THE STATE IN ECONOMIC THEORY - Part Two

The isolation of Ethico-Political Values from Economic Value requires the specification of a scientific sphere for the latter such that its precise quantitative determination can allow the State to become technically neutral and to extrude all other “values” from the sphere of economic value. This is the contrary of what Habermas contends in Theory and Practice where he equates the advent of the bourgeois State to the “scientization” of politics tout court. Yet, as is quite evident, the claim of liberalism is precisely the opposite – that is, to be able to “free” the Political, not by scientizing it, but by isolating it scientifically from the Economic. Liberalism does not pretend that Politics can be turned into a science; its main claim and injunction on which the political rule of the capitalist bourgeoisie is based is rather that Politics must not interfere with the “science” of Economics. That is the entire rationale behind the homologation of Politics and Economics operated by both Classical and Neoclassical Political Economy – a free society and a dictatorial workplace!

 

Here it is not just Habermas’s thesis about the scientization of politics but even Constant’s distinction between the “freedom” of Antiquity and the “liberties or guarantees” of Modernity that is neatly surpassed and sidelined. Indeed, far from accepting that politics can be turned into a science, Constant himself – the greatest theoretician of liberalism after Locke - went so far as to claim that it is the “science” of Economics that is the ultimate and perhaps most desirable or efficient “guarantor” of the Political and of its bourgeois liberties against the interventionist State: specifically, for the French theoretician, it is the mobility of capital between nation-states that is the most effective discipline and corrective against “interventionist” States and governments: in other words, it is “the economic law of competition” that disciplines governments! In celebrating the passage from war to trade and commerce as a peaceful way of regulating inevitable human conflict for wealth, Constant conveniently forgets that trade and commerce are indeed – to paraphrase von Borkiewicz - “the continuation of war by other means”.

 

The retreat of the citizen from active participation in the political life of the State to the passive spectatorship of the bourgeois is entirely justified by the scientization of the Economy that allows the ambit of the Political to be confined to the sphere of public opinion. Habermas’s entire enterprise is thus set on the wrong path in that it focuses on the antinomies already evident in Hobbes regarding how the contractum unionis turns into the contractum subjectionis, - in other words, how the freely-entered rational contract between human beings in the state of nature is even possible given the inability of individuals freely and rationally to control their insatiable desires. Liberalism, however, does not rest on these antinomies because, with Locke and then Constant, it already posits the possibility of a societas naturalis based precisely on rational-scientific economic relations, on the scientization not of Politics (!) - as in Machiavelli, on whom Habermas relies to advance his thesis -  but rather on strictly rational economic behaviour, not of the ethico-political and ideological superstructure, but rather of the reproductive structure, of the productive necessity of society (scarce resources); not of the sphere of ethico-moral choice, but of the sphere of economic necessity – bourgeois economics is, after all, the “science of choice” and also “the dismal science”!

 

To be sure, following Aristotle, we must avoid the identification of all social relations with those of “statality” – that is, those relations that require the existence of a State. But our thesis here is that there is no possibility of a separation of the Economic from the Political or of a choice or trade-off between state and market. The notion of “market” is a fiction because the question is not one of whether human beings exchange individual labours but it is rather one of how human beings organise social labour! In this sense, Durkheim is the perfect antidote to Adam Smith’s spurious derivation of the division of “labour” – by which he meant “individual labours” – from exchange. Had Smith started instead from the notion of social labour, he would have understood that indeed it is not exchange that makes possible specialisation into individual labours, but it is much rather the fictitious and coercive parcelisation of social labour into individual labours imposed violently by the capitalist State that makes market exchange absolutely essential for the reproduction of society – “a matter of life and death”, as Loasby insightfully described it (in Equilibrium and Evolution).

 

Bourgeois economic science since Adam Smith is founded on the spurious conundrum of economic co-ordination: it asks, how is it possible for self-interested atomic individuals to co-ordinate their activities so that exchange is possible between them? And the obvious answer – which condemns all neoclassical theory to irrelevance – is that it is utterly impossible for self-interested atomic individuals ever to exchange or to co-ordinate anything at all with one another! As Robert Clower has properly pointed out, there can be no “market” as theorised in all neoclassical equilibrium theory – because there is no meaningful “market process” between human atoms: even Walras’s tatonnement does not amount to market process because prices are not final until all “markets” clear and general equilibrium prices are reached. The question from which we must start instead is the exact opposite: how is it possible for human beings who are species-conscious beings ever to create a society that enforces individualism on them? This is what Rousseau did when he inverted the question of the existence of “property”: instead of assuming that property rights are “natural”, he asked: how and when did “property” become a social reality? Similarly with “statality”, we ask not how the State arises from civil society, as if the two spheres were insuperable antinomic metaphysical entities such as “body” and “soul”, because there is no solution to a problem set in these terms. Rather, we must ask how a society of private individuals can arise from human species-conscious being.