule of law is suspended by the power of democracy- a dictator
must come into force. Suspends the rule of law in order to have peace returned (but this through violence).
Critic of the liberalisation of state, of mass-democracy.

He rejects liberalism because it has no values to defend – laissez-fair is not a concept that should be applied to
the state, but tot the economy.
He rejects Weber s view of state as a machine. The state is not an administrative process - reducing it to that, you
open the door to demagogs.
The enchanter - the right ruler - the orator - such as Hitler.
Reassert the state as the power that is able to eliminate all kinds of social conflict - might be needed to organise
conflict - but not conducted by the society, but by the Fuhrer. Liberty survives if there is this person who can
organise social conflict, conducted by the state in order to identify and prosecute the enemy and through this
identify the rest as national friends. the dictator governs either through the rule of law or by suspending it.
The rule of Law
It is not a universal value. It is the legal institution of particular social interests over other, a form of domination
of one group of men over another. If the rule of law is abstract, the people will fill it with the meaning
Political liberalism is delusionte because it cannot understand this feature.
Friends - enemy - the struggle on what the rule of law wants - it legitimise a certain form of historical
domination.
Not a natural occurrence, not a divine intervention - to be effective, it needs to be authoritarian. Authoritarian
elimination of doubt - nobody can be left in any doubt about what it does and doesn’t permit.
The authoritarian elimination of doubt is true because it has been implemented - the doubter dies, or if it
survives, it will be as faithful as the rest.
The rule of domination, if denied - rule of thinking = positivists. If understood as the normative expression of the
friends = we know what to do, we can get the policy makers against the enemies.
The sovereign
The state fragments, decomponses - it is the capture of the various social interests - political, social, economic.
This state needs to be ruled out of the society, to have the capacity to separate itself from the social interests -
the elimination of the social conflict is the social conflict conducted by the state through violence and
eliminating the enemy.
Against laissez-faire, but pro free economy - basically because the state is so strong, the economy cannot
do everything politically speaking, it cannot choose its influence on the state and the society,. In his view,
the economy is legitimate to do everything in its area, but not its effects on the society and state is still
controlled because of states’ force on everything. so it s definitely not a laissez faire.
Quantitative - weak state because its power is dispersed everywhere and it does not concentrate on a small
sphere enforcing full control and qualitative power - control only on the politics, so strong because it
concentrates everything there and can control how the other spheres influence his sphere!! Important to make the
distinction for the exam
Strong state is depoliticising the society to have control on it, while it politicises the state to get the power.
Renato CRISTI – Strong state and sound economy
State is something political and a strong state is, in a particularly intensive way, a political formation. Only a
strong state can remove itself from non state affairs -> depoliticization and the creation of state-free sphere is a
political process.
Dangers to strong state – a strong opposition has been launched to discredit and defame it – it is a practical and
indispensable instrument of a strong government. As soon as a genuine courage to action is exhibited and a
strong state really steps forward, the resistance is formed by the ones interested in the status quo -> factions.
Lessons of the Leipzig trial – if something like this happens, then no strong state. The leadership methods, the
management of the relations between state and economy -> not viable for a strong state. Solution: elimination of
politics and the state – All matters decided by technical and economic experts according to objective,
technological and economic points of view.
Depoliticization – politically useful in deferring unpleasant problems and necessary changes through allowing
any resolute will to exhaust itself. After this – all problems might be political -> Germany – politicization of all
economic, cultural, religious and human existence. Economic – entirely politicized – formula of the total state.
Every state – anxious to acquire all power for domination -> a real state – the one which does. Expanded power
– by technological means, by the techno-military instrument of power. This give small states power and effective
possibilities to control -> a state is forced to acquire modern weaponry – if not, another force will do so and it
will become the state -> proliferation of technical means – propaganda – more effective than media to influence
public opinion.
The total state - describes the contemporary states undreamt of new means of coercion and possibilities of the
greatest intensity. It is especially the strong state, it is total in terms of quality and energy. Fascists – stato
totalitario – the new powers of coercion belong exclusively to the state and promote its escalation of power – not
allow enemy forces – can discern between friends and enemies – every true state is a total state – importance of
new technological power whose political meaning one should acknowledge.
German state as total state – penetrates all domains and all spheres of human existence, no state – free sphere
because it can no longer discriminate – there is nothing not related to the state – totality in the sense of volume
(quantitative, not qualitative). – total due to weakness and lack of resistance against enemies. Its expansion –
consequence not of its strength, but of weakness.
This condition is resulted from a plurality of total parties – each party forms its total members – their technique
is the only correct one. The drive towards total politicization – inescapable. Expansion of the state in all
directions.
A strong organized plural party system – sits between the state and gov and mass citizens – manipulates the
monopoly of politics. Main tool for this monopoly – the nomination of the list of candidates. Elections become
mediates statements that voters address to a party organization. People choosing from diff existing systems that
shape the options themselves. There is no election of a free candidate representing the common interest of the
