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Jasay, The Capitalist State

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Source: A Chapter in Anthony de Jasay, The State (Indianapolis: Liberty Fund, 1998).

1. The Capitalist State.

Violence, Obedience, Preference

Preferences for political arrangements depend on people’s conception of their good as well as on the arrangements that are supposed to be preferred.

States generally start with somebody’s defeat.

“The origin of the state is conquest” and “the origin of the state is the social contract” are not two rival explanations. One deals with the origin of the state in real time, the other with logical deduction. Both can be simultaneously valid. Historical investigation may establish that, to the extent that we can learn about such things, most states trace their pedigree to the defeat of one people by another; more rarely to the ascendancy of a victorious chief and his war gang over his own people; and nearly always to migration. At the same time, widely acceptable axioms will also help “establish” (in a different sense of the word) that rational people, in pursuit of their good, find it advantageous to subject themselves to a monarch, a state. Since these two types of explanation of the state deal in unrelated categories, it is no use trying to relate them or accord priority to one over the other. Nor is it sensible to infer that because states have come into being and flourished, it must have been rational for people who pursued their good to subject themselves to them—otherwise they would have put up more of a fight before doing so.

Consider in this light a well-regarded attempt at reconciling the (historically) violent origin of the state with the rational volition of the subject which underlies the analytical type of ontologies such as the social contract.1 In this essay, any person living in the state of nature forms an estimate of all future incomes he is likely to get in the state of nature and another estimate for all future incomes he would receive in civil society endowed with a state. The second estimate is taken to be larger than the first. The two estimates are discounted to present value. It takes time to get everybody else round to concluding the social contract that provides the passage from the state of nature to civil society. The high incomes resulting from the creation of the state are, therefore, some way off in the future and the present value of their excess over state-of-nature incomes is small. It may leave insufficient incentive for undertaking the task of getting everybody round to agree to the social contract. On the other hand, a state can be quickly created by violent means. The higher incomes engendered by the existence of the state thus begin to accrue quickly. They do not shrink so much when translated to present value. The comparison of the present value of incomes under a state formed slowly by peaceful negotiation of a social contract, with that of incomes under a state entering society by the short-cut of violence, must favour violence. If so, the income-maximizing rational person can presumably be expected either to welcome the violence done to him by whoever is bringing in the state, or himself resort to violence to organize it. The reader may either take it (though this cannot have been the author’s intention) that this is the reason why most states were not created by peaceful negotiation but by violence or that, whatever was the historical cause in any particular case, this theory of rational motivation is at least not inconsistent with it.

Like the contractarian theories before it, this sort of theory invites the careless conclusion that because states have come into being by violence, and flourished, and because it can make sense for people serenely to submit to violence leading to the creation of the state which they desire but cannot manage to achieve, people did welcome state-creating violence after the event. The underlying assumption is that the state, regardless of its peaceful or violent origin, helps people in the pursuit of their good.

Astonishingly, this assumption is hardly ever cast in a more general form, for instance by allowing for algebraic sign. If it were, it should read “the state helps/hinders,” with the actual balance of the expression depending on the empirical content of the terms “help” and “hindrance.” More informatively, the assumption could be cast in a form like “the state helps/hinders some people, hinders/helps others and leaves the rest unaffected.” The affected are helped and hindered in different ways and to different extents. Unless by a fluke the hindered set is empty (i.e. everybody is either helped or left alone), the algebraic sum is a matter of comparisons between the helped and the hindered. Running up against interpersonal comparisons so early is a sign that our reflections are at least headed in the right direction, towards the central questions of political theory.

If ever there were people in the state of nature, and as a matter of repeated historical fact it took violence to impose a state upon them, it seems pertinent to ask, Why does standard political theory regard it as a basic verity that they preferred the state? The question really breaks down into two, one “ex ante” and the other “ex post”: (i) Do people in the state of nature prefer it to the state? and (ii) Do people, once in the state, prefer the state of nature to it? These questions very sensibly allow for people’s preferences to be related, in some way, to the political environment in which they actually happen to live.2 However, once they are framed in this way, they are seen to have a peculiar character. When social scientists say that they know that Smith prefers tea to coffee because he just said so, or because he has revealed his preference by taking tea when he could have taken coffee, they deal in objects which are presumed to be both familiar and accessible to Smith. When Smith is talking about his preferences for things he can at best know from hearsay, difficulties begin to arise. They are compounded when he could not possibly translate his avowed preference into a practical act of choice, because some alternatives are simply not feasible. People who live in states have as a rule never experienced the state of nature and vice versa, and have no practical possibility of moving from the one to the other. It is often a historical anachronism and an anthropological absurdity to suppose such movement. On what grounds, then, do people form hypotheses about the relative merits of state and state of nature?3

It appears that among certain South American Indians (though conceivably elsewhere, too) an increase in the size of the demographic unit is recognized as favouring the likelihood of the creation of a state, possibly because of the changed scale and kind of wars that this entails. A war chief supported by his quasi-professional warrior followers can coerce the rest of the people into durable obedience. In a book by Pierre Clastres which should prominently figure in any bibliography of the social contract,4 it is reported that the Tupi-Guarani people used to abort this process by swarms of them seceding, going off to distant and fearsome lands on prophet-led flights from the greater dread of subjection, of the state which they identify with evil. The American Indian people studied by Clastres typically live in the state of nature, a condition which has little to do with the level of technical civilization and everything to do with political power. Their chiefs can exhort but not command, and must rely on oratory, prestige and liberal hospitality to get their way. Their prestige depends in part on seldom risking interference in a matter where their exhortation is liable to go unheeded. There is no apparatus among them for enforcing obedience and the Indians would not dream of voluntarily contracting to obey, though they may choose to agree with the chief on a case-by-case basis.

Theirs are, according to Clastres, true affluent societies, easily capable of producing surpluses but choosing not to do so, a two-hour working day being sufficient amply to provide for what they consider adequate subsistence. Though there is little or no production for exchange, there is private property; there could be no private hospitality, no invitations to feasts without it. There is no obvious obstacle to the division of labour and hence to capitalism, but the goods that the division of labour may provide are not prized. Work is held in contempt. Hunting, fighting, story-telling and party-going are preferred to the sort of goods labour could produce. The question is staring us in the face, Is it because of their preferences that the Indians abhor the command-obedience relation inherent in the state, and choose to stay in the state of nature? Or is it living in the state of nature which predisposes them to like, above all else, the tangibles and intangibles that typically go with it?

Marx would no doubt frown at the role tastes and preferences are allowed to play in this way of posing the question, and would presumably decide that subsistence agriculture, gathering and hunting were phenomena of existence, of the “base,” while the institutions of the state were those of consciousness, of the “superstructure.” It was thus the former which must have determined the latter. Clastres, for one, asserts the contrary.5 Analytically (as distinct from historically), both views are true in the same sense as “the chicken caused the egg” and “the egg caused the chicken” are both true. My contention here is that preferences for political arrangements of society are to a large extent produced by these very arrangements, so that political institutions are either addictive like some drugs, or allergy-inducing like some others, or both, for they may be one thing for some people and the other for others. If so, theories that people in general (Hobbes, Locke, Rousseau), or the ruling class (Marx, Engels), mount the political arrangements that suit them, need be approached with much mistrust. Conversely, the view (Max Weber’s) that historical outcomes are largely unintended, deserves a préjugé favorable as the more promising approximation to many of the relations linking state and subject.

Title and Contract


The origin of capitalist ownership is that “finders are keepers.”

