Does the state always represent a particular economic interest?

The state is a very distinct and complicated institutional phenomenon, which occurs in a political economyand is defined by numerous alternative approaches. In order to clarify the conceptual and methodological issues, as well as to provide a clear set of arguments and analysis, I find it necessary to begin this essay by underlining the polarity of the representations of the state in Marxist and Liberalist approaches. Furthermore, this essay will investigate whether or not the state always represents a particular economic interest by analysing these two approaches in relation to the concept of state and economics. It is commonly agreed by Marxists that the state always represents the particular economic interest of the bourgeoisie; whereas the liberalist approach suggests that the state does not represent a specific interest of any kind but of its implicit self-interest.

Even though Karl Marx does not give a concrete definition of the state, one can discern the terms on which Marx and Engels understood and wrote about the nature of the state and its role. In The Communist Manifesto, they refer to the state as ‘the organised power of one class for oppressing another’[1]and as ‘a committee for managing the common affairs of the whole bourgeoisie’[2]. This conceptualisation of the state remains prominent in the writings of numerous Marxist theorists such as Antonio Gramsci, Vladimir Lenin and Nicos Poulantzas, whose characterisations of the state vary both drastically and subtlety with detailed analysis. For instance, the instrumentalist model differs from the relative autonomy model; the former suggests that the state and its institutions ultimately serve as an instrument to protect the economic interests of the owners of property whereas the latter holds that the state is, to a certain extent, in the hands of the ruling class but is, nonetheless, an independent body of institutions. Similar conceptual and methodological issues apply to liberalism, thus enabling it to be split into such categories as classical, modern, and contemporary. The liberalist approach as a whole provides different understandings of the state and its relation to economy. For instance, classical theorists such as Adam Smith, consider the economy to be a system independent from politics. The market, in the liberalist view, was ‘a reality sui generis’[3]which is in some ways related to, but not an element of the state. There is no doubt that Smith’s view also differs from some of his liberal counterparts such as John M. Keynes, who favours explicit state intervention and Friedrich von Hayek, who provides a critique of centrally planned economies. However, for the aim of this essay, I will demonstrate that despite the main differences in the liberalist approaches, their ultimate response to our question remains consistent.

Notwithstanding the strong link between the state (politics) and economics (the market) in the Marxist approach, this relationship continues to be intricate. The concept of class in Marxism becomes all the more important here due to its causal relationship with the state. Firstly, it is noted a great number of times in Marxist literature that the capitalist state is ruled by one dominant class which has specific economic interests. Marx explains the state by emphasising its organic relation to the bourgeoisieand similarly Lenin holds an instrumentalist approach which treats the state as an epiphenomenon of civil society that is used as a repressive force. However, as Bob Jessop puts it, economic interests do not always run alongside political actions. The bourgeoisie, therefore, controls the political agenda and favours its own interests using the State as apparatus as opposed to the use of the Party by the proletariat. Secondly, the Marxist ideology offers one common premise that private (individual) interests ought to be transmitted to shared (class) interests in order to create class-consciousness, which will enable them to have control over the political agenda. However, this requires individuals to have a certain degree of organisational skills, and an awareness of their shared interests and collectiveness in order for their interests to transform. If they do not possess or utilise such tools, social classes will still exist regardless of whether or not they are recognised as such, but there is no chance of the proletariathaving an impact on the political agenda. On the contrary, if the class-consciousness of a group enables them to use these tools, they will often succeed in making their own interest synonymous with those of an entire society thus become an unchallenged ruling class. Because individual interests can transform into common interests and thus allow the State to be used by a dominant class as a means of achieving control over political agenda, we may state that the capitalist State, which is ruled by the bourgeoisie will always ultimatelyrepresents the specific interests of this particular class.

Although this mechanic view of the state has dominated Marxism, I find it necessary to elaborate on other conceptualisations of the state in order to provide a thorough understanding of its relation to economic interests. For instance, Gramsci and later Poulantzas develop a different view of the state instead of following ‘the ruling class theory’[4]associated with Marx and Lenin. They focus particularly on the form of the state and argue that it is the structure of the state that causes it to be capitalist, rather than its uses by the capitalist (ruling) class. Thus, the state and its institutions act in such a way which favours the transformation of the interests of the bourgeoisieinto the widespread interests of the whole society. Gramsci treats the specific institutions and apparatuses according to their social bases and focuses on the ways in which they function, rather than simply seeing them as an instrument of the state. He describes the state as ‘the entire complex of practical and theoretical activities with which the ruling class not only justifies and maintains its dominance but manages to win the active consent of those over whom it rules’[5]. That is to argue that his definition shows that the ruling class does not only promote its own economic interests but also considers the interests of the subordinate classes in order to secure their support. The means of coercion become all the more significant in Gramscian terms alongside the means of repression in that they enable the state to act in such a way. Poulantzas underlines the importance of the notion of a ‘power bloc’[6], which stems from the state’s internal unity vis-à-vis the unification of dominant class factions, by elaborating on Gramsci’s views. It is accurate to say that Poulantzas has a more complex theory of the state and that these nuanced differences are key factors in understanding how the view in Marxist theory can subtly differ. However, they are not significant enough to have an influence upon the eventual consensus that the state essentially represents the economic interests of certain dominant factions within society, in one way or another.

