Published in 2021, Ilias Alami provides a theory of the capitalist state that allows for current varieties of state capitalism.
The ideas here have been expanded in The Problématique of State Capitalism as part of the book The Spectre of State Capitalism with Adam D Dixon (2023) available via Open Access here.
At the risk of reiterating the now proverbial injunction to ‘bring the state back in’, I want to argue in this article that the current historical conjuncture represents a particularly interesting moment to strategically re-explore – and perhaps to some extent further develop – Marxist state theory.1 I am referring in particular to a number of social phenomena which have conjointly rendered the role of the state more visible in the economy. One can think, inter alia, of a ‘return’ to various forms of state-led development across the global South since the early 2000s (in China, Russia, and other large emerging economies), extensive state intervention following the 2008 global financial crisis in the global North (including the massive bailouts of systemic financial institutions and Quantitative Easing), the multiplication of various forms of state-capital entanglements (such as sovereign wealth funds, state-owned enterprises, state asset holding companies, and development banks), a renewal of industrial policy, the growing participation of states in global networks of production, trade, finance, infrastructure and corporate ownership, and so on. Consider also the distinct extension of state power into more areas of social and economic life, from the resurgence of authoritarian forms of governance and the criminalization of social movements in both the global South and the global North, to the rise of the so-called ‘mass surveillance state’, the increasing militarization of borders, and so forth.
Leaving aside for now the question of the extent to which these developments have been driven by the same (or interrelated) capitalist tendencies, crises, and contradictions, what is clear is that the state seems to be back in business everywhere. Is this polymorphism of state intervention testimony to a return of state capitalism under a new form, or state capitalism 3.0, as commentators across the social sciences have recently suggested (e.g. Musacchio and Lazzarini, 2014; Nölke 2014)?2 I should say at the outset that my own view on the matter is rather agnostic, for a number of reasons that are worth briefly spelling out before developing my main argument. First, my understanding of the state is grounded in the Marxian critique of political economy (and more precisely the ‘open Marxist’ tradition), which conceives of the state as the ‘political form of capitalist social relations’ (Clarke 1992, Bonefeld 1993).3 As such, I am highly skeptical of the idea that the state had ever left, which is implied in the claim that it has somehow returned. Second, I am well aware that periodizing capitalist development on the basis of superficial observations, stylized economic facts, and/or particular (fetishized) forms of state intervention and institutions is potentially highly problematic (see Clarke 1992). Third, despite its now widespread mobilization across the social sciences, I have reservations about the analytical validity of the category state capitalism (and cognates). In fact, I have argued elsewhere with Adam Dixon that there are fundamental problems with the category (as it is currently deployed in the academic literature, in political commentary for the broader public, and in more policy-oriented debates), hampering its ability to render the seemingly more visible role of the state amenable to analysis and critique (Alami and Dixon 2020). Fourth, skeptics could (justifiably) contend that what the new state capitalism fundamentally does is actually pretty familiar: it strives to manage labor-power, money, and land/nature (or what Polanyi called the three fictitious commodities) in ways consistent with expanded capitalist reproduction. Notwithstanding the emergence of relatively new (spatial, political, institutional, and organizational) forms of intervention, their class content is not dissimilar from what the capitalist state has always done. After all, if history has taught us anything in the matter, it is that one of the most pervasive features of state intervention is paradoxically its conspicuously changing character. Indeed, the necessity of politically mediating crisis tendencies and containing open-ended social struggles often requires the development of new forms of state power. In other words, nothing new under the sun with state capitalism 3.0...
And yet, I would argue that dismissing altogether the aforementioned (state) capitalist developments as entirely business-as-usual would amount to a missed opportunity to further develop Marxist theorizations of the state. In my view, it is no coincidence that some of the most remarkable theoretical advancements concerning the state happened in the 1970s-1980s. Consider for instance some of the open Marxist work on the crisis-ridden relationship between the state and the money form (Clarke 1988). These theoretical developments were undoubtedly shaped by the profound transformations that accelerated in the 1970s-1980s historical conjuncture (or, dare I say it, period of capitalist development), such as financial liberalization and deregulation, the floating of exchange rates, the rise of monetarism, the expansion of circuits of credit and fictitious capital, the extension of personal and household debt as a form of social control, and more generally the political constitution of the social power of money under new modalities. As Werner Bonefeld argued at the time, ‘the immediate theoretical problem raised here [by these transformations]’ was that of ‘the relation between the power of money and the power of the state’ (1993: 3). Similarly, his more recent theoretical elaboration on the need for a strong capitalist state as the order-enforcer of ‘market police’ to secure the conditions for the ‘free economy’ (Bonefeld 2014) has been inspired by the rise of neoliberalism and the political construction of the European Union.