This is the acknowledgement that permits the passage from possession to ownership, to good title to property, independently of its particularities, of who the title-holder may be and also of the use he may or may not make of the property. The state which recognized title to property on this ground (though it may do so on other grounds as well) fulfils one of the necessary conditions of being a “capitalist state” in the sense I am using here (a sense which will become very clear as I proceed). The title is not invalidated by scarcity, is contingent neither upon merit nor status, and entails no obligation. The reference to scarcity may need some elucidation. What I mean is that if a man can own an acre, he can own a million acres. If his title is good, it is good regardless of whether, in Locke’s famous words, “enough and as good” is left for others. Ownership is not invalidated by the scarcity of the things owned nor by the non-owners’ desire for it, so that in a capitalist state access to scarce goods is regulated by price and substitution and not by sovereign authority, however constituted.

Those brought up on the notions of primitive accumulation, division of labour and appropriation of surplus value as the source of continuing accumulation, might balk at this manner of approaching the origin of capital and the essence of the capitalist state. No doubt very little capital has ever been “found” and a lot has been accumulated. Moreover, to both Marxists and perhaps most non-Marxists it might look like putting the cart before the horse to proceed from the “relations of production” (which, as Plamenatz has demonstrated, mean relations of ownership “if they are to have any identity at all”)6 to the “means of production,” the things owned. Yet it is not, or at least not generally, a change in the means of production or in the techniques applied to them, that transforms them into capitalist property. Land held by any major French or German noble family down to the Thirty Years’ War was owned by it in the most tenuous sense only. It was a means of production but assuredly not capitalist property in the manner of English or Italian land. Land owned by the English nobility and gentry from the sixteenth century on, can rightly be regarded as capital and has in fact served as the main springboard of English capitalism. Shipping and other mercantile accumulation of capital got off to a flying start in late Tudor and Stuart times due, in great part, to the stakes put up by landowners. Non-capitalist (I am advisedly avoiding the term “feudal”) tenure of land usually originated in service and continued on the strength of a (more or less well founded and realistic) expectation of future service. This was true of the landlord who was supposed to owe service, directly or indirectly, to the sovereign, and of his serfs who owed service to him.7 It is characteristic of English social evolution that land tenure became so rapidly unconditional, and that such (light, and unwritten) conditions as remained, concerned local justice and charity where the landlord supplanted rather than served the state.

The peasant in the North and Central Russian “repartitional” village held land because of who he was and because he had so many adults in his family. His title, such as it was, could be argued to have depended on status, need for and capacity to use, the land. Every so many years, when the cumulative change in the needs of his and other families in the village demanded it, the caucus of influential peasants who ran the obshchinnoe might take away his strips of land and deal him out other, inferior strips. Nobody, however, could sell out or buy into the village; if they could have done, the land would have become capital. The land the American farmer “found” on the frontier, or “proved up” under the 1862 Homestead Act, or got from somebody else who did, was capital. The premises, tools and stock of materials of a master of a craft guild, were not capital. The physically very similar premises, tools and materials of his successor, the small entrepreneur-artisan under Gewerbefreiheit were the very essence of capital.8 Unlike his guild predecessor, he could be anybody and could run his shop the way he saw fit. It is not the scale of the undertakings nor the fact of employing the labour of others which makes the first pre-capitalist and the second capitalist. Both generated “surplus value” and enabled their owner to appropriate it. However (except perhaps in Italy north of the Papal States), the guild master’s title to his business was contingent not only upon constraints on output, price and quality, but also upon who he was and how he lived.










Another’s conception of a person’s good or utility, another’s diagnosis of his real preference or long-term interest, is adequate ground for interfering with his freedom to enter into contracts a consenting adult partner is prepared to agree to if, and only if, it is accepted that it is a proper function of the state to use its monopoly power of coercion to enforce A’s conception of B’s good. Now A may be anybody, or the sympathetic observer, or the majority of voters, or the foremost socio-psycho-economic research institute, or the state itself. Different kinds of states could be distinguished according to which of these potential sources they would profess to follow. The test of the capitalist state is that it follows neither source, for it gives priority to the freedom of contract, including under it the extremely important freedom not to contract at all. Anticipating chapter 2, I might say broadly that other states profess to follow one or more of the possible sources. The choice of “sources,” whose conception of the good is to be listened to, is inevitably determined by the state’s own conception of the good; it will choose to be guided by congenial spirits, kindred intellects. Selection of the adviser, no less than selection of what advice to accept, is tantamount to doing what one wanted to do all along. In choosing to promote B’s good, the state is in effect pursuing its own ends. This, to be sure, is a quasi-tautology; it calls for more attention to the nature of the state’s ends.

The Contours of the Minimal State

Indifference to the satisfactions of governing gives rise to self-imposed limits on the scope of the state.

It is strange but not patently irrational for the state to minimize itself.

A theory, or at least an approximative definition, of the capitalist state, which requires it to respect the freedom of two parties to enter into contracts that do not violate the rights of a third, looks incomplete, as is—by customary standards—the state in question. For what are the third-party rights which the state ought to protect and what are mere pretensions which it ought to ignore? There is a virtually limitless list of potential claims which third parties could make against the terms of a given contract. Laws must be made and administered both to define the category of claims that shall be treated as justified and to reduce the area of doubt (and hence of arbitrariness) between those that shall and those that shall not be so treated. Once there is a state, it is incumbent upon it to deal with these tasks.

There is some presumption that in the state of nature a spontaneous cooperative arrangement would arise and fulfil this function, for the same general reasons which let us suppose that other functions habitually regarded as proper to the state would also be looked after, though there is neither a certitude that they would be nor a definition of the particular shape they would take. Once a state is formed, however, at least some of these non-coercive arrangements are liable to become unworkable and may, indeed, be impossible to bring about in the first place. In the state of nature, anyone disliking the way a voluntary arrangement is working, has only two choices: to accept the way it works, or to bargain for its amendment, a breakdown in bargaining carrying the danger of the whole arrangement breaking down and its benefits being lost.11 The risk of such an outcome provides some incentive for everyone to keep things going by reciprocal accommodation.

In the presence of a state, however, the dissident member of a voluntary arrangement has an added reason to be intransigent (and the other members an added reason to call his bluff), i.e. the faculty of recourse to the state. If he cannot get his way, he can still appeal to the state to uphold the justice of his case, and so can the other cooperators. Whoever wins, the voluntary arrangement is transformed into a coerced one. Turned upside down, this is the same logic as the one in Kant’s argument about the subject’s right to disagree with the sovereign. If there were such a right (which Kant denies), there would have to be an arbiter to whom the disagreement could be referred. The sovereign would then cease to be the sovereign, and the arbiter would take his place. Conversely, if there is a sovereign he will get disagreements referred to him, for there is less reason to yield in private compromise if an instance of appeal exists. What the state must do, to make its life and that of its less litigious subjects tolerable, is to lay down as clearly as possible the laws predicting how it would rule if cases of a given description were appealed to it (thus warding off many appeals), as well as a general description of the cases in which it would not hear an appeal at all.12

Admitting, then, that if the state exists at all, it will somehow or other assume the task of sorting out disputes arising out of third-party claims, what are the guidelines the capitalist state would adopt for doing so while still remaining capitalist, an upholder of the freedom of contract? There is no question of drawing up a design, a sort of code capitaliste for the laws of such a state, the less so as it is reasonable to believe that more than one such code, containing significant variations on the same themes, could each be consistent with the basic capitalist conditions relating to unconditional property and free contract. Perhaps the most economical way of grasping the spirit common to all such possible codes, is to consider that if there is a state (which is not the same as claiming that there could really be one) which is prepared to agree to these basic conditions, it must be one which finds its satisfactions elsewhere than in governing.

