What Is the Market-State?

Market-State

Both Phillip Bobbit and Richard Robison offer accounts of what a market-state is. Bobbit contends that the core features of the market-state are a crisis of the nation-state, a transformation of core state functions, relations of national states to transnational markets, and cosmopolitan culture. Finance is at the center of the culture, the money economy. Governments are more centralized but weaker because power is allocated by the money men, the banks, the managers of finance and capital, and governments are merely their footstools. According to Robison, on the other hand, market-states are neo-liberal, techno-managerial and instrumental, and citizens are clients and consumers. Both describe the materialistic, consumerist society, yet each has its own theoretical approach and unique conceptualization. This paper will compare Bobbit's and Robison's accounts of market-states and use the writings of Smith, Keynes, Marx and others to help illustrate the nature of the two.

Differences of What a Market State Entails

Bobbit points out that the nation-state is changing to a market-state in today's word because of a "crisis of legitimation" (Bobbit 2011:213). Its former self has been forgotten, or cast off, and replaced by a new ruling authority that is for the moment officially unidentified, though behind the scenes it operates within the context of the "deep state," described by Peter Dale Scott (2015). The new constitutional archetype, which exists willy-nilly a constitution, or with frequent amendments to the "constitution" that presently exists but which is reinterpreted by judges, lawmakers, pundits, politicians, power-brokers, to reflect the will of the powers-that-be, is what is reflected in the emerging market-state. A new security apparatus follows, one that has terrorism as a primary concern -- a threat against civilians from anywhere at anytime (and which strips civilians, accordingly, of the right to be anywhere at anytime). The market-state is the dissolution of the nation-state, of nationhood, of national identity: its overriding aim is to preserve the market. It is global only because it has not found a market outside the planet. It has stretched to the extent that it can stretch, and is thus transnational, merging all cultures, all ethnicities into one melting pot of commoditization, of consumerism, of brand loyalty. It is the demise of any remnant of Old World culture, Old World spirit, Old World vestiges. It is tyrannical (as Robison also points out), while at the same time appearing as though it has the consumer-citizen's best interests at heart because it, after all, has the means of giving it what it needs: wealth and prosperity. Bobbit's outlook is relatively Realist while Robison's focuses on the neo-liberal idealist.

Robison takes the position that the market-state views itself as the nurturer of the world, a motherly advancement that has grown out of the progress of civilization. It is a neo-liberal dream in which economies are dictated by moneyed interests, whose philanthropic attitudes have the world's peace and prosperity at heart. The market-state for the neo-liberal is a triumph over democracy for it guarantees "individual property rights and contracts" (Robison 2006:3). The neo-liberal champions of the market-state distrust both "society" and "the state," which is why they strip control from both and place it within their own hands -- surreptitiously if necessary, out in the open so long as no one can help it. The neo-liberal emerged from the public choice theory that replaced liberal pluralism. "Technopols," also known as bankers, Fascists (although that term is not a kind one or in vogue), technocrats, and come in the guise of many an institution (IMF, ECB), are the leaders in the market-state. Legitimacy is not a character of the new market-state, though leaders do appreciate that it is helpful. Mass media is their tool for acquiring this legitimacy in citizen's minds, yet their control of this is not as complete as it once was, with the emergence of the Internet and the popularity of alternative media. Nonetheless, alternative media weighs in little compared to that of the media titans, which are broadcasted globally and profess the ideology of the market-state.

The Causes of Emergence

The differences in the causes of the emergence of a market-state are diverse and both Bobbit and Robison view them differently. Bobbit attributes the end of "epochal" war with technological developments of long war leading to the fall in legitimacy of the nation-state (as the state cannot protect its citizens due to nuclear weapons and other legitimating factors). Out of this paradigm of fear and the need for security, rises the new market-state with new legitimating factors. Robison on the other hand attributes the rise of the market-state to the fall in practicality of the welfare state and the rise of capitalist democracy which grew to maturation during the Thatcher-Reagan era. Both attribute different reasons to the birth of the market-state, but see the time frame for its conception as the late 1970s, early 1980s.