state. It is the partisan that know how to control the ballot.
Only a very strong state would be able to dissolve this – not through an organics process of slow growth.
Depoliticization – the segregation of the state from the non state sphere. First requirement – distinction, not
separation between state and non state. Dirst – the state be a state again, bureaucracy – not a political interest of
aims of parties. If bureaucracy and the armed forces are undisturbed – strong states. No meaningful universal
electoral rights without a necessary corresponding universal military service.
Economy – the economic sphere of the state – genuine state privilege. 1. Certain activities of an economic nature
belong to the state, commercial entitlements – like postal entitlement – legitimate state entreprise. Monopolies
are distinguished from the rest. 2. Sphere of pure privacy, free, individual entrepreneurs. 3. Intermediate non-
state, but still public sphere.
=> economic autonomous administration – distinction between state and public sphere. NOT ec. Democracy –
mixture of ec and politics wanting to acquire ec power within the state through means of political power and
increasing political power through economic power.
In total state – aims at distinction and separation – economic sphere belonging to public interests and not
separate from it. Monopolies of every kind chartered in the public institutions but administered autonomously by
commercial agents. State = economic agent – legal perspective – should it require a commercial privilege, it
should use it openly and not combine it with any private forms. – autonomous economic administration.
To achieve this – solid authoritarian foundation through new arrangements and institutions – a second chamber –
state council, state ec council combination – if contradictory interests – the chamber dissolves – a way of
strengthening a state that is not strong enough and lacks authority. However no second chamber is possible
without a strong state. The gov – through all constitutional means – establish immediate contact with the real
social forces of the people. Authority stems only from success and achievement.
BENDERSKY (1983) - The state is the decisive political entity, according to Schmitt, because to it alone
belongs the jus belli. No other entity within society can determine the enemy and none has the means to conduct
an armed struggle against that enemy, that is, to wage war. Only the state can require the ultimate sacrifice and
" . . . demand from its own members the readiness to die and unhesitatingly to kill enemies." By virtue of this
power the state transcends all other social and political entities. But this does not mean that the state is an
authoritarian or totalitarian entity, or that the state determines " . . . every aspect of a person's life or that a
centralized system should destroy every other organization or corporation." Competing social groups, political
as sociations, and parties can exist within a state so long as they do not seriously endanger the established
political and legal order.
The primary function of the state is neither to wage war nor to control the lives of its citizens; its
purpose is "to create tranquillity, security, and order. . . ." 26 Within a sta ble state legal norms and laws
prevail because the state can guarantee a normal situation and assure that domestic friend- enemy
antagonisms do not reach the level of armed strug gle. But in extreme cases the state must decide upon
the Staatsfeind (domestic enemy). Any group which seriously threatens domesticpeace or theexistence
ofthe state must, out of necessity, be declared a Staatsfeind. Here Schmitt had in mind only those
groups which seek the destruction of the existing system, or those groups which in their conflicts with
other groups threaten to cast the nation into domestic turmoil.
For him, politics was a conflict between organized groups within a state and be tween sovereign states
on the international scene. Central to his entire theoretical framework, as well as to his ap proach to
the politics of Weimar, was the state. Only the state could protect its citizens from foreign enemies and
maintain domestic order, peace, and stability. In pursuit of this goal the state must be able, in times of
crisis, to intervene in different areas of society, because no sphere is immune from potential political
conflict. Attempts by liberals to separate religion, culture, economics, and law from politics were
considered by Schmitt to be unrealistic. When necessity so warrants, the state must either intervene to
counteract an enemy or the state will abrogate its sov ereignty.29 In the years that followed, Schmitt
would argue repeatedly that the survival of Weimar would depend upon the ability and willingness of
the German state to distinguish the friend from the enemy and to react accordingly.
HELLER (2015) - Carl Schmitt, however, on the basis of an altogether audacious logic, seeks to present the
state of exception as the true and proper ordinary state, and to espouse the permanent autocratic dictatorship,
unrestricted to emergencies, as the true democracy. Basically, he recognises only a single ‘authoritarian’ state,
namely the fascist dictatorship as epitomised by Mussolini, which in its ‘ancient simplicity’ imposes on the
whole of political life the will of one man. For the ‘greater glory’ of this ‘authoritarian’ state, all institutions
and ideas of constitutional democracy need to be stripped of their authority.
For a start, the ‘authoritarian’ state is characterised by its retreat from economic production and distribution.
Papen, however, would not be the representative fighter for the ‘authoritarian’ state if he were not
simultaneously fighting against the ‘welfare state’. Presumably this does not mean abstinence on the part of the
state where subsidising large banks, large industry and large agricultural enterprises is concerned. Rather, it
means the authoritarian dismantling of social policy.
BONEFELD (2006) - This article explores Walter Benjamin’s insight according to which the tradition of
the oppressed teaches us that the ‘State of emergency’ is not the exception but the rule. The liberal state tradition,
and not just its authoritarian wing, understands this well and does indeed conceive of the state as the executive
committee of the bourgeoisie. The neo-liberal conception of laissez-faire does not extend to the state. Laissez-
faire is no response to riots. That is to say, neo-liberalism does not view dictatorship as the opposite to the liberal
democratic state but sees it instead as a means that safeguards the ends of the rule of law in the face of