Such a statement may look obscure and require a little elaboration. When we reflect about choice, we incline at least tacitly to suppose that “behind” the choice there is a purpose, an end. It used even to be said, for instance, that consumers seek satisfaction and producers seek profit, and their choices can be thought of as rational (or not) in terms of a corresponding maximization assumption. But what end or ends does the state pursue, the maximization of what can qualify its conduct as rational? Various answers of varying degrees of sincerity and seriousness could be proposed: the sum of the satisfactions of its citizens, the well-being of a particular class, the gross national product, the might and glory of the nation, the state budget, taxes, order and symmetry, the security of its own tenure of power, etc. (I address the question more seriously on pp. 267-70.) The likely maximands all seem on closer scrutiny to require that the state possess some specialized capacity, equipment to attain them. In addition, greater rather than lesser capacity looks desirable for guiding the course of events, dominating the environment, and actively working upon the maximand (increasing the pay-off, e.g. enlarging the dominion rather than merely the power over a given dominion). Even if there are maximands which do not require a vast capacity to act for their attainment—unworldly objectives like, say, the peaceful observation of rare butterflies—would it not be pointless for the state pursuing them, voluntarily to bind its hands and renounce in advance the use of a fully-fledged apparatus for exercising power, of the richest possible set of “policy tools”? Might they not come in handy one day?

My definition of the capitalist state, however, requires it to opt for a sort of unilateral disarmament, for a self-denying ordinance concerning the property of its subjects and their freedom to negotiate contracts with each other. A state whose objectives needed, for their realization, a strong capacity to govern, would not willingly adopt such a self-denying ordinance. This is the sense in which we say that the ends of the capitalist state, whatever they are (we need not even seek to find their particular content) lie outside government.

What, then, is the point for the state in being a state? If it finds its satisfaction in what we could term “metagovernmental” maximands, rare butterflies or plain peace and quiet, why not resign and stop governing? The only plausible answer that suggests itself is to keep them out, to stop them from getting hold of the levers of the state and spoiling it, the butterflies, the peace and all. The very special rationale of being a minimal state is to leave few levers for the zealots to get hold of and upset things with if, by the perversity of fate or of the electorate, they manage to become the state.

Inheriting a strong, centralized state apparatus is part of the secret of the successes both of the Jacobin terror and of Bonaparte. In what are, perhaps, the climactic passages of L’ancien régime et la révolution (Book III, ch. VIII), Tocqueville blames the pre-revolutionary French state for having set over everyone the government as “preceptor, guardian and, if need be, oppressor,” and for having created “prodigious facilities,” a set of egalitarian institutions lending themselves to despotic use, which the new absolutism found, all ready and serviceable, among the debris of the old.

Marx, too, is perfectly clear about the value to the revolution of the “enormous bureaucratic and military organization, with its ingenious state machinery” put in place by the regime it had overthrown. “This appalling parasitic body, which enmeshes the body of French society like a net and chokes all its pores, sprang up in the days of the absolute monarchy.... The seignorial privileges of the landowners and towns became transformed into so many attributes of the state power.... The first French Revolution... was bound to develop what the absolute monarchy had begun: centralization, but at the same time the extent, the attributes and the agents of governmental power. Napoleon perfected this state machinery.”13 Thus, it is not the state that mistrusts itself and would rather not have levers or powerful tools lest it should misuse them. It knows that it could not possibly be tempted to misuse power. It is its rivals for state power who would, by the nature of their ambition, misuse it. (The minimal state may even be aware that if it was succeeded by a rival with contestable ends in mind, the latter would need but a little time to put in place the rudiments of an apparatus of non-minimal government. However, even gaining a little time, and hence hope, would be better than handing it a ready-made system of pulleys and levers.) Seeking, as it does, aims which positive government is incapable of promoting, and fearing its capacity for wrong-doing in profane hands, the capitalist state is rational in adopting the contours of the minimal state.

Recalling the regimes of Walpole, Metternich, Melbourne or Louis Philippe (only more so), with a blend of indifference, benign neglect and a liking for amenities and comforts, the capitalist state must have sufficient hauteur not to want to be bothered by petty disputes among its subjects. The more quietly they get on with their business, the better, and it may occasionally, and a little reluctantly, use a heavy hand to make them do so. Its distance from the mundane concerns of its subjects does not, on the other hand, imply the sort of heroic hauteur which a Nietzsche or a Treitschke wished to find in the state, which reaches out for some high purpose, risking in avoidable war the life and property of the subject; nor the hauteur of utilitarian ethics, which sees the subject and his property as legitimate means to a greater common good. In a seeming paradox, the capitalist state is aristocratic because remote, yet with enough bourgeois overtones to recall the governments of the July Monarchy of 1830-48 in France. At any event, it is a state which is very unlikely to be a republic. As a digression, it is worth remembering, though it may not prove much, that Alexander Hamilton was a convinced royalist. His is a good example of how little the essence of capitalism is understood by the public. If people were asked who was the most capitalist American statesman, some may be tempted to say “Grant” and think of railroad land grants, “Garfield” and think of the Gilded Age, perhaps “McKinley” and think of Mark Hanna and tariffs, “Harding” and the Teapot Dome scandal and the Ohio Gang. Such answers miss the point. These Presidents caused or condoned corruption and scandal by favouring some interests over others, which means using state power for their ends. If any American statesman was good for capitalism, which is not evident, it was Alexander Hamilton.

Such a state, then, will make few and simple laws and not enforce many of the laws it may have inherited. It will make it clear that it dislikes adjudicating claims against established situations resulting from people’s freely negotiated contracts, will do so gingerly if it must but only as a last resort.

It will be reluctant to promote the good of society, let alone to order the more fortunate of its subjects to share their good fortune with the less fortunate, not because it lacks compassion, but because it does not consider that having creditable and honourable feelings entitles the state to coerce its subjects into indulging them. We must leave it at that, and not try to find out (nor could we if we tried) whether it is “belief in laissez faire” or some other, more subtle conviction about the proper role of the state which is holding it back, or simply indifference to the satisfactions that may be found beyond the limits of the minimal state.

If States Did Not Exist, Should They Be Invented?




The real-life states people are stuck with, more often than not because their distant ancestors were beaten into obedience by an invader, and sometimes due to Hobson’s choice, to having to take one king so as to escape the threat of getting another, are not primarily “good for this” or “least harmful for that.” They are not shaped to meet the functional needs of a system of beliefs, preferences, life-styles or “mode of production.” This affirmation of the autonomy of the state and the separateness of its ends does not exclude all scope, over time, for some mutual adaptation whereby the state comes to conform to people’s customs and preferences, just as they learn to accept and, from time to time, to enthuse about some of the state’s demands upon them.



Both theories have an irreducible common core: both require people (“the people” in the one case, “the capitalist class” in the other), to abdicate a de facto faculty, the recourse to force. One and the other, each in the manner proper to it, confers a monopoly of the possession (and hence obviously of the use) of force upon Leviathan, the monarch or the class state. One’s motive is fear, the other’s greed; not moral but prudential reasons.


The state, under either the contractarian or the Marxist hypothesis, has got all the guns. Those who armed it by disarming themselves, are at its mercy. The state’s sovereignty means that there is no appeal against its will, no higher instance which could possibly make it do one thing rather than another.14 Everything really depends on Leviathan giving no cause to people to rebel (Hobbes is assuming that it would not), or on the state oppressing only the right people, i.e. the workers.


Inventing the State: The Social Contract

Political hedonism requires a benign state or a conformist subject. Failing both, it is a foolhardy attitude.

Hobbes, who could be mischievous, saw that every man has reason to fear his fellow man if they are alike.

All men, needing self-approval, seek eminence over others. If I let my fellow man seek eminence, he will invade my property, therefore I must attack his first. Self-preservation must drive both of us to fight each other, and there will be “savage war for glory.” Both our lives will become “nasty, brutish and short.”