A few peculiar characteristics of liberalism are significant in identifying the grass-roots of liberalism’s implicit response to our question. For instance, classical liberalism adheres to the principle of a self-operating civil society and strongly limited state activity. If one takes Adam Smith’s view as an example, one can observe that he centres his premise on the idea that, in order to achieve potentially the best kind of society, each individual should direct his efforts to following the paths as set out by the market. Through his idea of the ‘man of system’[7]Smith implies that someone who is so infatuated with his own system that he imposes it on others, regardless of their preferences, is no different than the states’ interventionist approach, which is by no means desirable in his view. The purest interpretation of Smith’s classical liberalism would then be that the market should be left totally alone by the state. However, it is fair to argue that this view is not only radical but also beyond the bounds of possibility because even a minimal, highly laissez-fairestate must have certain economic agency, some level of central planning and some impact upon the otherwise spontaneous processes of the market in order to be recognised as a state. This means that the normative standpoint of classical liberals essentially insinuates that the state needs to be separated from the free market because it represents certain inbuilt economic interests of its own.

The classical liberalists often criticise modern liberalist approaches for abandoning individualism. Modern liberalism, on the contrary, realises that the classical view of the role of the state can be misleading because it claims that purely individualist economic behaviour can be achieved. Modern liberals offer new definitions of the state and its purposes by bringing the ideas of state interventionism and central planning back to the fore. Even though this view can be regarded as a return to the nanny state, I would rather consider it as an endeavour to build the foundations of an environment in which individuals can make sustainable progress. My understanding of the two approaches is that neither slight nor major disagreements have an influence upon the overall liberalist idea that the state represents some innate interests. In order to elaborate on this, it is useful to look at John M. Keynes’ interpretation of the state as well as that of Friedrich Hayek as they are two political economists whose approaches to economics are often dissimilar.

The Keynesian approach was prominent after the 1929 economic crisis, which was precipitated by particular economic conditions in the 1920s. Although I prefer not to discuss the historical background excessively, it is important to note that a remarkable increase in production changed the relationship of supply and demand, which eventually led the laissez-fairemarket system to be perceived as ineffective. Keynes’ reaction to this was to argue for effective state intervention which could guarantee economic stability and find a solution to unemployment through the ‘middle of the road’[8]state. This type of state, recommended by Keynes, proposes possible solutions to the problems of want and poverty as well as to the struggle between classes in order to achieve a ‘true social republic’. In his own words, it is ‘a system where we can act as an organised community for common purposes … whilst respecting and protecting the individual, his freedom of choice … and his property’[9]. However, my understanding of Keynes’ view is that he has a very altruistic perspective in defining the state and the people who run it. He believes that those people can make ‘intelligent judgement’[10]to represent the interests of the whole nation. This implies that the state, in Keynes’ view, must represent the economic interests of the nation rather than a single ruling class, however, in this case, the state would certainly still has particular economic interests, such as the welfare of the nation.

Hayek, on the contrary, provides a critique of state interventionism by arguing that it will eventually lead to totalitarianism. It is crucial to elaborate on Hayek’s argument against central planning because it provides, although implicitly rather than directly, an intelligent response to the question that this essay investigates. Hayek defines central planning as a way of solving economic problems on a communal level instead of an individual level. He explains in The Road to Serfdomthat ‘… this involves that it must also be the community, or rather its representatives, who must decide the relative importance of the different needs.’[11]That is to say that the state, which controls central planning, also has control over the representation of different needs, in other words different interests. It is very important to highlight that Hayek is well aware of the inevitable link between the state and the market; he rather asserts that some forms of governmental activity are perilous. The ideal type of state (Rechtsstaat) in Hayek’s view supports a market-based economy functioning under the rule of law which is designed to control what the state can or cannot do. In other words, the rule of law separates civil society and the state thus preventing the former from being interfered with by the latter within its own body. The state therefore becomes the determiner of its own limitations, for instance it serves the protection of individual rights rather than the establishment of them. This specific type of state, favoured by Hayek, can be examined in more detail and conceivably be the subject of disapproval. However, my comprehension of his view in relation to the representation of interests is that ‘true individualism’[12]takes precedence over collectivism in order to prevent the state from representing the interests of a specific group, class or community. Therefore, if state intervention is perceived and exercised in ways different from those envisaged by Hayek, particular economic preferences can be pursued using the state’s ability to intervene in economics.