democratic pressures.
Democracy, as Schmitt saw it, depends on the fundamental homogeneity between rulers and ruled. It is, as it
were, possible only on the condition that it is a democracy of ‘friends’. The materialisation of the working class
as mass democratic subject disrupted this homogeneity and allowed entrench- ment of the (class) enemy within
the institution that was to codify and regulate its subordination to capital. Schmitt argued that the (Weimar) state
had become the prey of antagonistic social interests, requiring the ‘friends’ to reassert the independence of the
state from society by means of emergency rule. His demand for ‘free economy and the strong state’ was the
demand of neo-liberalism. That is to say ‘the government beyond its proper sphere ought not to have any power;
within its sphere it cannot have enough of it’.Like Schmitt, the neo-liberals of the late 1920s and early 1930s
criticised ‘classical liberalism’ for failing in the face of the proletarian threat. Laissez-faire is no ‘answer to
riots’.
The neo-liberal demand for the strong state is a demand for the limited state. It intervenes into society, not to
25
effect redistribution, but to eliminate ‘private power from the economy’. As Hayek saw it, the liberal state
intervenes in an attempt to facilitate competition or, in the words of Friedman, to ‘determine, arbitrate and
enforce the rules of the game’. The neo-liberal state governs by ‘‘‘planning’’ for the free price mechanism’, as
Balogh put it in his assessment of neo-liberal reforms in postwar Germany. In contrast, the weak state does not
stand over and above society. Instead, it is drawn into society and has become the prey of antagonistic social
interests. The ‘socialisation’ of the state undermines its independence and thus imperils its bourgeois character.
Against this background, Martin Wolf has argued that the success of globalization requires stronger states. In its
substance, Wolf ’s call for stronger states to facilitate the operation of the free market amounts to a pre-emptive
counter-revolution against the anticipated rebellion. The dynamic of the new economy was sustained by three
elements: the enormous increase in consumer debt, especially in the USA, a huge transfer of resources in the
form of interest payments from debtor countries to Western banks, especially to US banks, and military
Keynesianism*increased war spending*that subsidised the military-industrial complex and sustained the credit-
based boom of the 1990s on a global scale.Conversely, then, of Wolf’s demand for action is a world economy
that is dependent upon, and overshadowed by, a mountain of debt. Debt entails a politics of debt, and Wolf’s
insistence that the free economy and the strong state belong together is therefore to the point. The premise of a
politics of debt is the ongoing accumulation of ‘human machines’ on the pyramids of accumulation. Its blind
eagerness for plunder requires organized coercive force to sustain the huge mortgage on the future exploitation
of labour in the present.
RASCH - It is the latter pluralism of functionally dif- ferentiated social systems that seems to have carried the
day, thus it is against this species of pluralism that Schmitt wages his political war – not because he opposes
pluralism, but because the pluralism of associations, in his view, is a sham pluralism. Simply and succinctly put,
Schmitt sees in early 20th-century, Anglo-American, liberal pluralism an underlying universal monism, an
extremely dangerous ideology of ‘humanity’ that leaves both the dissenting group and the dissenting indiviual
dehumanized and defenseless. His solution is to rehabilitate the monism of state sovereignty in order to
guarantee a greater pluralism, an international pluralism of autonomous unities that refuse to be subsumed under
the legal or economic supremacy of a particular instance (the United States, say) that has authorized itself to be
the privileged carrier of the omnipotent and universal moral principle. The sovereignty of the state, as the carrier
of difference, enables the arena of this larger pluralism in which the political is to be found.
for Schmitt, sovereignty is the linchpin that holds this structure in place. The unity of the state which is
guaranteed by a supra- legal and personified notion of sovereignty enables the plurality of the world, and thus
enables politics. The irony is not lost on us. If politics is marked by the friend/enemy distinction, then within the
state, politics is not possible. Internal conflict can only be seen as civil war, a war designed to undermine
sovereignty and thus designed to undermine the structure of politics that the ‘pillar’ of the state supports.
Schmitt’s logic starts with a simple presupposition: what is to be avoided is the hegemony of a single system.
As he puts it, ‘As long as a state exists, there will thus always be in the world more than just one state. A world
state which embraces the entire globe and all of humanity cannot exist’. ut his state is no microcosm of the
world; there is no self- similarity, no internal replication of the differentiation required on the international
scene. From a perspective that represents itself as liberal and democratic, this homogenization and pacification of
the state is the great flaw of Schmitt’s grand design. He postulates the necessity of two levels, one ‘domestic’ (or
internal to the state) and the other ‘foreign’ (or inter-statal), and assumes that politics can only exist on the higher
level, that a unifor- mity and suppression of politics must exist within the state for politics to exist anywhere at
all. Schmitt could not see a structure of differentiation carried by a unity that itself was structured by
differentiation. This, then, becomes our challenge. If we accept conflict as the basic definition of politics, and if
we take the claim seriously that the old European system of delimited warfare represents ‘the highest form of
order of which humans are capable’ – if, in other words, emergent order trumps planning – then it becomes
necessary to extend his ‘logic’ of conflict, to ‘re-enter’ his friend/enemy distinction within the state, without
thereby collapsing the grander structure he outlines.
7. LENIN
This seminar discusses Lenin's State and Revolution, which is the classical text of the orthodox Marxist tradition
associated with communist parties and social-democracy. Lenin sees the state as an instrument of class rule. In
distinction, the critical Marxist tradition does not see the state as an instrument of class rule. It sees it as the
political form of definite social relations.
1) What in your view is the Leninist conception of the state?