While self-preservation is said to be the spring of all Hobbesian conduct, it is clear that I would not have to worry about preserving myself if my neighbour, whether to become eminent or to forestall me, did not invade my property. Is there a way of persuading the neighbour to desist? Perhaps by letting him know that I am not seeking eminence over him and he has nothing to fear? If self-preservation no longer obliged him to keep up his guard, and he lowered it, I could pounce and gain eminence over him; and so could he if I agreed to let him be and lowered my guard. As he is like me, I have to fear him, and cannot prudently make the first step which would break the vicious circle if he were unlike me.

In modern decision theory, such situations are called “prisoners’ dilemmas.”15 As set up, they have no spontaneous cooperative solution. Left to themselves, both “prisoners” must, if they are rational, seek to get the better of each other by “confessing” first, and both end up with a longer sentence than if they had both played “thief’s honour” and refused to confess. In Hobbes, they both end up with a shorter and nastier life. Their sole escape is to abandon the state of nature and conclude a “covenant of mutual trust” whereby a designated sovereign is invested with whatever power it takes to enforce peace (or natural right). Thus nobody need fear that, by behaving trustingly, he will be taken advantage of by the others; therefore all can behave trustingly. The sovereign will, for some reason, use his absolute power only for obtaining this result. His subjects have no right to rebel but nor do they have any reason for doing so. It is not clear whether, if they did have cause, they would have a right to rebel.

The prisoners’ dilemma implicit in Hobbes requires, for its proper study, the state of nature where no sovereign authority stops the participants from making themselves miserable if they are so inclined.16 States are in a state of nature in that they retain the faculty of recourse to force against each other and do not transfer their arms and their sovereignty to a super-state.17

I will consider, in this context, two Hobbesian dilemmas, those of war and trade. While I am at it, I will go on briefly to look at Rousseau’s problem of general social cooperation also, though the latter is quite different in nature (it is not a “prisoners’ dilemma” and requires a special psychological assumption in order not to result in voluntary cooperation).

Let there be two sovereign countries (to borrow the language of army manoeuvres, “Blue” and “Red”). Both want “eminence” in Hobbes’s sense. The order of their preferences is: (1) victory in war, (2) disarmament, (3) armed peace and (4) defeat in war. They must choose between two “strategies”—arming and disarming—without knowing what the other country chooses. The “pay-off matrix” resulting from this situation will then be as in figure 1.

Though Blue does not know whether Red will arm or disarm, he will choose to arm because by doing so he avoids defeat, gets peace at a cost as the worst-case pay-off and may get victory if Red is a sucker. Red is like Blue, and reasons similarly. He, too, chooses to arm. They end up in the southeast corner of the figure, in armed peace which is the “maximin” (the best worst-case) solution proper to hostile players. The northwest corner of costless peace is denied them, though they would both prefer it, because of their even greater preference for victory over each other. Once in the northwest corner, Blue would try to go into the southwest and Red into the northeast quadrant, i.e. the “cooperative solution” of costless peace would be unstable in the absence of a super-state enforcing disarmament.

This is, broadly, the result we actually find in the real world. States are most of the time in the southeast quadrant of the figure, i.e. they live in costly armed peace. From time to time they slip into the southwest or northeast quadrant and make war. Whether this is by virtue of unequal arms, a freak cause, or for another of the innumerable historical causes of war, is beyond our present concern. Despite their preference for northwest over southeast, however, they do not surrender sovereignty. We must carefully note this fact and consider it presently.



Figure 1


The dilemma of trade is formally identical to the dilemma of war. Let there be the same two countries, Red and Blue. Each wants the other’s goods. Both have the same order of preferences: (1) get foreign goods for free, (2) trade home goods for foreign goods, (3) retain the home goods (no trade), and (4) forgo the home goods and get no foreign goods (total loss, confiscation, expropriation, write-off). The two countries contract to deliver goods to each other (or to lend for later repayment, or invest for a return). As there is no enforcing super-state, they can either perform the contract or default, as in figure 2.

Game theory would once again predict that neither trader will give the other the chance to play him for a sucker, so that “maximin” is the dominant strategy for both and they end up not trading. The structure of their preferences and the structure of the pay-offs jointly deny them the benefit of trading in the absence of a contract-enforcer. This prediction, of course, is belied by the widespread fact of trade, investment and lending across national jurisdictions, which those who engage in them find on the whole worthwhile in the face of a certain frequency of bad debts and defaults of one kind or another. States are in certain circumstances even prepared to give redress to foreign nationals and enforce performance by their own defaulting nationals; an altogether quixotic act by the standard conceptions of basic social contract theory. Equally quixotic is the voluntary submission, by medieval traders and bankers, of cases of default or disputed contract performance to the judgments of their peers appointed for the purpose but possessing no arms and commanding no police, especially when you consider the danger that the decision might have gone against them!



Figure 2


If history demonstrates that two ostensibly identical dilemmas regularly give rise to contrasting outcomes, the war dilemma resulting in armed peace (with occasional war) and the trade dilemma resulting in trade, the ostensible identity must hide some significant difference. Intuitively, war is more easily seen as a single isolated act than is trade. A war can even be fought “to end all wars,” to have hegemony in peace forever after. Trade is typically an indefinite series of recurrent acts, which the participants fully intend to prolong. Everything that mathematics and psychology finds conducive to cooperative solutions in “iterated” prisoners’ dilemmas applies to trade, much less of it to war. Neither dilemma and its real-world resolution, however, lends convincing support to the Hobbesian reason for inventing a state and escaping from the brutish misery of the state of nature, into its encircling arms.

Is there more force in Rousseau’s thesis, that people in the state of nature are unable to organize the social cooperation necessary for the realization of their common good (the general will)? His basic statement of the problem is in the Second Discourse, and is known as the parable of the Hunting Party.18 If (two) hunters stalk a deer, they are sure to catch it if only each one will stand faithfully at his post. They can in this way unconsciously acquire the idea of mutual obligation (which, for Rousseau, forms the passage from the state of nature to civil society), but only if their present and palpable interest demands it. However, they lack foresight and “hardly think of the morrow.” Therefore, if one sees a hare passing, he will quit the deer stalk and run off to catch it, depriving the other hunter of the deer and, indeed, of bagging anything at all. The pay-off matrix of their interaction will have the form of figure 3.19

As both hunters prefer the deer, or even half of one, to a hare, neither has an incentive to “sucker” the other, leaving him standing while he runs off after the hare. Neither would, therefore, rationally opt for a “maximin” strategy (go for the hare in the southeast corner). The deer hunt, then, is critically different from the genuine, Hobbesian prisoners’ dilemma. Social cooperation is not a dilemma and does not for that reason require coercion. A problem (but not a dilemma) is only created for the hunting party by the myopia of one of the hunters who cannot see that a sure deer at the end of the hunt is better than a sure hare. (If both hunters suffered from such complete lack of forethought, they might “objectively” have a prisoners’ dilemma without feeling it. Neither would worry about the end-result of the party; they would not perceive the missed deer, let alone invent an arrangement, such as the social contract creating a state, enabling them to catch the deer rather than the hare, which is the only reason they would have for not letting the hunt take its course, with both hunters running off after the game, if any, they happen to see.)



Figure 3


Supposing, then, that at least the second hunter is alive to the advantage of getting the first hunter to keep his place, what solutions are available for overcoming the latter’s myopia or fecklessness? The contractarian solution is to get him to become a party to the social contract, voluntarily submitting to coercion when needed. But it is difficult to see why he would see the advantage of the social contract if he does not see that of standing fast.20 He is either shortsighted and sees neither, or he is not and the hunters don’t need the social contract.

