DEPARTMENT OF POLITICAL SCIENCE AND INTERNATIONAL
RELATIONS Posc 150
STATE CAPITAL RELATIONSHIP
1. State and capitalism
2. Case study: Social Security
1. Reprinted from last week.
2. â(This is a major point) Many analysts feel it is a mistake to think of government
(the state) and the capitalist economic system as totally separate entities that
frequently fight with one another.
1. What we have in the United States is not pluralist democracy, but
capitalist liberal democracy.
i. Liberal democracy:
1. 1) Political rights are preeminent.
2. 2) èRights extend to bodies such as corporations.
1) Semi-market place.
a) Economic activities run from fully competitive to
2. 2) Core versus periphery sectors.
3. 3) Vertical and horizontal integration.
4. 4) Managerial class(es) versus owners.
5. 5) Cross-national ownership, management, capital flows
6. 6) Decisions have national and economic consequences.
2. See Figure 1 on page 4. C. âCapitalism is not self-sustaining
1. It needs supports that must be supplied by coercive external forces, namely states.
i. See the Tragedy of Commons argument.
ii. T Support for airlines.
D. âConsequently, the two–the state and capitalism–cannot be separated.
1. Thought experiment: imagine 21 century capitalism with 18 century size and style
i. Could it–the capitalist system–exist?
2. Another thought experiment: Suppose you wanted to reform fundamentally
government. Wouldn’t you have to remake entirely the economic and political systems?
i. It wouldn’t be enough simply to “take over” the present
GENERALIZATIONS ABOUT THE STATEAND CAPITALISM:
Posc 150 Class 7 State Capitalism Page 2
government. III. SOME SPECIFIC MANIFESTATIONS OF STATE CAPITALISM:A. Functions of
B. The role of “state managers”: reproduction of structures of accumulation. 1.
Management of the business cycle.
i. èPrice stability
ii. Aggregate supply
iii. Productivity growth.
iv. Tools: the Federal Reserve Bank, congressional fiscal policy.
2. Direct and indirect support
i. Subsides and aid to specific industries.
ii. Tariff and trade policy.
iii. Research and development
iv. "Infrastructure" (e.g., roads, harbors, airports)
1) T Highway construction.
3. Provision of "human capital" (schools, health, job training)
i. Who or what segment of society is pushing hardest for educational reform
ii. Supply of trained, "disciplined" labor to enhance productivity
4. Social harmony
i. Labor management conflict.