The Market and the State:
 A further reason why the state may be viewed as less important than before is the belief that it is
less important than the market as a source of national prosperity
 We have witnessed in recent decades a turn to the market as a means for securing both greater
economic prosperity and more efficiency in public services
 Whereas at the height of the welfare state in the thirty years ir so after the ending of the Second
World War in the 1945, the state was seen as a defense against and a corrector of generally
perverse state tendencies.
 Yet we have to be careful not to overplay these developments…
 Markets should not be seen as always in antagonistic or in mutually incompatible relationships
with the state. They are also in large part constituted by the state and by a variety of legal and
other public institutions.
 Markets generally require legal institutions and processes - such as contract, or property, or trade
law – in order to have the stability and protection to grow.
 Although the state and the market are generally counterposed to each other in political and
journalistic rhetoric, this is frequently mistaken…state and market are not simply the two ends of
a seesaw…but often are closely entwined.
 Centralizing monarchs and states historically have looked upon the market, and particularly the
traders and other business interests in the towns and cities to provide them with funds to finance
armies and expeditions, and also to support the expanding administrative institutions of
government.
 Major economic interests are not like other group interest. They are privileged.
 States rely upon them to provide the economic conditions and wealth.
Some Key Terms:
 The state:
o King and Kendall begin their introduction to the state noting that the concept stems from
previously established notions of royal sovereignty.
 The Nation:
o …the nation in this European view is a natural community, A nation and its people are
defined in terms of common and longstanding sentiments, habits and languages.
o It is comfortable and at ease with itself through centuries of customary association and
habit.
o State power then is to be exercised on behalf of the people. It is the “national interest”
that should drive state actions, not personal honor or dynastic ambitions, as generally
occurred in monoracial and pre-modern forms.
o The view of the nation as a group of people who see themselves as a natural political
community, and as the basis of state authority, has proved remarkably durable.
o For two centuries or more the nation has generally been regarded as the most appropriate
unit for state rule. The result is that the world is divided largely into nation states.
o International law is predominately based on the assumption that nations, like individuals
have certain rights, notably the rights to political independence and self-determination.
o Nations can be seen as both natural, and contrived, structures for the promulgation of
power.
 Legitimacy:
o King and Kendall have suggested that states find it difficult and costly to rule without a
fairly widespread belief that they do so legitimately, particularly if they have recourse to
the use of force and violence to defend national interests.
The Historical Origins of the State:
 The emphasis on the plurality of casual agents and interpretations that underlie the construction of
the modern state
 No single set of factors is sufficient to account for the rich complexity of state-society pathways
over the centuries and around the world.
 Distinctions between the public and private
 Civil and criminal law was rediscovered in 11th century Rome and use to influence the formation
of the state and its interaction with society
 Patrimonialism: describes the organization of the royal household and its domain, which is in the
hands of the king’s personal servants, as the dominant structure of authority that occurs with the
territorial expansion of royal jurisdiction.
 Feudalism, however, is: power is more widely and locally distributed. Feudalism is described by
the system of fiefs and landholdings in the possession of nobles and aristocrats, and by levels of
rights and immunities and obligations generally associated with such possession.
o Where feudalism was the stronger in west Europe it became characterized by an explicit
ideology of rights. The relations between a ruler and his vassals were consecrated through
an affirmation of rights and duties under oath and before God that reinforced the
autonomy of feudal jurisdictions.
 The combination of both lead to the overlapping jurisdictions competing for power and influence.
Almost inevitably, the king lacked a monopoly of legitimate physical coercion, relying for order
and the redress of grievances on the self-interested duals and conflicts of the landed nobles.
 The relation between such states were predominately based upon the pursuit of territory.
 75-90 of money was used for wars. Outside influences rather than the control of domestic things.
 Gradually, Germanic and fragmented rule was replaced by more centralized state influenced by
Roman law.
Modern forms of rule:
 This was also seen in places outside of Europe and with other faiths (like Islamic rule)
o Islam played a role in early modern state development, first as an "other” which
promoted unity in Christian Europe, but also in its contribution to the arts and sciences.
o China, Persia, and India also sources of mathematical and technological developments
that became universally significant
o The role of the concept of “empire”, particularly in economic terms
 From extraction to markets
 King and Kendall argue that historically large regional economics eventually developed into
Empires, yet the process in Europe differed. Why?
o At the time Europe was comprised of small; empires, nation states and city states with
feudal characteristics more likely to dismantle imperial structure than to strengthen them.
 Wealth Creation  Taxation  Enhanced State Capability  Market Development (a cycle)
 The states began to monopolize force, generate legitimacy, extend bureaucratization and start the
process of creating national identities amongst their subject populations.