2) What do you think is the decisive distinction between the Leninist conception of the state and the notion that
the state is the political form of society.
In short, Marxism considers that the loyalty based on class in the most important one. Starting from this idea,
Marx stated that the common values of the proletariat (basically meaning industrial workers from the end of the
nineteenth century) are far stronger than other values like religion, nationality or ethnicity.
In response to the failure of the Marxist theory to explain World War One, Lenin invented the imperialistic
theory. German workers were able to fight French workers because they betrayed the ideal of the Communist
revolution. They did it because they become corrupted by the capitalist owners. The rich people from the great
European powers were able to pay their workers better, to offer them pensions, medical treatment or basic
education because the major European states exploited the poor countries (remember that the European states
held great colonial empires all over the world). In this process, the workers from rich countries were no longer
exploited but became accomplices of the “evil capitalists”. They become themselves the exploiters.
Marxism claimed that the Communist revolution would appear in rich countries, because there the gap between
rich and poor is the greatest. From Marx’s perspective, this was a scientific causality. Leninism observed that
Marx was wrong and outdated (The Communist Manifesto was written in 1848, Leninism appeared after 1917).
The revolution will come in poor countries like Russia because the fight is no longer between the great
proletariat and the exploiting capitalist class, but between rich countries (that want to take advantage of week
countries) and poor countries (that fight for their freedom). In order to gain the Revolutionary conscience and not
be corrupted, the proletariat need to be led by a strong Communist party that will guide them until the people are
ready. Only the party leader know when that objective is obtained, a belief that encouraged dictatorship and
totalitarianism.
Finally, another major difference is related to the relation of the two paradigms with violence. Classical Marxism
is very ambiguous regarding the use of violence when the Communist Revolution will come. Marx was inspired
by Darwin and believed that history evolves like biological species. As a consequence of that, he considered that
his theory is scientific and amoral. The proletariat should make the revolution and create Communism not
because they have the moral right to do so (actually, Marx praised Capitalism as a far better system than
Feudalism, and Communism as a normal evolution from Capitalism), but because the objective laws of a
scientific economic history dictates this outcome. From his perspective, capitalist owners are not necessary bad
people, the system is broken. If a capitalist tried to provide better conditions for the workers, he would be
eliminated by the competition. However, he considered that the Communist system is far more efficient than the
Capitalist one because it was the result of evolution. The consequence of the clash is inevitable because history is
not decided by individuals or states, but by scientific objective laws (in that sense, Marx was a predecessor of
today’s scientism, a current of thinkers that believes blindly in the infinite power of science to explain and
understand everything). Because these objective laws are not bad or good, we cannot say for sure if the
proletariat should use violence or not in the revolution. They might have to do it if they are put in that position.
In contrast with Marxism, Lenin believed that there was no objective laws of history. The Communist
Revolution might never happen. The only way to obtain the ideals of the revolution is to actively fight for it by
using any means. He explicitly encouraged mass violence. Lenin is famous for saying that the wars between
armies and soldiers are just sports. The Soviet leader encouraged total war by implicating the whole population
and using methods of extermination: “We would be deceiving both ourselves and the people if we concealed
from the masses the necessity of a desperate, bloody war of extermination, as the immediate task of the coming
revolutionary action.”
FAULKNER, 2012
1. ‘Special bodies of armed men’
When Lenin talks about the state, he is not thinking of schools, welfare benefits, and plans for new roads. These
are matters of collective social administration that would be necessary whatever kind of society we lived in.
What he has in mind are the core functions of the state associated with the bureaucracy, the police, the judiciary,
the prisons, and the armed forces. He is thinking of the repressive ‘law and order’ functions of the state.He is
right – and follows Marx and Engels in this respect – in seeing this as the ‘essence’ of the state. Many
19th century states in fact consisted of little more than this: taxes were low, there was no welfare provision, and
virtually the entire government budget was spent on the army.It is still the case that grotesque amounts of wealth
are wasted on weapons and war, and that the role of the state in suppressing protest at home and protecting
‘national interests’ abroad remains paramount. Look at current events in Greece, Syria, and Gaza. Who can
doubt that in these cases the irreducible core functions of the state are performed by ‘special armed bodies’
acting in the interests of bankers, dictators, and imperialists? And there are countless other examples from the
last century of revolutionary crises which have exposed the state – reduced to its essential core functions – as a
conservative, hierarchical, military-type institution that provides the ruling class with its last line of defence
against radical popular movements.
2. ‘The irreconcilability of class contradictions’
What makes the state necessary is the division of society into antagonistic social classes. Were society equal,
democratic, and co-operative in character, there would be no need for coercion. More precisely, were the