A more promising line of thought is to suppose that the hunters have hunted before and, as by happy chance no hare crossed their paths, they did catch the deer. The second hunter (the far-sighted one) has saved up a quarter. Next time out he dangled it before the myopic eyes of the first hunter, keeping him at his task and letting him have it at the end of the day while he kept the whole new deer they successfully caught together. (He has, of course, not forgotten once more to set aside a quarter, to maintain the “wage fund.”) This, in a slightly abridged version, is the story of abstinence, capital accumulation, natural selection, the differential contributions and rewards of entrepreneurial initiative and wage labour, and in fact the organization of social cooperation and the determination of the terms on which the participants are willing to carry it on. (In “How Justice Overrides Contracts” [pp. 160-173], we will meet the claim that willing social cooperation is not a matter of the terms the participants agree, but of the terms being reasonable. If the terms that have proved capable of bringing about social cooperation need not, for that reason alone, be considered reasonable, difficulties arise about the very meaning of social cooperation. What, then, is cooperation on unreasonable terms?)

The story, however, does not naturally lend itself to the sort of happy ending which we have learnt to associate with the exit from the state of nature. It does not explain why rational persons, living in a state of nature, should have a preference for the state and seek to invent one (and it is silent on the civic preferences of persons who have been educated in and by the state and have never had occasion to try the state of nature).

Persons are in states, have been there for many generations, and would have no practical means of getting out if they wanted to. States are in the state of nature; many of them have known something approaching the security offered by the super-state when they were part of the Roman Empire, or a British colony; and if they wanted to surrender their sovereignty to a super-state, there are at least some practical steps they could take to try and organize one. They do nothing of the sort. They are quite content to listen to their own voice at the United Nations, leaving it the fatuous irrelevance that it is. Is it, then, beyond reasonable doubt that persons would rush and negotiate a social contract if, like states, they had the option not to do so?

States have known both peace and war throughout history. Some states have died as such because of war, though more states have been born. Most, however, have survived more than one war and continue to muddle through, without finding existence so “nasty and brutish” as to make life within a world state look enticing. Even the very particular prisoners’ dilemma in which two nuclear superpowers are exposed to the threat of destruction and to the expense of maintaining a counter-threat, has not so far induced them to seek shelter and assured self-preservation in a Soviet-American contract.

On a less apocalyptic level, “beggar-thy-neighbour” policies in international trade seem to be a perfectly good practical illustration of the prisoners’ dilemma as applied to states. Generally speaking, all states could be better off if, by cooperative conduct, they allowed the potential gains from trade to be fully realized, just as all prisoners would be better off if none betrayed the other by confessing. The “dominant strategy” of each state (as the “optimum tariff” argument demonstrates), however, is to engage in discriminatory trade practices, high tariffs, competitive devaluations and so forth. This strategy is “dominant” on the argument that if other states behave nicely and adopt free-trader conduct, the first state will reap advantages from its misbehaviour, while if other states misbehave, it would suffer by not also misbehaving. The supposed outcome of every state adopting its dominant strategy is an escalating trade war with everybody rapidly getting poorer and being unable to do anything about it in the absence of a super-state with powers of coercion. In actual fact, many states much of the time behave reasonably well in international trade. They either do not have a dominant strategy or, if they do, it is not to misbehave. Most states most of the time adhere to GATT rules (which stand for the “cooperative solution” in game-theory parlance). Trade wars are generally minor skirmishes, limited to a few products of a few states and instead of escalating as they should, they usually subside. Such “partial free trade” is achieved, just like “partial peace,” without benefit of a state above states and the transfer of power to it. Complete free trade, like total peace, may from most points of view be more satisfactory, but the cost of the added satisfaction must appear prohibitive to the participants; states do not willingly submit to domination even if the dominant entity is to be called the Democratic Federation of Independent Peoples.

People, in the sense of natural persons, however, are supposed by contractarian theory to submit willingly. Unlike states in international relations, people as persons have no opportunity to contradict this supposition. For centuries, since Hobbes if not before, political theory has been assuming that people did not, in fact, very much mind the potential threat of being coerced, being too frightened of the hurt they might suffer in un-coerced “chaos” (this is the Hobbesian version of the social contract), or too interested in the beneficial results of coercion (which is the broader basis of the social contract, laid by Rousseau).21 I believe this is how one should read the cryptic and profound observation of Leo Strauss (few others have thought more powerfully and deeply about these matters), that Hobbes “created” political hedonism, which transformed life “on a scale never yet approached by any other teaching.”22 It is a not very important detail that instead of pleasure (as hedonists are supposed to seek), Hobbes spoke of self-preservation as the end which explains action.23 Since Hobbes, it is tacitly treated as a self-evident truth that people need, or want to have, the state because their hedonistic pain-and-pleasure calculus is ipso facto favourable to it.

Recent research into the prisoners’ dilemma, both deductive into its logical structure and experimental into actual behaviour in such situations, has established that acceptance of coercion by the participants is not a necessary condition for their finding a “cooperative solution.”24 Some of the crucial steps toward getting this result are: (a) to admit that the dilemma can be confronted more than once (it can be an iterative or sequential “game”), so that reliance on single-stage rationality may not correctly predict the moves of rational players; (b) to make a player’s move depend in part on the other player’s move in a previous stage of the sequential game, or in some other game altogether (i.e. to make it depend on experience), either player taking account of the reputation established by the other for toughness or softness; (c) to make him play as he ought to if the other player were playing tit-for-tat; (d) to introduce some regard for the relative value of present and future; and (e) to let the increased pay-off of a cooperatively solved game teach people to go for the cooperative solution in subsequent games. It is intuitively plausible that in a state of nature where people do not instantly club each other to death in a single-stage non-cooperative performance of the dilemma game, but where they survive for some time and have both occasion and incentive to assess and heed each other’s capacity for retaliation, vengefulness, mutual protection, gratitude, fair play, etc. the prisoners’ dilemma becomes both very much more complicated and loses much of its inexorability.

Nor need one limit the application of this result to the sole bellum omnium contra omnes. Hobbes makes people choose Leviathan to produce order out of purported chaos. But people need not have chosen Leviathan, since some kind of cooperative solution, some kind of order emerges in the state of nature, too, though it may not be the same kind of order as that produced by the state. Both qualitative and quantitative differences are possible, indeed extremely likely, though it is very hard to form sensible hypotheses about what the voluntary solution would exactly be like. Whether the voluntary product, in turn, is inferior or superior to the state product, will have to remain a matter of taste. The important thing is not to confuse the question of how we like either product, with the far more vital question of how we like the entire society in which order is state-produced, compared to the entire society (the state of nature) in which it is a voluntary arrangement.

What goes for order goes, by simple extension of the argument, for other public goods as well, whose production was supposed to have been altogether prevented by a rigidly interpreted prisoners’ dilemma and the related, rather looser free-rider problem.25 Once a public good, say clean air, paved streets or national defence, gets produced, people cannot be excluded from enjoying it regardless of whether they have paid their share of the cost of producing it. (We shall have occasion in chapter 4, pp. 234-6, to question what “their share,” in the sense of the part of the cost that a particular person ought to bear, can possibly mean.) Therefore, many will choose not to bear “their share” and the public good will not get produced or maintained, unless the state steps in to coerce all would-be free riders to pay, at the one hit both overcoming “isolation” by making each individual act as he would if all had one common will, and providing “assurance” to each individual who pays that he is not a lone sucker, for all others pay too.26 If the general dilemma is conceived of as a sequential game, a society’s perpetual learning process, it seems obvious that it can have a solution for each intermediate stage, and arbitrary to rule out the likelihood of at least some of the solutions being cooperative, so that as a general proposition, at least some quantities of some public goods will get produced on a voluntary basis.