I examined the state in terms of the representation of interests in Marxism and Liberalism by closely analysing the views of seminal figures from Marx to Hayek. It is clear that the two ideologies, as well as their subcategories, have provided a variety of definitions of the state. They have very distinct ways of understanding not only the state but also civil society, separation of power and many other concepts. In my analysis of Marxism, I specifically focused on the concept of class when defining the state because the pivotal role of this concept allows Marxism to provide an explicit answer to the question that this essay examines. Namely, the Marxist approach traditionally argues that the state is an apparatus which always represents the interest of the bourgeoisie. Yet, focusing more on structure, Gramsci and Poulantzas suggest that the state is not an apparatus; it is rather an autonomous entity to a certain degree. However, they conclude that the state is able to represent the specific interests of a presiding group because its structure allows any such group to present their own interests as though they were the interests of the whole society. Contrary to the explicit nature of the Marxist answer, I found the liberalist approaches to be more implicit. The form of classical liberalism represented in Smith’s views on the state clearly indicates that in order for the state to represent only its own ingrained interests, the self-regulated market is essential. Contrary to Smith, state interventionism is seen as inevitable by modern liberals such as Keynes and Hayek. My understanding of their arguments is therefore that Marxists and Liberalists analyse the issue in significantly different ways, for instance some refer to the state as it exist and some refer to the state as it should be, but they ultimately reach the same conclusion. On the whole, it is clear that the state is a central actor, not only in political terms but also in economic terms. Because of the prominence of class struggle in Marxism, which does not appear to such a great extent in the Liberalist discourse, we encounter great difficulties not only in identifying where the true interests of the state lie, but also in comparing these two approaches.

References / Bibliography

· Butler, Eamonn. 2012. The Condensed Wealth Of Nations. St Leonards, N.S.W.: Centre for Independent Studies.

· Caporaso, James A, and David P Levine. 1992. Theories Of Political Economy. Cambridge: Cambridge University Press.

· Cristi, F. R. 1984. Hayek And Schmitt On The Rule Of Law. Can J Pol Sci17:521.

· Friedman, Jeffrey. 1988. Marxism And Liberalism. Critical Review2:6–8.

· Hayek, Friedrich A. von. 1944. The Road To Serfdom. Chicago, IL: University of Chicago Press.

· Hayek, Friedrich A. von. 1948. Individualism And Economic Order. [Chicago]: Univ. of Chicago Press.

· Hayek, Friedrich A. von, Stephen Kresge, Leif Wenar, and Friedrich A. von Hayek. 1994. Hayek On Hayek. Chicago: University of Chicago Press.

· Jensen, Hans E. 1991. J.M. Keynes’s Theory Of The State As A Path To His Social Economics Of Reform In The General Theory. Review of Social Economy49:292–316.

· Jessop, Bob. 1982. The Capitalist State. New York: New York University Press.

· Kandiyali, Jan. 2013. Marxism And Liberalism: A New Synthesis. Res Publica19:387–391.

· Lenin, Vladimir Ilʹich. 1932. State And Revolution. New York: International Publishers.

· Marx, Karl, Friedrich Engels, and L. M Findlay. 2004. The Communist Manifesto. Peterborough, Ont.: Broadview Press.

· O’Rourke, P. J, and Adam Smith. 2007. On The Wealth Of Nations. New York: Atlantic Monthly Press.

· Poulantzas, Nicos Ar. 1978. State, Power, Socialism. London: NLB.

· Schlesinger, Philip. 2010. Quintin Hoare And Geoffrey Nowell Smith (Eds), Selections From The Prison Notebooks Of Antonio Gramsci. International Journal of Cultural Policy16:72–73.

· Shearmur, Jeremy. 1996. Hayek And After. London: Routledge.

· Simpson, Peter. 1994. Liberalism, State, And Community. Critical Review8:159–173.

· Steele, G. R. 2001. Keynes And Hayek. London: Routledge.

· Thomas, Paul. 1994. Alien Politics. New York: Routledge.

[1]Marx, Engels and Findlay 2004, 82.

[2]Marx, Engels and Findlay 2004, 64.

[3]Caporaso and Levine 1992, 3.

[4]Thomas 1994.

[5]Schlesinger 2010, 244.

[6]Jessop 1982, 155.

[7]Butler 2012, 83.

[8]Jensen 1991, 300.

[9]Jensen 1991, 299.

[10]Jensen 1991, 302.

[11]Hayek 1944, 95.

[12]Hayek 1948.

Currently studying Social Policy. Researcher. Avid reader. Passionate writer. Interested in society and nature.

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