working majority not exploited and liable to revolt, it would be unnecessary for the ruling class to create ‘special
armed bodies’ to protect its property and power.
Lenin bases this part of his analysis on Engels’ Origins of the Family, Private Property, and the State. Engels
argues that no state existed in early human societies precisely because they were based on co-operative labour,
collective ownership, and equal shares. The appearance of the state amounts to ‘the admission that this society
has become hopelessly entangled in an insoluble contradiction with itself’. Engels is referring here to the
existence of ‘classes with conflicting economic interests’. The role of the state is to contain the conflict and
ensure that it does not transgress ‘the bounds of order’.
But the state, while in a sense ‘standing above society’, is not, and never can be, neutral. There are two reasons
for this. First, precisely because the state’s social role is to maintain ‘order’, it is by definition an apparatus for
defending the existing order – not some hypothetical socialist order of the future. Second, the class which owns
society’s wealth invariably also controls the state – irrespective of whether it is a police dictatorship or a
parliamentary democracy.
Here Lenin makes his own contribution. Marx seems to have believed that revolution may have been
possible without smashing the existing state in countries with parliamentary democracies. Lenin rejects this (and
he seems to have written State and Revolution in part to clarify the matter in his own mind). He extends Marx’s
characterisation of the state as ‘the national war-engine of capital against labour’ to all forms of the capitalist
state. Why did Lenin consider this updating of Marxist theory necessary?
‘Democratic’ states like Britain and France were full participants in imperialism, the arms race, and the world
war. Their parliaments were deliberative only, with representation based on occasional elections, and without
any effective mechanism of accountability in the interim. Real power, in any case, lay elsewhere: in the various
executive arms of the state – the cabinet, the ministries, the police, the judiciary, and the army. These were
organised hierarchically, with power concentrated in the hands of highly paid politicians, bureaucrats, police
chiefs, judges, and military top brass; men (almost exclusively so in Lenin’s time) who were either recruited
from the ruling class or quickly inducted into it once elevated to senior posts.
3. ‘The dictatorship of the proletariat’
The Paris Commune of 1871 revealed one of the most important secrets of working-class revolution: that it
necessarily involves the smashing of ‘the bureaucratic-military machine’.But this did not mean that the state as
such was immediately abolished. On the contrary: power passed from one form of state to another, from the
capitalist state to what Marx called ‘the dictatorship of the proletariat’.
The phrase is unfortunate: we nowadays associate dictatorship with repression, secret police, and violations of
human rights. But Marx was engaged in a polemic with anarchists who believed that all forms of the state could
simply be abolished overnight in favour of ‘federalism’ (a network of self-governing communes). This, he
argued, was madness, for revolution in fact involved centralised, coercive power – centralised because the
radical energy of the masses had to be organised to defeat the concentrated power of capital, the state, and the
ruling class; and coercive because the aim was the forcible suppression of one class (the minority) by another
(the majority).
Both to seize power in the first place and then to hold onto it during a necessarily protracted period of social
transition, the workers would need their own state power. It would be an organisation of the overwhelming
majority, internally democratic, based on mass participation; but it would have to be both centralised and
coercive in relation to class enemies. Anything else would be the height of irresponsibility.
4. ‘A new and truly democratic state power’
Lenin asks a simple question: ‘By what is the smashed state machine to be replaced?’ To this question he gives
two answers. First he draws on Marx’s description of the Commune in The Civil War in France. The Commune
abolished both the regular army and the parliamentary system. It replaced them with a city-wide network of
popular assemblies and a democratic militia of the entire working population organised on a neighbourhood
basis. All officials were elected, received average wages, and were directly accountable and subject to instant
recall and replacement.
But then Lenin drew on his own experience of the 1905 and 1917 revolutions in Russia, arguing that the
workers’, soldiers’, and peasants’ soviets embodied the same principles. He counterposed this form of mass
participatory democracy to the parliamentary ‘pig-sty’ represented by the Provisional Government.
Because both Commune and soviets were embedded in popular mass movements, they were both
deliberative and executive bodies. Whereas bourgeois parliaments were mere talking-shops – such that the
executive arms of the state were effectively insulated from democratic control – the workers’ state was
characterised by unity of decision and action.
5. ‘The withering away of the state’
State and Revolution is a polemic directed against both reformists and anarchists. Reformists stand condemned
for wanting to preserve the existing state, making them, regardless of their intentions, opponents of revolutionary
change in practice. Anarchists stand condemned for wanting to destroy all forms of the state immediately – at the
expense of the needs of revolutionary self-defence in the transitional period. But Lenin is closer to the anarchists
than to the reformists, for he too wishes to destroy the capitalist state immediately, and all forms of the state
eventually.‘Eventually’ means: when the old order has been swept away beyond hope of recovery; when the new
socialist system is wholly secure; when a society of co-operative producers, organised democratically and with
equal rights and opportunities for all, has come into existence.