“Some quantities” of “some public goods” as a result of non-coercive spontaneous solutions, sounds insufficiently affirmative. The reflex reaction of capitalism’s adversary may well be that, because of external economies and diseconomies, only an all-embracing compulsory arrangement, i.e. a state, can ensure that the right amount of public goods gets made. In this view, the prisoners’ dilemma would represent one limiting case, that of total failure to “internalize,” and the state would be the other limiting case in which the entire benefit of an external economy gets internalized from the state’s aggregative point of view. The in-between case of the voluntary association, the spontaneously formed interest group, would stop short of complete internalization and as a consequence would typically tend to fall between the two stools of the unresolved prisoners’ dilemma and state provision of the right amount of the good. Nor is it, of course, always true of any and all levels of output that if the state has in fact chosen that level, it considered it (given all constraints, scarcities and competing claims) the “right” one. If the claim that the output of a public good chosen by the state is the right output, is to be more than a tautological statement of the state’s “revealed preference,” it must somehow be related to some independently derived standard of the optimum.

In the case of individually consumed goods, this standard is, by and large, the Pareto-optimum reached by equating the marginal rates of substitution and transformation between any two goods. But as it is nonsense to speak of a marginal rate of substitution between a public and a private good (a person cannot decide to give up a dollar’s worth of chocolate to get a dollar’s worth of clean air, law and order or paved street), this standard does not work. When the post-1981 Polish state imports one more water-cannon and reduces chocolate imports by the corresponding sum, the decision can hardly be related to the marginal Polish chocolate-eater’s relative liking for law and order and chocolate. If it expresses anything, the decision must express the state’s balancing of the real interests of society that it considers important, in proportion to the importance it attaches to each. The individual chocolate-eater is obviously unable to attach the proper weights to the interest of the vanguard of the working class, of the Organs, of proletarian internationalism, etc. How much tax to surrender to the state so it may buy law and order or clean air for the use of the individual taxpayer in question is not a matter of any taxpayer’s choice. The state cannot buy a collective good for him.

A standard which will do for “collective choice” (if we must resort, for the sake of argument, to this question-begging concept) what Pareto-efficiency does for individual ones, can always be contrived by supposing either (a) that society has but one will (e.g. a will manifested by unanimity, or possibly the general will), or (b) that the several more-or-less divergent wills (including, arguably, the will of the state itself) which are present in society can, by a system of weights attached to each, be expressed as one will (what Robert Paul Wolff disdainfully calls “vector-sum democracy”).27

Whoever fixes the relative weights to be attached (i.e. makes the interpersonal comparisons, or reads the general will, or whichever way the reader prefers to phrase it), fixes the “right” output of public goods with respect to the standard he has thus set up for himself. Whatever he decides, he will, therefore, always be in the proud position of having fixed the right output; for there can never be independent proof to the contrary. It is a redundant apology for the state to say “by reading the general will,” “by balancing the merits of conflicting claims,” “by duly considering public need against the background of its disinflationary policy,” etc. it has determined the right output of public goods. For, whatever the output it chose on whichever considerations, it would not have been, according to its own lights, the wrong one, and no one can ever say that somebody else’s lights would have led it to a more nearly “correct” determination.

It remains to add that the political hedonist who is content to sign the social contract must somehow or other have convinced himself that he is getting a good deal. The incremental pleasure he expects to derive from having the state arrange the production of the correct amount of order and other public goods, instead of relying on a possibly quite inadequate patchwork of spontaneous arrangements, must outweigh the pain of coercion he thinks he will suffer at the state’s hands.

The obvious case where this must hold true is when he does not expect to suffer at all. He will, as a matter of fact, never be coerced if he wills what the state wills, or vice versa, if he can rely on the state to will only what he wills. He must either be the perfect conformist, or he must believe in a benign state which has the power of coercion but lets itself be controlled by those who have none.

Inventing the State: The Instrument of Class Rule

The state is autonomous and subjects the ruling class to its own conception of its interest; it “serves the bourgeoisie despite the bourgeoisie.”

“Autonomy” and “instrument,” rule and subjection are terms that yield their real meaning only to the dialectic method.

Attempting to interpret the Marxist theory of the state carries more risk than reward. The young Marx, superbly talented political journalist that he was, said incisive and original things about the state, but he did so more under the impulsion of events than in search of a general doctrine. In his later system-building periods, on the other hand, he was not very interested in the state (Engels was a little more so), presumably deflected from the subject by the very force of his theory of class domination, which may be thought implicitly to provide an understanding of the state. In any case he made little effort to make it explicit. This was consistent with his confining the determinants of social change in the “base” and allowing the state, a phenomenon of the “superstructure,” either no autonomy or only an ambiguous one. This implicitness is the reason why, despite the much greater respect later Marxists (notably Gramsci and his intellectual descendants) paid the superstructure, one is reduced to speculation about what Marxist theory “must mean,” what view it may hold of the forces acting upon and exerted by the state, in order to preserve logical consistency with the whole of its construction.

Such speculation is rendered doubly hazardous by the combination, in much Marxist writing, of the dialectic method with verbose discourse aimed at the ad hoc needs of the day. Owing to the latter, one can nearly always find, in some hallowed text, passages to support almost any stand and its contrary, so that for every “on the one hand” the adept can cite an “on the other” and a “yet we must not overlook that....” The dialectic method, in turn, enables its practitioner to nominate any one out of a pair of contradictory propositions for the role of survivor, of the third member of the triad of thesis-antithesis-synthesis. He can for instance decide, according to the requirements of his argument, that where an object is black but also white, it is in reality white (though black in appearance), or possibly vice versa. It is in this way that the relation of state and subject in Hegel,28 and that of the state and the capitalist class in Marx, turn out to be perfectly pliable according to the needs of the moment and of the context. (This is also, in a general way, the reason why the average dialectician can virtually always devastate the average non-dialectical argument.)


Though there will still be an apparatus for the “administration of things,” there will be none for the “government of men.” Close reflection is needed to grasp, if grasp one can, how it is possible to “administer things” without telling people to do this or that about them; and how telling people differs from “governing people.” A tentative answer, for what it is worth, would seem to be that this becomes possible when men will do what is required of them in order for things to get administered, without being made or commanded to do so.


The reduction of the state to the role of blind instrument of class oppression is obviously unsatisfactory. Engels and Lenin make intellectually more exacting Marxists wince when they resort to it. Yet the concept of an autonomous state, a state with a will of its own which keeps surfacing in Marx’s early political writings, is even less acceptable; to elevate the state to the rank of a subject is revisionism, Hegelian idealism, fetishism if not worse, inconsistent with the mature Marxism of the Grundrisse and of Capital. It leads to deep political pitfalls. Among them, mainstream socialism is menaced with lukewarm reformist notions of the state reconciling society’s inherent contradictions, promoting worker welfare “despite the bourgeoisie,” taming “crises of overproduction,” etc. The proponents of planned “state monopoly capitalism” as the means to mitigate capitalist chaos, and Juergen Habermas and his Frankfurt friends with their doctrines of legitimation and conciliation, are all considered as carriers of this menace.

A synthetic solution of some elegance, elaborated mainly by modern West Berlin Marxist scholars, consists in grafting social contract theory on to the trunk of Marxism. Capital in the “fragmented” (i.e. decentralized) capitalist mode of production consists of “individual capitals” (i.e. separate owners have separate bits of it). These “capitals” require that workers be docile, trained and healthy, that natural resources be renewed, legal relations enforced and streets paved. No individual capital, however, can profitably produce these goods for itself. A problem of “externality” and a problem of “free riding” stand in the way of capitalist reproduction and accumulation. Non-imposed cooperative solutions, sparing capital the risks involved in surrendering itself to a state, are not envisaged. There is, thus, an objective necessity for a coercive state “beside and outside society” to protect workers’ health, provide infrastructures, etc. From this necessity, its form and function can be logically derived (Ableitung).29 It leads to the state’s monopoly of force, just as various other forms of political hedonism lead to it in the systems of Hobbes and Rousseau. Yet the “doubling” (i.e. splitting) of the economic and the political sphere and the Besonderung (separateness) of the state are subject to the “dialectic of appearance and essence.” The state appears neutral and above classes because it must stand above “individual capitals” in order to serve general capital; it must subjugate the individual bourgeois in order to secure the interests of the bourgeoisie. Any state having the power of coercion, whether absolute monarchy, republic, democracy or despotism, seems able to fulfil this function.