 For Wallerstein, the outcome, as capitalism developed across national borders, was a ‘world
system’ that developed in the sixteenth century with a structured unequal, if not unchangeable set
of relations between three types of country, belonging respectively to the dominant core, the
semi-periphery, or the dependent periphery of the overall system.
 Unlike empires capitalism was able to flourish over the succeeding centuries because it had
within its bounds not one but a multiplicity of political systems, with varying strengths, which
allowed it flexibility and competitiveness in an economic arena that could not be controlled by
any one political unit.
 Exchanges took place between territories under different political control, which ruled out tribute,
and took the form of trade, as there was no overarching central authority with the ability to extract
payment from far-flung peripheries, which facilitated the desire of merchants to territorially roam
in search of a profit and under largely customary laws.
 Capitalists were able to move freely between states, which meant that gradually the rulers had to
deliver capitalist requirements, not lest because rulers were increasingly dependent on capitalist
revenues to finance their wars.
 States learnt not to hinder capitalist development but to encourage it by respecting the
needs of the merchant classes.
 Wallerstein and later sociologists and political scientists have regularly articulated this
relationship as an exploitative one and along with class analysis the perspective has been
dominated by Marxist and other new left scholars.
 King and Kendall note that “States necessarily seek to enhance the power of their dominant
classes, and indeed are forced to by the increasing competitiveness of the capitalist world
economy and their own requirements for military and other funds, and they have little if any
independent impact on this economic structure.”  “The capitalist world economy, therefore, is
the international force that holds sway over states that have little or no capability to resist it.”
 However, it is equally plausible to argue that the military and other strengths of individual states
were not solely explicable in terms of their economic positions. By the end of the medieval
period it is increasingly possible to point to other factors, such as administrative efficiency,
political capacities for military mobilization, and geographical position.
 King and Kendall also warn of a certain circularity in Wallerstein’s arguments, namely, that
multistate systems created the world market but are also explained by the emergence of such a
market.
 The developing system of European states began to territorially constrain early capitalism in ways
that continue to endure today. These ‘ready-for-war’, competing geopolitical states preceded
capitalist development and helped direct it, rather than being functionally reflective of it as a
mode of production that was essentially transnational.
 The argument here is that there is no chicken – egg question between states – markets. States
came first. (See quote from Mann on pg. 28)
 Battles and wars, growing in intensity, helped forge the territorial boundaries of both the
absolutist states and the emerging European nations states.
 This geopolitical environment was not simply a backcloth to the development of absolutist and
nation states, but the prime source of them.
 The planning and operation of armed conflict provided the major impulse for the centralization of
administrative resources and fiscal reorganization that was a feature of the rise of the early
modern state.
Sources of the Modern States:
 Towns and local politics
o Elected offices, bureaucrats and the “Literati”
 Increased discursive nature of politics
o Putting the ‘civil’ in civilization
o Gradually the ‘lord’ evolved into the public figure and the ‘household’ evolved into the
administrative state
 Structural problems (international issues)
o War, disease (plague anyone?) economic stagnation
o Crisis and instability in international affairs that , alongside dynastic ambition,
encouraged the territorial consolidation and centralizing pressures that reinforced the
patrimonial impulse.
 Capital Interests
o The ruler could count on the tacit support of urban commercial interests, as a strong state
provided not only opportunities for the opening up of foreign trade, but also protected the
domestic market and provided a general framework of order and stability necessary
for entrepreneurial enterprise.
 Military Technology
o Gunpowder, uniforms, mass conscription, better training and organization...
o War as symbol of states and power
Forms of power:
 We can see in the formation of the modern state at least three key processes, or ‘forms of power’.
Terminology used by Poggi.
 1) A top-down process of the building of managerial capacity to politically administer a large
territory, impersonally and authoritatively through institutions staffed by well-educated,
professional, and increasingly experienced ‘civil’ servants.
o Includes in Europe the role of the Church and parishes
o Significance of law as predictable and applicable to everyone within a territory
o Separation of state rule from the ruler
o Abstract rights not connected to Feudal duties and relationships
 2) A second process is a military one. Theorists such as Mann and Giddens have demonstrated
the criticality of war making as an independent variable and source of power in the construction
of the modern state.
o Varies from state to state
o Related to the need to tax the population efficiently and effectively (without pissing them
off)
o Later included general welfare policies aimed at ensuring national conscripts were
healthy enough to fight
o Also influence of military discipline within capitalist work ethic concepts as well as
general corporate planning (corporate organizational structure derivative of general
pyramidal organizational schemes originally adapted in state militaries.