At this point, argues Lenin (following Marx), a further transition becomes possible: that from a society based on
the principle ‘to each according to their ability’ to one based on the far more radical principle ‘to each according
to their need’. People are different from one another, and their contributions to society are variable.
Consequently, to distribute rewards ‘according to ability’ precludes true equality. This becomes possible only at
a higher stage of human social development, when each person’s work is subsumed within the collective
productive effort of society as a whole, and each draws from a common pool ‘according to need’. Thus would
the social conditions finally arise for the complete ‘withering away of the state’
Lenin begins by establishing quickly that the state is a body that arises out of the “irreconcilability of class
antagonisms”. It is set of institutions that monitors, controls and enforces the rule of one class over another so
that it can ensure order all the better to continue exploiting us. He points out that,ultimately, the state is about
soldiers, the police, prisons and courts, Anyone watching the ferocious counter- revolution going on in Egypt at
the moment can see that Lenin is not making this stuff up.
However, Lenin’s argument goes further. These special armed bodies are crucial he says but the state is more
than these. Following Marx in The Communist Manifesto, Lenin argues that the state is a committee for sorting
out the affairs of the whole ruling class. Whole is the key word here. Lenin pulls out the subtlety of Marx’s
analysis by pointing out that the ruing elites in society are seldom at one on which direction to go. Debates about
Europe now are a good example of this with the ruling class split over staying in. These arguments between
those in power can turn nasty. The state therefore has to try and hold, sometimes warring factions and groupings,
together. To fail to do so would be disastrous for those in power as their squabbles might go too far because their
economic and political interests often diverge. Ruing class splits frequently open up space for insurgency from
below. This is something that the state wants to avoid and therefore mediates between factions within the ruling
class.
At the root of Leninist authoritarianism was a distrust of spontaneity, a conviction that historical events, if left to
themselves, would not bring the desired outcome—i.e., the coming into being of a socialist society. Lenin was
not at all convinced, for instance, that the workers would inevitably acquire the proper revolutionary and class
consciousness of the communist elite; he was instead afraid that they would be content with the gains in living
and working conditions obtained through trade-union activity. In this, Leninism differed from
traditional Marxism, which predicted that material conditions would suffice to make workers conscious of the
need for revolution. For Lenin, then, the communist elite—the “workers’ vanguard”—was more than a catalytic
agent that precipitated events along their inevitable course; it was an indispensable element.
Finally his pamphlet introduced a new element to the Communist ideology. That is, the Communist society will
develop in two stages. In the first one, sometimes called socialism as distinguished from Communism, the
ownership of the means of production by the whole people will have abolished exploitation.
In this stage, the principle ‘From each according to his ability, to each according to his work’ shall prevail. In the
next stage, however, since the classless society emerges there is hardly any need of a repressive instrument and
thus full justice would prevail, wherein the principle is ‘From each according to his ability, to each according to
his needs’.
RYAN (2007) - Building on certain key works on Lenin and his thought, both recent and not so
recent, it demonstrates that the apparently large disparity between The State and Revolution and
Lenin’s years in power in the Soviet Union is, in fact, quite false. It is to be argued here that Lenin, in
fact, envisaged a ‘dictatorship of the proletariat’ not far removed from the violent and oppressive
regime that emerged in Soviet Russia during his years in power. Lenin is to be understood as a
complex theorist, whose conception of proletarian state violence was somewhat ambiguous but
nevertheless clear in that force was to be the midwife not just of revolution but of full communism as
well.
Indeed, it seems that Lenin intended the work as a theoretical contribution to Marxist literature that
would transcend the demands of the moment and provide guidance to Russian Marxists (and, indeed,
Marxists of all countries) regarding the nature and role of the state in a proletarian revolution, though
it was also to have practical relevance for the coming proletarian revolution in Russia and Lenin
surely recognized that such a revolution was imminent at the time of writing the pamphlet.
The argument of this article is that the conception of the ‘dictatorship of the proletariat’, as advanced
by Lenin in State and Revolution, was not as far removed from the violent and oppressive dictatorship
that emerged in the early years of Soviet Russia as has often been supposed. It is argued here that
Lenin is to be understood as a complex theorist whose conception of proletarian state violence was
somewhat ambiguous but nevertheless made clear that force was to be the midwife not just of
revolution but of full communism as well. However, that State and Revolution presents an unrealistic
vision of the future organization of a socialist society is not completely rejected; elements of utopian
thinking are very much in evidence in the work.
The question, however, should also be posed as to whether The State and Revolution in fact prescribed
the remedy to Lenin’s problems in 1918. Why did Lenin feel the need to make only a small
amendment (though as will be shown, a significant insertion) to the text after the revolution? The
answer is to be found in a fundamental duality that existed in Lenin’s thought, a duality that had its