This belief is a source of difficulties and for none more so than for historians who hold it. An historian who does not, and who did more than most to dispel many of the myths that used to be spread about the French Revolution, reminds us: “neither capitalism nor the bourgeoisie needed revolutions to appear and become dominant in the main European countries of the nineteenth century,” remarking drily that “nothing was more like French society under Louis XVI than French society under Louis Philippe.”30 Starting off in 1789 firmly committed to the sacredness of property, in a little over four years this revolution reached the point where property rights were to become contingent upon active support for the state of the Terror (Laws of Ventôse). Ironically it was Thermidor—the counterrevolution—which called the state to order, rescued the inviolability of property and secured the bourgeois interests which were supposedly the raison d’être of the revolution. Once it ejected the Girondins, the revolution made the purposes of the state override the security of tenure of property and, contrary to the usual excuse made for it, it continued to escalate its radicalism long after the tide of war had turned in its favour. Marx, who (notably in “The Holy Family,” 1845) recognized perfectly well that the Jacobin state “became its own end,” that it served only itself and not the bourgeoisie, considered this a perversion, an aberration, a departure from the norm. He diagnosed the trouble as the alienation, the detachment of the Jacobin state from its bourgeois class basis,31 and in no wise suggested that it is far from being an aberration for the state to detach itself from its “class base,” if indeed it was ever attached to it.

Nor is Marxist theory better served by the historical facts of other revolutions. Engels is reduced at one point to grumble that the French have had a political and the English an economic revolution—a curious finding for a Marxist—and at another juncture that the English have, in addition to their bourgeoisie, a bourgeois aristocracy and a bourgeois working class. It has been pointed out that while the view that the “big,” “real” revolutions were brought about by the interest of a class, fits badly 1776 (USA), 1789 (France), 1830 (the Low Countries) and 1917 (Russia), it fits worst of all the two English revolutions of 1640-9 and 1688—the Puritan and the Glorious.32 Nor did capitalism need a revolution to rise to dominance of a sort in the Italian city states. Moreover, Russian peasant and mercantile capitalism between the seventeenth and nineteenth century throve to such good effect that it colonized the Black Soil region and Siberia, without noticeable hindrance from Moscow, which was the seat of a decidedly pre-capitalist state.33 (It may be, though, that such “frontier” phenomena should be regarded as exceptions, i.e. that capitalism can colonize and settle a frontier, without being helped or feeling hindered by the state.)

Whether with or (in deference to historical evidence) without the benefit of revolution, the capitalist class nevertheless ends up with the state serving its interest. Sometimes, in aberrant, “untypical” situations, however, the bourgeoisie does not dominate the state. The distinction is important as it admits an at least quasi-autonomy of the state in particular historical settings. Engels formulates this as follows: (The state) “in all typical periods is exclusively the state of the ruling class, and in all cases remains essentially a machine for keeping down the... exploited class.”34 We must, I think, take this to mean that there are periods (which we can thus recognize as typical) when the state is an instrument of class oppression acting at the behest of the ruling class, while at other times it escapes the control of the ruling class yet continues to act on its behalf, for its good, in its interest. The ruling class, of course, is the class which owns the means of production, whether or not it “rules” in the sense of governing.


In France, at the fall of the July Monarchy the bourgeoisie momentarily found itself with political power on its hands. It was unfit to wield it, parliamentary democracy (viz. the election of March 1850) unleashing popular forces which endangered the bourgeoisie more than any other group or class.35 (Contrast Marx’s diagnosis with the astonishing position taken by Lenin in “The State and Revolution” that parliamentary democracy is the ideally suited system for the requirements of capitalist exploitation.)36 In “The Eighteenth Brumaire of Louis Bonaparte,” Marx talks of the bourgeoisie abdicating power, condemning itself to political nullity; he compares the dictatorship of Napoleon III to a Damocles sword hanging over the head of the bourgeoisie. It is not clear whether Marx thought that in abdicating, it was aware of the dangerous aspects of Bonapartism, lower-middle class populism, state parasitism, etc. He felt sure, though, that in doing so the bourgeoisie bought itself the secure enjoyment of property and order, which would suggest that the Damocles sword was not really poised over its head. Engels, as usual plainer in meaning, states that Bonapartism upholds the wider interests of the bourgeoisie even against the bourgeoisie. Like the rod for the good of the child, the autonomous state of the Second Empire was really for the good of the capitalist class even at times when the latter felt restive under it.


The Marxist prototype of the state, in short, allows it a good deal of autonomy outside “typical periods,” i.e. virtually all the time, yet obliges it always to use this autonomy in the sole interest of the capitalist class. Nothing much is made by Marx, nor by his successors down to the present, of his original insights into the phenomenon of the state lacking a particular class base and serving its own ends, nor into bureaucracy, parasitism, Bonapartism and so forth.





In fact it is hardly feasible to reconstitute what might be the Marxist theory of the state, without recourse to dialectics. The state engages in acts that harm capital and capitalists, like progressive taxation, the grant of legal immunities for trade unions, anti-trust legislation, etc. These acts are pro-capitalist. The state serves the ruling class,37 and as these are acts of the state, they are necessarily in the (“real”) interest of the ruling class. Individual members of the capitalist class may be too short-sighted to recognize their real interest, and may be restive about the state’s actions, joining the John Birch Society in opposition to bourgeois democracy, but the class as such will see the identity of its interest with that of the state, for this is how Marxism defines the concepts of ruling class, class consciousness and state.





The historical evidence points, as is its well-known habit, every which way, leaving it very much up to the capitalist to decide whether the state, with the risk its sovereignty involves for the possessing class, is really a desirable aid for the operation of capitalism. It is revealing of such perplexities to read of how inadequate the state can be as an instrument of class oppression, and of the remedies that were sought at one time. It appears that prior to the repeal of the Combination Acts in 1825, illegal unionism was rampant in Oldham, Northampton and South Shields (and no doubt elsewhere, too, but the account in question is a local one), the Acts being poorly enforced. Through three decades to 1840, unions grow muscle, “frame rules... and inflict punishments”: the state was useless, and an 1839 Royal Commission report on the county constabulary found that “the owners of manufacturing property had introduced arms for self-defence, and were considering the formation of armed associations for self-protection,38 in some ways a more appealing idea than paying taxes and not getting the state’s help they thought they were buying.

When hiring Pinkertons to break strikes and “to protect manufacturing (and mining) property,” the Pennsylvania steel industry or the Montana copper mines not only made up for the shortcomings of state and Federal “instruments of class oppression,” but have done so by taking up a private instrument which they could control and which in any case did not have the attributions and the scale to control them. No doubt armed voluntary associations or Pinkertons were only resorted to (in fact surprisingly rarely), when the state utterly failed to come to capitalism’s aid as it was supposed to do. That sometimes it did fail is yet another support for the view that the political hedonist is really quite gullible in thinking that he has made a clever bargain, for there is precious little he can do to make the state keep its side of it.


Closing the Loop by False Consciousness



The political hedonist looks to the state for “pleasure,” for utility, for the furtherance of his interest. Were he to recognize that the state cannot administer things without also governing men including him, so that he is liable to be coerced and constrained, he would still expect to enjoy a positive balance between the pleasure he derives from the state’s help and the pain he may suffer from being hindered by it.40 In fact, his general idea of the state is that it is none other than the professional producer of such a positive balance. If he had a different conception, he could still be a supporter of the state but not a political hedonist.


