Politics and the State
Professor Roger Seifert
Weekend School
Doncaster
6th September 2013
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Introduction
1. Economic and social origins --Division of
labour and scarce resources
2. Land, Labour, and Capital – the objective
basis of class
3. Work, workers, and the working-class
4. Modern capitalism and the nation state
5. Neo-liberalism, public choice theory, and the
current crisis
6. Democracy, the state, revolution, and rights
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1. Economic and social origins: division
of labour and scarce resources
1.
2.
3.
4.
5.
6.
Early societies tended to be formed in coastal areas and were
characterised as hunter gatherers.
This involved a division of labour based on skills, and natural
functions such as child birth
Specialisms developed with social hierarchies based on the need
to survive, and the role of non-material (magic and religious)
powers
In some cases this resulted in ownership moving from common to
private family which involved inheritance, rights of ownership, and
rights over others
As resources become scarce then groups moved to new
settlements, and/or sought to distribute goods differentially, and/or
tried to improve supply through technological improvements in
hunting and early cultivation.
Pressure on relatively scarce resources leads to generalised social
conflicts
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2. Land, labour and capital
1.Land -- attracts rent as income (landlords)
2. Capital – attracts profit as income (capitalists)
3. Labour – attracts wages as income (workers)
4. These factors of production combine to form all
economic activity anywhere in the world at any
time – efficiency and productivity
5. There must be a market for them to be bought
and sold – and for a market for their outputs
6. Economic ownership creates social classes
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3. Work, workers, and the workingclass
1. Work is exchanged for wages
2. Work takes many forms – not all work is
economic, some is social labour
3. Economic work includes levels and types of
skills, scarcity of skills, and involves
interaction with land and capital
4. Quantity of work is bought from the worker
for wages, made up of different elements –
basic, overtime, bonus, allowances, and
special payments
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Workers ...
1. Entering the labour market – points of entry
and exit
2. Workers work for wages for themselves and
their dependents
3. Wages come directly as pay, and indirectly
as pension and benefits, and as state subsidy
for social wage such as health and education
4. How ‘free’ are workers to stop working and
leave their employment? The ‘loaded gun’
and paradox of being free and not free
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Working class
1. Class is an objective economic category associated with how
you survive through income – like Darwin’s finches
2. Landowning class income is rent; capitalist class income is
profit; and working class is income from selling labour – not
slavery or serfdom
3. Workers are born or become propertyless and therefore have
to sell their labour in a market to employers – this is their
common shared experience of reality
4. So they have no power as an individual in the market --wages are low as usually there are more sellers than buyers,
unless you combine together and become a monopoly
supplier of labour to the employer then you have more market
power. Otherwise the government and large employers act as
monopsonists or oligopolists in the market and create a low
wage economy.
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4. Modern Capitalism and the Nation
state
1.
2.
3.
4.
As Empires began to disintegrate, especially in Africa, Asia, and
South America so new political forms developed in the fifteenth
century .. The city and nation states.
These were characterised by a central political power holding sway
within a bounded geographical area. Inside the ‘walls’ there started
to develop police force, tax collection, public goods such as
sewers, and market trading protected by the state
This spread through war and conquest to natural boundaries and
the creation of nations, as well as the rise of European empires.
The main driver was the need to ‘house’ capitalist modes and
means of production in a secure market environment with safe
banking, and protected supply chains – laws and property rights
Once the state was acknowledged as the ‘natural’ setting for
political life the centralising power of politics could develop through
both unitary and federal systems. This later involved wars of
national liberation, civil wars, and military interventions ... Still
going-on.
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5. Neoliberalism
1.
2.
3.
4.
The neoliberal Washington consensus: ‘liberalize trade and finance, let
markets set price (get prices right), end inflation (macroeconomic stability),
privatize. The government should get out of the way -- hence the
population too, insofar as the government is democratic’ (Chomsky 1999).
Emerged in France in the 1930s in opposition to the Popular Front
government and the USSR; and re-emerged in the late 1940s as an
aggressive ideology strongly in favour of competitive order through a
structured and supervised state; and strongly against labour monopolies
(trade unions and professional bodies)
By the 1970s this Austrian school was attacking both neo-classical and
Keynesian economics, and its main protagonists were actively advising
rightwing parties in Chile, the USA, and much of Europe, including the UK
The free market is seen as the best allocator of resources, the best
decider of costs and prices, and provides the perfect home for the profitseeking rational entrepreneur
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Features of neo-liberalism
1.
2.
3.
4.
Market competition as the best resource allocator
Profit seeking and maximizing as the best form of incentive
No waste through efficiency at the point of production
Replace producer domination (the professions) with
customer sovereignty – patients’ first?
5. Greater authority to senior managers through performance
measures and targets -- indicators; league tables;
inspections; regulations; name and shame
6. Marketize through competitive supply side institutions – NHS
Trusts; FE colleges; Civil Service Agencies; Academy and
‘Free’ schools; and GP practices
7. Privatize through public finance initiatives; outsourced
management of hospitals and GP practices; student fees
and patient charges through insurance
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Public choice theory
Critical analysis of public sector provision based on waste – the
misallocation of resources, because
2. Politicians cannot be trusted to select the best pattern of provision
because of their short-term electoral interests
3. Bureaucrats may ignore politicians and act inefficiently anyway;
therefore
4. Public goods/services and publicly provided private goods/services
should be provided by the private sector since managers will make
rational decisions based on market need and not waste resources;
• ‘The Government’s reforms will liberate professionals and providers
from top-down control. This is the only way to secure the quality,
innovation and productivity needed to improve outcomes. We will give
responsibility for commissioning and budgets to groups of GP practices;
and providers will be freed from government control to shape their
services around the needs and choices of patients. Greater autonomy
will be matched by increased accountability to patients and democratic
legitimacy, with a transparent regime of economic regulation and quality
inspection to hold providers to account for the results they deliver.’
1.
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6. Democracy, the state, revolution,
and rights
1.
2.
3.
4.
5.
The state inside the nation state requires legitimacy and
support to survive in a peaceful manner
Democracy is the favoured shell within which nations exist,
but it has a wide variety of meanings from majority rule (not
majority dictatorship), constitutional issues of relations of
elected and non-elected parts of the state, and rights of
minorities
The state represents class interests and forms a dictatorship
of the bourgeoisie or proletariat. The national interest is
constructed to hide class interests, and involves nationalism,
national identity, citizenship
Revolution changes the nature of class rule
Rights are contested with hierarchies linked with equality,
freedom, justice, and opportunities.
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The role of the state
1.
2.
3.
4.
5.
6.
7.
The role of the state is to create and sustain the free market on behalf
of the ruling class in a class society
It favours weak government but a strong state (in Germany
‘ordoliberalism’ – authority-backed markets)
It sees the inequalities that arise from market activity as a natural
feature of society
Within this it accommodates the power of large companies and
monopolies, especially in finance and trade
Public choice theory attests that the best decision-makers are
managers in command (imperium and dominium) of profit-seeking
And so all economic activity should be in the private sector and taken
away from short-term self-seeking bureaucrats and politicians
The 2008 crisis is an example of this that includes the collapse of
financial and then trade markets; the use of the state to protect
capitalist interests at the expense of the working-class;
subsequent divide and rule tactics; and the instability in the
world order deriving from both the crisis and the solutions.
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