My point here is that a keen attention to contemporary contextual-historical developments has allowed Marxist state theorists to theorize often previously under-explored facets of the state. What is important is that, although more visible (due to acute crises or rapid transformations), these aspects were not new; they existed earlier, albeit under different forms. Investigating the transformations in modalities (for instance from Keynesian to neoliberal modalities of state intervention) has allowed not only theorizing the (conjunctural) transformation itself, but also more fundamental (i.e. at a higher level of abstraction) features of the form and class character of the capitalist state. State capitalism 3.0, I contend, is an excellent opportunity to engage in this type of creative state-theoretical reconstruction. But here is where it gets tricky: while state theory is necessary to make sense of the more visible state transformations without reifying them,4 there is also a risk for the critical state theorist to conceive of these transformations as simply relatively new concrete modalities of expression of enduring and more abstract determinations of the capitalist state. The paradox is that this theoretical disposition – which can be summed up as ‘state capitalism? it’s the capitalist state, stupid!’ – is both necessary (see for instance Whiteside 2020 for a salutary reminder) and potentially problematic, especially if it leads to a degree of intellectual apathy.
I submit that a productive way out this epistemological riddle is to introduce some level of flexibility, or ‘plasticity’, in our use of state-theoretical categories. Geographer Jamie Peck provides useful reflections in that regard. He suggests that we ‘mobilize relatively plastic categories of analysis, not rigid ones that beg binary answers ([state] capitalism, yes or no); plastic categories held in constant dialogue (and tension) with empirical inquiries that call upon them as sensitizing devices (or maps) and not as a source of foreclosed conclusions. Awkward, orthogonal, and contradictory cases, like “[state] capitalism(s),” consequently become especially attractive, and potentially productive, as theory-shaping sites’ (Peck 2019: 1194). One way to do that is to construe state capitalism, following historian Nathan Sperber, ‘as a site of reflections on the relations entertained by the state with capitalist forms’ (2019: 111). It is precisely in this spirit that, in the remainder of this article, I will engage in a number of reflections on how state capitalism 3.0 might mean for theorizing the capitalist state. Paraphrasing Bonefeld’s expression cited earlier, I ask: what are the immediate theoretical problems raised by the rise of state capitalism 3.0 and attendant political geographies?
The first theoretical problem is that of the tension between the global character of capital accumulation and the national form of the state. State capitalism 3.0 is a valuable epistemic angle to complicate state-theoretical understandings of this tension. Contemporary capitalist dynamics of uneven development, globalization, financialization, and crisis have generated turbulent disarticulations, resulting in what Mezzadra and Neilson call a partial ‘explosion’ of the national scale (2019: 130). The new state capitalism may be interpreted as a reconfiguration of state power and state-capital relations in the context of this explosion. Interestingly, this restructuring of territory, authority, and sovereignty has been underpinned by the production of spaces and scales that cut across the national. Consider for example the transnational operations of a variety of state- directed and state-controlled capitals, or ‘state-capital hybrids.’ Sovereign wealth funds, state- owned holding companies and asset management bodies have been deployed to retain sovereignty at home (they have been used as state instruments to mitigate enhanced macroeconomic and financial volatility) and/or extend it abroad (Dixon and Monk 2012). State-owned enterprises have also had an increasingly transnational orientation, with phenomena such as foreign listing, the multiplication of mergers and acquisitions abroad, and the growing importance of outward foreign direct and equity investment. Put differently, state-capital hybrids are more and more integrated into transnational circuits of capital. Remedying the accumulation crisis, preserving domestic social orders, securing political legitimacy, and managing class relations at home has been facilitated the expansion of state-capital flows and practices across territorial borders. Furthermore, the tension between the global character of accumulation and the nation-state form has been unevenly mediated by decentralized and fragmented state agencies at different scales. For example, the Chinese regional and provincial state has played a notorious role in supporting the internationalisation of capital, or in supporting ‘national champions’ going abroad (Jones and Zou 2017). In other words, politically managing capital has prompted the emergence of new political geographies that defy hierarchical conceptions of scale. In my view, this significantly destabilizes state-theoretical imaginaries of the capitalist state as a political ‘node’ in the global flow of capital (as often argued in the open Marxist tradition). My argument is not simply that we may need a different geographical metaphor than the node. I think that this also pushes us to creatively rethink how politically mediating the tension between the global character of accumulation and the nation- state form requires a complex multi-scalar articulation of political authority, territory, sovereignty.