Bobbit's assertion that the market-state is due to the de-legitimation of the nation-state, which has collapse in its essence because of a failed ability to protect citizens from a new threat -- terror. Robison proclaims that it is the collapse of the welfare state's ability to provide actual welfare -- an effect of the politics of Reagan Republicans. The determining factor, however, is related to the rise of globalization and its effects on isolated societies. Technology has diminished distances and reduced time, allowing peoples all the over the planet to be more closely and intimately connected. Bobbit's view of the effects of globalization on the rise of the market-state are intertwined with his view on the escalated nature of transnational conflict. Weapons of mass destruction are more prevalent than ever and more nations than ever have them. There is a greater threat and greater need for security in the new global community, but there is also more distrust, as the characteristics of a new Cold War 2.0 develop. The market-state rises out of these tensions and needs to secure commodity exchange, support nations in threat of bankruptcy, default, implosion, civil war, invasion. It is the market-state that has what all peoples need: access to fiat currency -- and it is this which drives the current system, the ability to print money.

Robison views the situation in less realistic terms. For him, the market-state is an evolution that has developed in spite of globalization. The "hijacking of neoliberalism" by technocrats, bureaucrats, bankers and world leaders in order to facilitate reform in third world countries, whose materials, minerals, resources, etc. are a tempting prospect for the world leaders is part of the problem of the market-state today (Robison 2006:7). Yet neo-liberalism is not welcome in every corner of the globe, as Robison notes, pointing to Russia with the showdown between Putin and the oligarchs, like Khodorkovsky, who seized control of Yukos Oil under Yeltsin. Putin recognizes the complexity of issues facing the global economy and has wrested control away from the neo-liberals (Robison 2006:8).

As Adrian Pabst notes, society has been "subordinated to the centralized state and the 'free market'" -- which signifies the triumph of capitalist democracy post-Industrialization (Pabst 2010:44). The centralized state, of course, was advocated by Alexander Hamilton, first Secretary of the Treasury in America. Centralization has been a key aspect of the 20th century, at the start of which the Federal Reserve received its power from Congress to supply the nation's money supply. This Act essentially destroyed what was left of the "free market." But for some it represented the triumph of capitalism.

What Success?

Karl Marx, for instance, reacted powerfully against Hegel's dialectic and produced a more poetic and yet more materialistic vision of mankind. Dispensing with Hegel's rational spirit, Marx turned Hegel's "dialectical history of spirit" upside down by creating "historical materialism." The means of production was Marx's focus. Marx examined Capitalism, Industrialism and ideology, and by viewing life in solely material terms developed the Communist Manifesto. This was a radical departure from Hegel's attempt to spiritualize the world. If Hegel was the embodiment of one extreme, Marx was the embodiment of its opposite. Yet it is Robison who asserts that "Marxists have also argued that the internal maturing of capitalism and the increasing interest of business in an orderly system of rules and open markets will ultimately ensure transition to a more generalized and regulated system of capitalism" (Robison 2006:17). Is the market-state this fully matured form of capitalism? It appears to some that this was the intended goal or else the inevitable outcome all along.

But whether society was being spiritualized or materialized, it was all one. As Andrew Gamble asserts, Neo-liberalism always had two faces. But whatever one chooses to call the systems that emerged, or however one chooses to define the concepts that shaped the latter half of the 20th century, culminating in the birth of the market-state in the 1980s, it was always the moneyed interests who were most invested. With the eradication of Old World culture, or at least, in the West, of the remnants of Christian culture, in the 1960s, the new market-state was ready to emerge with the promise of protecting whatever culture the people felt needed protecting (Bobbit 2011:223). The moneyed interests would use whatever carrot the people desired to lure them into the market-state that would ultimately prevail. War followed war in the 20th century, with millions dead -- yet for some reason people continued to believe in the dream of prosperity, the dream of wealth -- and this happened for a generation following WW2. But that all went away soon thereafter.

