Capitalism, Globalisation, Ideology, Neo-liberalism, Politics and economics

Knowing our left from our right, Part Two: the states-versus-markets red herring

Yesterday, I started this series of posts by saying that, while anything other than overtly racist right-wing parties and movements are described merely as ‘centrist’ or ‘right-wing’, in the UK anything to the left of New Labour is described by the media as ‘hard’, ‘far’, or ‘extreme’ left. I then set out to argue that the left-right divide is important because it expresses fundamental ideological differences which are themselves grounded in the very real material conflicts that structure our society. I then listed ten beliefs which supposedly make me ‘hard left’, but which I think make me a regular sensible, intelligent, caring human being.

Today I’m going to challenge the usual way in which the left-right divide is framed in terms of ‘states versus markets’. But first a very brief word on language…

Starting on the back foot

‘Words make worlds’. It is surely no coincidence that conservative groups and schools of thought – those social forces and theories that seek to justify, legitimate, and, ultimately, preserve the status quo of class, gender, and racial hierarchy – describe themselves as being ‘right’. The shared meaning of ‘right’ as ‘right-wing’ and as factually or morally correct transcends the English language. In other Germanic languages, like German and Dutch, it is synonymous with the word for the state and law too. Conversely, being of the ‘left’ is bound up with literally sinister connotations. ‘Sinister’ is the Latin word for ‘left’ and in many cultures being left-handed was seen as a mark of the devil that required exorcising. So, we on the left in politics start firmly on the back foot. But, best foot forward!

It’s not states versus markets. It’s always states and markets

The traditional, uncritical assertion is that the left-right spectrum plots one’s political position regarding the optimal size and scope of activity of states and markets in some zero-sum relationship. So, here, as it’s usually framed, if you’re a socialist (i.e. so-called ‘hard left’) you think that the state should be the main economic and social actor planning production, taxing progressively, and providing welfarist social protection. In contrast, those in the centre and to the right believe that the limits of human knowledge make the neutral market a far more efficient and socially just mechanism for production, exchange, and distribution and that the state’s role should be limited to low taxation and spending on providing the essential infrastructure, public goods, and the legal and regulatory oversight that markets require to function optimally.

This reductionist definition of politics is flawed in about every way conceivable. We are wont to call those on the right ‘free marketeers’ or even ‘laissez faire’ ‘neo-liberals’, but, in reality, the state and its coercive powers are as necessary to build our supposedly ‘market society’ as any socialist polity. The market is a social institution and markets need to be constructed in society. This also involves politically bulldozing the people, places, and practices that stood there before. The most obvious contemporary example here is what Paul Mason calls the ‘neoliberal privatisation machine’. The usual strategy is for the state to run down a public service through a combination of underfunding, disciplinary bureaucracy, and media denigration. Then the sector can be privatised, but invariably the new ‘free’ market must be artificially and infinitely propped up through various subsidies (subsidized by taxpayers and consumers) and raising the barriers to entry beyond the reach of all but a few preferred companies. Consequently, in all the former public sectors privatised in recent decades we see not flourishing markets, but monopolies and cartels backed by state law, regulation, money, and, when necessary, repression. As Naomi Klein has most ‘shockingly’ revealed, the amount of violence required to extend and enforce the ‘free market’ has been immeasurable. It has involved the direct and indirect deaths of millions. We can safely call it a genocide. Even arch-free-marketeer and imperialist cheerleader Thomas Friedman famously affirmed that ‘the hidden hand of the market will never work without a hidden fist – McDonald’s cannot flourish without McDonnell Douglas, the builder of the F-15. And the hidden fist that keeps the world safe for Silicon Valley’s technologies is called the United States Army, Air Force, Navy and Marine Corps’. The expansion and intensification (penetration into ever more areas of society and ecology) of market ideology and institutions that we have witnessed over the past few decades could not have been remotely achieved without the use of states.

It’s also clear that markets don’t function like they’re supposed to in the economic textbooks. They are systemically prone to failure. Lot’s to be said here, but suffice simply to say ‘Global Financial Crisis!’ and ‘massive state bailout!’…

bank bailout

And yet, for all the talk of markets, it would be far more accurate to argue that we live in a society dominated not by markets, but by huge global corporate organisations. 51 of the largest 100 economic entities are multinational corporations. Many of these ‘MNCs’ are not just economically larger, but have way more power than most nation-states. Furthermore, these organisations function a lot like the stereotypical ‘inefficient’ welfarist, or even evil Stalinist, state they are supposed to oppose: they are rigidly hierarchical and bureaucratic structures running roughshod over individual lives and human rights and ecosystems, and choosing central planning over market mechanisms in production decisions and resource allocations. Think that’s an exaggeration? Explain why up to two-thirds of global trade takes place not between but within firms. Allow me. It’s because capitalism isn’t primarily about markets; it’s about profit. Thus, neo-liberal globalisation isn’t primarily pro-market or anti-statist; it’s about reviving corporate profitability primarily by increasing and expanding capital’s power and freedom and destroying working class power.

The final reason why the states-markets definition of left versus right is overwhelmingly a red herring is because for many, and an increasing number, on the left, the state is as much a symbol of repression as it is for many on the right. It is fair to say that the dominant socialist thought and practice of the 20th Century, be it Leninism, Trotskyism, or even Keynesian social democracy, was focused on the state as dominant economic and political actor and, in the Marxist case, vanguard of revolution. However, this dominance must always be situated in the context, first, of the central Marxian belief that the dissolution of the system would mean the gradual dissolution of the state itself since the state was really only there to enforce a social system of structural oppression and exploitation, and second, of the rich tradition of Anarchist political thought. Anarchists believe in the rights and capacities of all human beings to organise themselves freely and spontaneously with no need for any overarching structure of political compulsion. Anarchist thought is, I believe, growing in influence today, particularly as information and communication technologies enable us to organise virtually and in real life in the ways Anarchists have long imagined.

In short, whether it’s because right-wing supposedly pro-market/anti-statist ideologies and strategies both require high levels of state intervention and coercion and actually invariably create private monopolies and oligopolies or whether it’s because there is a rich radical democratic anti-statism inspiring much left-wing thought and strategy, the states-markets definition of left-right divide is now mostly an anachronism. What definitely confines it to the margins is the reality that the specific conditions of the post-WW2 world that enabled a co-operative rapprochement between labour and capital expressed in the Keynesian state are long gone and are the polar opposite of today’s reality. That said, it’s never really been states versus markets. It’s always been states and markets or even states-markets.

Thanks, again, for reading. Click here for the link to the next post where I explore the issues of social justice and human freedom.


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