The second theoretical question is that of the modality through which the (money-)power of capital disciplines the state. Since the collapse of the Bretton Woods system, the way in which the capital relation impinges most directly upon the form of state is via the fetishized flow of highly volatile private money-capital, its speculative pressure on exchange rates, and its impact on the cost of state debt refinancing on global government bond markets (Bonefeld, 1993; Alami 2020).5 State capitalism 3.0 is characterized by the growing importance of state-capital hybrids as central actors in global finance and investment, notably as sources of patient capital and development finance.6 Does this signal the consolidation of a new modality through which the capital relation impinges upon the form of state? There is some evidence that state-directed capital presents borrowing nation-states with different types of bargains than private capital (e.g. Kaplan 2016; Lee 2018). This is certainly not to say that the latter (state-controlled money-capital) will displace the former (private money-capital) as the prime modality of expression of the disciplinary power of capital-in-general, but in my view this should prompt us to reflect on what the potential co-existence of the two might mean for how we understand the relation between the state and capital.
Third, state capitalism 3.0 and its characteristic enmeshment of statist and commercial strategies provokes us to problematize further the role of the state in mediating inter-capitalist competition under conditions of uneven development. For instance, think about the expansion of state-controlled capital overseas investment in a number of geo-strategic sectors such as natural resources, energy, infrastructure, and high-tech. Consider also the ambivalence of advanced capitalist economies towards state capitalist investment: on the one hand, they have both welcomed foreign state capitalist investment into their economy (Asian and Middle Eastern sovereign wealth funds helped recapitalize distressed banks and automotive firms in France and Germany); on the other, they are increasingly deploying investment screening mechanisms in order to protect their ‘national’ interests. Growing tensions between the United States and China in particular have generated a renewal of interest in the topic, and lively academic debates under the heading of geopolitical economy (see for instance Lee et al. 2018, who draw on Gramsci to critically revisit the work of Giovanni Arrighi and David Harvey on the relation between territorial and capitalist logics of power). I would argue, though, that what is needed is a creative re-exploration of the issue of state power and inter-capitalist competition from a form-analytical perspective. That is to say, a perspective that considers the various political forms that mediate inter-capitalist competition (including imperialism) in their dialectical relation with capital’s global economic content. A deeper engagement with the Marxian concept of the total social capital (i.e. the unity of all individual capitals) might be useful here: the total social capital exists as a multiplicity of unevenly developed total national social capitals (the unity of the individual capitals prevailing in a particular nation- state) which compete with each other. The formation of an average world market rate of profit results in a (geographical) transfer of surplus value from the less developed to the more developed total national social capitals, that is, to the ones with a higher organic composition, a more advanced technological endowment, and a larger scale (Charnock and Starosta 2016). The new state capitalism presents us with an opportunity to further investigate how the capitalist state mediates this competitive struggle over value transfer, which might help us refine our theoretical understandings of state-capital relations.