Keynes (1920) said, "The war has impoverished us, but not seriously." The statement says enough, considering that it is a complete contradiction -- but that is what the neo-liberal was: a contradiction. America was becoming bankrupt both morally and economically. Politically, its strings were pulled by party bosses, lobbies, investors, financiers, and the agents of capital. Keynes was such a one. The shift from isolationism to internationalism was that which Keynes represented: the moneyed interests. Industrialization and the need for resources meant that more than "freedom" and "democracy" were at stake. It was just the opposite, in fact. Industrialization and the need for resources meant that whoever commands the resources, commands the world. The rhetoric coming from Washington at this time was as idealistic as ever -- and completely phony. The most outspoken critic of Washington, the Socialist Eugene Debs, ran for the office of the President -- from prison. As Robison hints, freedom and the market-state do not co-exist: "The competitive forces that drive global markets impose unrelenting pressures upon nations in the scramble for markets and investment" (Robison 2006:18). In short, whoever opposes the new market-state stands in the way of a titanic, monolithic structure and like Debs will find himself speaking from the wilderness.

Nonetheless, neither Bobbit nor Robison presents the clearest vision of how the market-state has emerged full-grown from the head of the nation-states of the world like Athena from the head of Zeus. This gestation was a long one and it began during the modern era, when power shifted throughout Europe from the kings and princes to bankers, during the rise of the House of Rothschild. Adrian Pabst makes this apparent, but so too does Bobbit to an extent, as he outlines the transition from kingdom to nation-state to market-state. However, what is missing is a defined role of the banking cartels as they shifted and vied for power in the kingdoms and nation-states of the world.

In a way, Adam Smith in Wealth of Nations identifies the problem at the root of the today's market-state, which is the complete separation of money from physical wealth and labor. States are at the mercy of the market-state, because it is the market makers who pull the strings. It is not so much fear of annihilation from weapons, as Bobbit proposes, that keeps the citizens subject to the market-state, but fear of annihilation of wealth -- as Pabst intimates, when he notes that centralization is the actual stepping stone from the nation-state to the market-state. When power is centralized and behind that power is the banker, who rose throughout the modern era to usurp control of nation-states everywhere, the time has come for the market-state and theory and practice is irrelevant -- because, as Smith observes, it has no basis in the real exchange of labor for goods: it is fictional, without precedent, and operates willy-nilly.

In post-Civil War America, the economic policy was based on mercantilism. The goal was to support industry by means of tariffs, to pave roads and provide other avenues of transportation via taxation, and to erect a national central bank. These final two aims were very significant in the establishment of the American finance system, and the prelude for the market-state, which was now on course for arrival. The first goal was protectionist, however, because the government propped up "infant industries" instead of permitting the "free market" to dictate what industries would live and what would die. The English had promoted the "free market" -- for example, Adam Smith's Wealth of Nations, but in the U.S., Henry Clay advocated the Hamiltonian system. It was centralization, crony capitalism, and the merger of business and government -- not unlike Fascist Italy under the dictator Mussolini. The only illusion in America was that democracy still prevailed. It did not and had not for some time, as Adrian Pabst notes. Bobbit senses this as well in his analysis of the emergence of the market-state. However, as Bobbit notes, something happened in the 1970s and 1980s to break the egg, so to speak, and allow the market-state to emerge. Was it de-regulation, as Robison implies? Or was it the need for legitimation, as Bobbit asserts? Neither truly gives the best answer as to what really happened. Money and money makers had taken control of the game, simply put. And neither was based on any objective principle of truth.

The real cost of money, Smith (2005:31) explains, is the "toil and trouble of acquiring it." The degree of labor should be equal to the degree of cost. Money saves toil when it can be used in exchange for produce or commodities. Smith criticizes Hobbes who argues that wealth is power. Smith says that such is not necessarily the case. Wealth must, ultimately, be exchanged for labor. "The monopolists, by keeping the market constantly understocked by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate" (Smith 2005:56). To all of those free market economists who think big government is being unfair to Wall Street, this simple statement from Smith should suffice to show why today's prices are so high: "Such enhancements of the market price [by monopolists] may last as long as the regulations of policy which give occasion to them" (Smith 2005:57). Yet, regulations come and go and only give a semblance of power to regulators and legislators. The public is like the unsuspecting dupe upon him trick after trick is played.