roots in the dialectical conception of the world that was held by all Marxists and especially by Lenin.
Lenin had consistently rejected terror as a means of forcing revolution and concentrated instead upon
organizing the masses for their historic role in bringing about socialism. This does not mean,
however, that Lenin rejected political violence in itself. It is not necessary to assume that Lenin was
being disingenuous in these remarks. Nor is there any reason to assume that he was bloodthirsty and
looking forward to the opportunity of exterminating and suppressing his enemies and the ‘enemies’ of
the revolution. Furthermore, there is no reason to assume that Lenin would not have wished for a
peaceful revolution. However, it is the argument of this article that in his more theoretical works of the
time, Lenin did indeed advocate violence and even terror against the ‘enemies’ of the revolution.
Lenin’s argument was that a violent revolution would be absolutely necessary in order to dispose of
the old state machine and lead to the liberation of the proletariat: ‘it is clear that the liberation of the
oppressed class is impossible not only without a violent revolution, but also without the destruction of
the apparatus of state power which was created by the ruling class and which is the embodiment of this
“alienation” [of the working class]’.
This is a clear statement of Lenin’s absolutism: there can be no middle course between a violent
proletarian revolution and a peaceful acquiescence to the rule of the bourgeoisie. According to Lenin,
history had reached that stage whereby the final conflict was about to take place, the conflict that
would for the first time install in power the lowest, most downtrodden, most ‘alienated’ members of
society in place of those who had prepared the way for them, the bourgeoisie. These sentiments are
perfectly within the orthodoxy set down by Marx and Engels in The Communist Manifesto.
The argument of this article is that there was indeed a distinct connection between Lenin’s theory of
the state, as set out in State and Revolution, and the practice of Soviet power. Although important
utopian strands in Lenin’s thought are revealed, it is demonstrated that Lenin very explicitly called for
a violent suppression of bourgeois resistance, a resistance that would inevitably arise from the
destruction of the bourgeois state apparatus that would be the first task of the proletarian revolution.
John Gooding has provided a very insightful analysis of Lenin’s attitude to violence and how it
differed from Stalin’s. According to Gooding, Lenin believed in violence as a necessary means to the
end of achieving socialism and, in this regard, it was a tool that should be used only when necessary
but, when used, it should be a true reign of terror that would last for a short time but inflict such
devastation on the counter-revolution that it would not rise again. Such a view is supported by State
and Revolution, particularly Lenin’s criticism of the lack of revolutionary audacity of the
Communards of Paris in 1871, and is also supported by the practice of Soviet brutality, whereby Lenin
was keen to terrorize the Soviet populace into renouncing their bourgeois and petty- bourgeois
upbringings. On the other hand, towards the end of his life, Lenin saw a ‘culture’ of violence coming
85
into existence, the use of violence for its own sake and not for the sake of the revolution. What
cannot be denied, however, is that Lenin had no scruples about using violence and terror to achieve
socialism. In fact, the argument here is that the use of violence was intrinsic to Lenin’s dialectical
philosophy of revolution. This is not to deny that there was in fact a disparity between the text and
Soviet power. A libertarian ethos does indeed exist in the text. However, this libertarian ethos was
inextricably linked to its opposite, authoritarianism, and the latter was more pervasive. Moreover,
ultimately, when confronted with extreme difficulties in power, Lenin and the Bolsheviks had no
theoretical problems in creating an authoritarian state, as has been argued by Beryl Williams and
Neil Harding. Furthermore, a close examination of State and Revolution reveals that Lenin did not
espouse a revolution for the proletariat and poor peasantry but a revolution that would cleanse
humanity in general of the influence of bourgeois ideology, a revolution that could only be achieved
by the proletariat and the poor peasantry, or at least on their behalf. Thus, the exploited classes
themselves were liable to be treated and oppressed in the same way as the exploiting classes. The text
of State and Revolution, therefore, does contain the seeds of the oppressive, authoritarian and violent
state that characterized the Soviet regime.
Lenin – Ch 1. – the state is an instrument of exploitation of the oppressed classes – through banks, loans and
taxes. The abolition of the proletariat state and state in general – is impossible, except through withering away.
The proletariat needs state power, a central organization of force, of violence, both to crush the resistance of the
exploiters and to lead the enormous mass of the population on the work of organizing a socialist economy. They
do not need to destroy the bourgeois state, they need to win it and use the force through dictatorship to create the
socialist economy and society and then destroy it – the state is an instrument for achieving socialism. So the
proletariat needs first to win the political power to destroy the bourgeois – to organize itself as the ruling class.
The repression after the win of proletariat included the abolition of all monetary privileges to officials –
workmen’s wages.
The first phase of the communist society is socialism – bourgeois law not completely abolished – only in
proportion to the economic revolution – means of production. The bourgeois law recognize them as the private
property of the individual. Socialism will transfer them into common property. In this moment, the bourgeois
law disappear. But there is still need for a state to safeguard the common ownership of means of production, the
equality in labour and the distribution of products.