Fourth, state capitalism 3.0 has been characterized by the creation of various ‘marketized’ forms of state ownership and control which blur the boundaries of the public and the private. For instance, there are new organizational models of state-owned enterprises (by opposition with the more traditional wholly-owned state-owned enterprises) where states own majority or minority equity positions in firms. There are also new modalities of market-oriented governance, with the listing of large state-owned enterprises on stock exchanges, the professionalization of their management, the adding of boards of directors with independent members and a certain budgetary autonomy (Musacchio and Lazzarini, 2014). The immediate theoretical problem raised by these examples - as well as by the generally more visible role of the state in the economy and society - is that of the formal separation between the public and the private. We know that the capitalist state- form is predicated on the formal separation of these mutually constituted spheres (mirrored in the separation of the state from civil society), which is necessary to depoliticize the capitalist economy. To what extent are we observing a shifting of the line of separation between the two? This immediately raises two important additional questions which require further theorizing: what are the limits to state power set by its subsumption into capitalist private property relations? And how far can states go without repoliticizing (or even subverting) them?
Finally, let me conclude with a slightly more speculative thought, returning to an issue raised at the beginning of this article: what if state capitalism 3.0 is more than a historically contingent form of reconstruction of the capitalist state? What if it indeed signals a deeper secular transformation, or the dawn of a new phase of capitalist development, where global capital accumulation is not only dependent on the state – it has always been – but is actually driven by the capital centralized as property of the state?7 What would this mean for theorizing the capitalist state? This question will undoubtedly animate much Marxist and critical political economy debate in the near future, particularly at a time where the coronavirus pandemic is accelerating many of the state transformations discussed earlier. I hope to have demonstrated in this article that, irrespective of the reader’s views on the matter, there is much creative potential in theorizing the state from the epistemic angle of state capitalism 3.0.
References:
Alami, Ilias. 2020. Money Power and Financial Capital in Emerging Markets: Facing the Liquidity Tsunami, London: Routledge.
Alami, Ilias and Adam Dixon. 2020. “State capitalism(s) redux? Theories, tensions, controversies.” Competition and Change 24 (1): 70-94.
Bonefeld, Werner. 1993. The Recomposition of the British State during the 1980s, Hants, UK: Dartmouth.
Bonefeld, Werner. 2014. Critical theory and the critique of political economy: On subversion and negative reason. Bloomsbury Publishing.
Charnock, Greig and Guido Starosta. 2016. The New International Division of Labour. Global Transformation and Uneven Development. London: Palgrave.
Clarke, Simon. 1988. Keynesianism, Monetarism and the Crisis of the State. Aldershot: Elgar.
Clarke, Simon. 1992. “The Global Accumulation of Capital and the Periodisation of the Capitalist State Form”, in Bonefeld, W., Gunn, R., Psychopedis, K. (eds), Open Marxism, Vol. I, London: Pluto Press, 133-150.
Dixon, Adam D. and Ashby H. Monk. 2012. “Rethinking the sovereign in Sovereign Wealth Funds.”
Transactions of the Institute of British Geographers 37: 104–117.
Jones, Lee and Yizheng Zou. 2017. “Rethinking the role of state-owned enterprises in China’s rise.” New Political Economy 22(6):743–760.
Kaplan, Stephen B. 2016. “Banking unconditionally: The political economy of Chinese finance in Latin America.” Review of International Political Economy 23(4): 643–676.
Lee, Ching K. 2018. The specter of global China: Politics, labor, and foreign investment in Africa. University of Chicago Press.
Lee, Seung-Ook, Joel Wainwright, and Jim Glassman. 2018. “Geopolitical economy and the production of territory: The case of US–China geopolitical-economic competition in Asia.” Environment and Planning A: Economy and Space, 50(2), 416-436.
Mezzadra, Sandro, and Brett Neilson. 2019. The Politics of Operations: excavating contemporary capitalism. Duke University Press.
Musacchio, Aldo and Sergio G. Lazzarini. 2014. Reinventing State Capitalism. Cambridge: Harvard University Press.
Nölke, Andreas (ed.) 2014. Multinational Corporations from Emerging Markets: State Capitalism 3.0. Berlin: Springer
Peck, Jamie. 2019. “Problematizing capitalism(s): Big difference?” Environment and Planning A, 51(5), 1190–1196.
Sperber, Nathan. 2019. “The many lives of state capitalism: From classical Marxism to free-market advocacy.” History of the Human Sciences 32(3): 100–124.
Whiteside, Heather. 2020. “State Capitalism is Capitalism”, in Oxford Handbook of State Capitalism.
Taken from "Marxist State Theory Today" Symposium in Science and Society (2021).
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