 3) Finally, economic processes have been regarded by some (notably Marx) as explaining the
development of the modern state as a key instrument in maintaining (but also ameliorating and
masking) the growing class inequalities in capitalist societies.
o Powerful central state accompanies the extrusion of industrial and other workers from
their means for production (and the means to defend themselves)
o Subsequent exploitation by industrialists and other commercial interests
o Thus, a key source of state formation and, and of the legal consolidation of jurisdictions,
is its widening territorial span that helps to standardize and rationalized exchange
relationships across ever-wider spaces.
o This includes the notion of employer/employee relationships
 In addition to these three modes of power in the development of the state, we could also point to
the influence of Italian humanism and the Reformation, which strengthened the power of the
secular authority against that of the Church.
 The religious unity of the Christian community became fragmented and the idea of the charitable
role of the secular authorities was established
 Secularization, not just a rising bourgeoisie, played its part in the development of a public, state
authority.
War, revolution, ideas, and administration:
 The French Revolution and its aftermath gave strong impetus to ideas of republicanism,
revolutionary possibility and the concept of universal human rights, while the concept of the
modern state, in the sense of a centralized administration applying common laws uniformly to all
citizens over the whole territory, received an enormous boost...the ideas received considerable
impetus from the increasingly accepted notion that politics was quite separate from religion...

The writings of Machiavelli in the sixteenth century, on successful rulers mastering the
stratagems of violence and the furtherance of state interests, as human not moral or religious
matters, were especially influential.
 The Treaties of Westphalia were crucial in this development by formulating the notion of secure
and sovereign states with respected territorial borders that excluded incursions on religious and
other grounds by other states (Thirty Years War)
 Between the sixteenth and eighteenth centuries in west Europe occurred a ‘nexus of factors’
known as modernity.
 Europe was composed of several independent states of sufficiently similar size to provide
countervailing power and situated closely together. The resultant balance of power and alliances
allowed entrepreneurs and intellectuals to flourish, which stimulated the consequent challenge of
rationalism and talent to inherited privilege
 During the eighteenth century these influences converged in a number of interlinked ideas that
became known as the Enlightenment.
 Figures such as Hume, Kant, and Voltaire offered science and rational knowledge as the basis for
human progress through the power of reason evidenced by a number of scientific discoveries over
the previous two centuries. (Bacon, Newton)
The origins and development of liberalism and capitalism:
 The role of England/Britain in the development of liberalism and capitalism
 What lay behind British ascendancy
 The reasons for this are complex, but may be classified as both political and economic.
 Politically, England had a number of plus points...unity, machinery of government, expenditure
and taxation was highly competent, stability, security, isolation geographically, no standing army
to soak up resources or require large administrative bureaucracy.
 English reaction to Napoleon led to military expenditure of up to 40% of available resources and
intensifying geopolitical militarism ensured that the English state grew on the back of warfare.
 Parliamentary Sovereignty as a unique British theory on sovereignty.
 The revolution of 1688 succeeded in protecting the traditional rights and privileges of parliament,
the courts and local communities against the assertions of a centralizing crown.
o In comparison the French nobility achieved little independence from the king and
continued to possess a more definite legal status than in England and an economic
dependence on peasant dues. It lacked and economic base, such as that provided by the
commercialized wool trade in England, and consequently relied upon royal absolutism to
extract surplus from and increasingly unproductive and traditional system.
 The value of Wallerstein’s theoretical perspective of an emerging capitalist world economy is that
it is possible to account for the variations in political and economic practice described above in
terms of international constraints and opportunities, not simply as the consequence of discrete or
domestically isolated factors internal to states.
 Wallerstein argues that it was England’s position in the world economy that enabled it to become
the first industrial nation, with a political accommodation between traditional and rising
economic elements.
 It experiences the specific conjuncture of commercial opportunity (mainly textiles) and the
absence of external threat or imperial obligations.
 The result was state machinery just strong enough to provide external security, but
sufficiently weak not to favor either the landed nobility or the new state administrators, so
that neither was able to totally consume the surplus of the most productive forces.
The state outside of Europe: China
 The development of the modern state outside Europe had a number of characteristics.
 In China and Russia, revolutions generated party-led state formation and, in the former,
involved mass mobilization.

Also, distinctively, following the Second World War, we see in eastern Asia, a form of directed
capitalism from the state...a kind of half-way house between outright state control and western,
relatively state-free capitalist development, with a key purpose being the stimulation of
manufacture and industry.
 Examples include Japan, South Korea, Malaysia and Singapore
 By the time of the 15th century China was a rich civilization with a sophisticated state
bureaucracy and possessed many of the conditions that could have led to capitalist and state
development along western European lines.
 Imperial China established some elements of a modern state structure ahead of those in the West
(albeit within an empire), including functionally defined and highly specialized civil and military
bureaucracies, and with state monopolies over the production and distribution of key
commodities, such as salt, water, and bronze.
 By the turn of the 19th century China had a state system that had existed for over 60 years, and
which reached its heights during the Qing dynasty, which was established by the foreign invasion
of a collection of tribes from the north-east region of Manchuria (The Manchus) in 1644.