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State, Economy, Society – REVISION 2018

1. ADAM SMITH – Classical Liberalism – The wealth of nations

• how to increase and maintain the wealth of nations

• to liberalise the economy - not the term of liberalism in Smith’s literature

• he wrote a critique on mercantilism

• cooperation - the pin making process

• good government required for not to be distracted from what is natural.

HIS CONCEPTION ON CLASS

The Wealth of Nations

2. Marx - critique of Adam Smith - Economic Nationalism

• Smith - labour productivity is a factor of ever increasing division of labour

• THE COMMUNIST MANIFESTO

The communist manifesto

3. GLOBALISATION – A STATE IN RETREAT

What sort of state lies behind a free capital?

Retreat - from the market, to a new position of safety

When has state the power over the Globalisation? -50-60s

The variety of ‘national capitalisms’—continental European, East Asian, Anglo-American—finds a parallel in

4. Hayek and the Liberalist State - The road to selfdom

The crisis of 1970s - state of states’ authority, of legitimacy.

1. Hayek – The road to serfdom

4. BONEFELD (2012) – Smith and Ordoliberalism

Conventionally, contemporary neoliberalism is associated with an unfettered eco- nomic system,

1) What does Schmitt's concept of the political entail?

The state needs to free itself

Critic of the liberalisation of state, of mass-democracy.

Renato CRISTI – Strong state and sound economy

1) What in your view is the Leninist conception of the state?

1. ‘Special bodies of armed men’

2. ‘The irreconcilability of class contradictions’

3. ‘The dictatorship of the proletariat’

4. ‘A new and truly democratic state power’

5. ‘The withering away of the state’

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