 Yet in Confucianism, at least as interpreted by the imperial state, lacked the challenge and ‘fizz’
of western rationalism. The emphasis was rather on order, hierarchy, obedience and correct
behaviour both in family and social life and in the relationship between the ruler and the ruled.
 Perhaps even more relevant...there was no notion of individual or social rights governing political
relationships, although this seems not to have deterred fairly regular peasant revolts.
 Despite its highly advanced form of administration, the late imperial state had a poor capacity for
extracting resources and revenue from the populace, which meant that it lacked the means to
redistribute resources to needy sectors or to invest in strategic priority projects. Consequently,
China never industrialized when the West did.
 While science was highly developed, there were few incentives to create the investment to give it
commercial application, and merchants remained rooted at the bottom of the stratification system
 The decline of the imperial state system and an inability to repel foreign raiders followed the
humiliating conclusions to the Opium Wars of 1839-82 and 1856-60. The peasant revolt that
comprised the Taiping Rebellion of 1850-64 had led to bloody civil war and famine and almost
engulfed the regime.
 To survive it was forced to accept foreign military aid. Population growth ran up against the
declining availability of new lands and the limits of a traditional economy, while imperial fiscal
and tax policies became debilitated by increasingly independent provincial rulers keeping
revenues for local use.
 The national civil administration progressively lost its grip on the country.
 Failed reforms of 1898 followed by a defeat in the war against Japan in 1895 demonstrated the
crumbling of the imperial Chinese state.
 The immediate outcome of these events was regular peasant rebellion and reliance on local gentry
to maintain order...the state collapsed in 1911.
 The various forces that coalesced to defeat the aristocratic Manchus could agree on the need for a
replenished national unity, the mix of gentry, military officers, local officials and others could not
agree on the type of constitution to reflect this.
 The result was 30 years of ‘warlordism’ by local chiefs, intermittent and destructive wars, and
national disintegration, exacerbated by repeated foreign incursions, particularly by the Japanese
during the Second World War, before the peasant-backed Communist Revolution of 1949.
The state outside of Europe: Russia:
 The Russian Imperial state in the 19th century had introduce significant modernization and
reforms, as well as protecting itself from the predatory incursions of faster-developing nations. It
had become more militarized, industrialized and bureaucratized than imperial China, utilizing a
range of western innovations and techniques.

Yet defeat in the Crimean War both prevented access to a sea base for the navy and revealed
weaknesses in an imperial regime dependent on a traditional serf-based economy. (Also
highlighted relative weakness compared to competitor nations, and was repeated again in the
Russo-Japanese war of 1904-5)
 Russia’s landed aristocrats...had become state dependent but economically weak.
 Consequently, the imperial regime found itself unable to reform landed structures or, despite
considerable state-induced industrialization, to conduce a productivity spurt that would enable it
to catch up with the West.
 The defeats and strains of the First World War compounded the shackles of a backward agrarian
economy and paved the way for the Bolshevik uprising.
 ...while the party took the commanding role [after the revolution] ...the rapidly expanding and
bureaucratized state system never sought mass participation or perpetual struggle along Maoist
lines as a means of revolutionary purification. Rather, a new class of professional experts and
party elites generated a form of stratification, with access to privileges and rewards, not unlike the
patterns to be found in the capitalist West.
The state outside of Europe: Japan:
 Japan quickly came to dominate East Asia in the late nineteenth century and was also able to
inflict several impressive military defeats upon other great powers in the region.
 The origins of the disparity between the countries can be traced in part to the Tokugawa regime in
Japan that ran from around 1600 until the middle of the nineteenth century, and which unified
Japan.
 It did so by mitigating if not entirely overcoming a system of warring barons and, through its
bureaucratic and centralizing reforms, ensured a level of internal peace and outward protection
from foreign invasion.
 During the two centuries when Japan was relatively isolated form the world, the Edo ‘shogun’—a
local and hereditary commander-in-chief—effectively ruled, despite formal subordination to the
emperor, and successfully undermined the landed aristocrats by rearranging the latter’s domains
and forcing them to divide their time between Edo and home (‘alternate residence’), an
extravagance that contributed to their indebtedness.
 McCargo describes the system as a ‘feudal-central hybrid’, with a firm regime and a control of
the aristocracy that allowed space for the rise of a merchant commercial class, particularly in
cities such as Osaka.
 External incursions and the rise of commerce undermined these arrangements.
 It led, however, to the ‘restoration’ of the Emperor Meiji, and it was the Meiji government (18681912) that followed which effectively led the way for ‘modernization from above’.
 This involved a form of centralizing and enlarging state with which to propel industrialization in
order to meet both the military and economic challenges of other, faster industrializing nations.
Japan sought to learn from the western imperial powers and adopted a range of different
institutional models from a variety of counties...A Japanese Enlightenment...