By virtue of having to weigh them—for there is no other way of fusing them into a single magnitude, an index to be maximized—the state must, its unselfishness and impartiality notwithstanding, transform its subjects’ ends, assimilating them into one of its own, for the choice of weights to be applied to each subject’s end is nobody’s but the state’s. There is a quite unwarranted belief that in democracy, the state does not choose the weights, because they are given, incorporated in some rule which the state cannot but follow as long as it stays democratic.


If the state, in pursuit of impartiality, were to borrow somebody else’s system of weights (to be applied to the several ends desired by its subjects), for instance, that of the sympathetic observer, the same problem would reappear, albeit at one remove. Instead of choosing its own weights, the state would choose the observer whose weights it was going to borrow.

None of this is new. It is merely a particular way of reiterating the well-known impossibility of aggregating individual utility functions into a “social welfare function” without somebody’s will deciding how it should be done.41 The particular approach we have chosen to get to this conclusion has the merit, however, of showing up fairly well the short-circuit going straight from the state’s power to the satisfaction of its ends. If the state were its subjects’ father and its sole end were their happiness, it would have to try and reach it by passing along a “loop” consisting, in some manner, of the several happinesses of the subjects. But this is made inherently impossible by the “layout” (plurality and conflict among the subjects, combined with the state’s power to decide conflicts). The layout inevitably contains a short-circuit. Thus the state’s end-fulfilment is quite direct, bypassing the loop going the long way round, via the social contract or via class rule and the satisfaction of the subject’s ends.


If a subject is to be contented, in harmony with a capitalist state, it would help him to be imbued with a certain ideology whose basic tenets are: (1) that property “is,” and is not a matter of “ought” (or that “finders are keepers”); (2) that the good of the contracting parties is not an admissible ground for interfering with their contracts and the good of third parties only exceptionally so; and (3) that requiring the state to do agreeable things for the subject greatly augments the probability that the state will require the subject to do disagreeable things.

The first tenet is quintessentially capitalist in that it dispenses with a justification for property. Some say that Locke has provided an ideology for capitalism. This seems to me off the mark. Locke taught that the finder is keeper on condition that there is “enough and as good” left for others, a condition calling out for egalitarian and “need-regarding” principles of tenure as soon as we leave the frontier and enter the world of scarcity. He also taught that the first occupier’s right to his property springs from his labour which he “mixed” with it, a principle on a par with the several others which make the ownership of capital contingent upon deserts: “he worked for it,” “he saved it,” “il en a bavé,” “he provides work for many poor people.” (If he did not do any of these meritorious things, what title has he got to his capital? Already the case of “his grandfather worked hard for it” becomes tenuous because it is twice removed from such deserts.) To the extent that the rise of capitalism was accompanied by no political theory which sought to separate the right to property from notions of moral worth or social utility, let alone succeeded in doing so, it is true that capitalism never had a viable ideology. This lack, in turn, goes some way towards explaining why, in the face of an essentially adversary state and its accompanying ideology, capitalism has shown so little intellectual vigour in its own defence, and why such defences as it has managed to muster have been poor advocacy, lame compromises and sometimes offers of honourable surrender.



I advance no hypothesis about the scale and shape of the cost-benefit schedules which describe real people’s attitudes to these questions, nor about the ones they “ought to” have if they all had the very highest order of political wisdom, insight and understanding. The implication of this duality is that the consequences of calling in the state to further one’s interest are complex; they are partly unintended, and also largely unforeseen. People endowed with the political talents that take them as close as possible to perfect foresight would, therefore, presumably have different attitudes from those who assess proximate consequences only.


This does not, of course, mean that people adhering to the capitalist ideology must seek to go all the way and attain the state of nature. It means, however, that at the margin of actual experience they would seek to restrain and “roll back” the state. It means that in terms of the direction of change, they would find congenial the capitalist state which (as we have seen) has intelligible reasons of its own to put restraints upon itself.

Such a state, it cannot be said too often, is an abstraction, an expository device. So is the person adhering to the capitalist ideology. He is not necessarily the abstract capitalist. He may be the abstract wage-earner. His identification with an ideology which (we contend) is the one par excellence conducive to the proper functioning of capitalism is not, as the Marxist theory of consciousness would have it, a necessary consequence of his role in the prevailing “mode of production.” He need not “exploit”; he may be “exploited.” His consciousness with regard to the state can (if it really must!) be tautologically derived from his interest; if his personal pain-and-pleasure, cost-benefit, help-or-hindrance calculus tells him that he is better off under less government, he will be for less government. No a priori reason stops a wage-earner from reaching this conclusion, any more than it stops a real-life capitalist from wanting more government. Marxism, at least “vulgar Marxism,” would condemn both for false consciousness, for failing to recognize their “real” interest which (again tautologically), is completely derived from their class situation. However, enough has been said by now to make clear that we find no convincing reason to suppose that a person is somehow making a mistake if his ideology is not the one purportedly “corresponding” to his class situation. A capitalist and a worker may both be allergic to the state they know; they often are; their reasons may well be largely the same.


False consciousness can, with luck, close the loop; for subjects need only believe that their ends are no different from the ends the state is in fact furthering. This, it must be supposed, is the meaning of “socialization.” Such a result is promoted by the state’s ability (and in particular by the role it assumes in public education) to render society relatively homogeneous. It is closely allied to the process alluded to at the beginning of this chapter whereby people’s political preferences adjust to the political arrangements under which they live.42 Instead of people choosing a political system, the political system can to a certain extent choose them. They need not with Orwell’s Winston Smith, actually come to love Big Brother. If substantial numbers or perhaps a whole class of them develop sufficient false consciousness to identify their good with what the state is actually providing, and accept the collateral subjection without doubting the attractiveness of the bargain, the basis is laid for consent and harmony between the state and civil society, though the state is, inevitably, a presumptive adversary of its subjects.

[1. ]Robert L. Carneiro, “A Theory of the Origin of the State,” in J. D. Jennings and E. A. Hoebel (eds), Readings in Anthropology, 3rd edn, 1970.

[2. ]A more succinct statement of the same point is found in Michael Taylor’s excellent Anarchy and Cooperation, 1976, p. 130: “if preferences change as a result of the state itself, then it is not even clear what is meant by the desirability of the state.” See also Brian Barry, The Liberal Theory of Justice, 1973, pp. 123-4, for the related argument that since socialization adapts people to their environment, a heterogenous or pluralistic society is unlikely to turn homogenous and vice versa, although “only one generation has to suffer to create orthodoxy (as the absence of Albigensiens in France and Jews in Spain illustrates).”

However, Barry’s use of the socialization argument seems to me somewhat lopsided. Must we exclude the possibility that the environment can generate not only positive, but also negative preferences for itself? Enough examples from second-generation socialist countries and even from third-generation Soviet Russia, attest to a virulent allergy to totalitarian ways and a yearning for diversity on the part of some unknown but perhaps not negligible part of the population. In the pluralistic West, there is a parallel yearning for more cohesion of purpose, for moral attitudes, an allergy to admass, to what Daniel Bell calls the “porno-pop culture” and the “psychedelic bazaar.”

This is perhaps saying no more than that all societies tend to secrete corrosive elements (though in only some societies do the rulers suppress them). Yet it is not trivial to generalize the “endogenous preference” argument by admitting that social states may generate both likes and dislikes. Otherwise, the endogenous generation of preferences would ceaselessly cement any status quo and historical change would become even more mysterious, incomprehensible and random than it is anyway.

[3. ]In the luxuriant literature that has sprouted around John Rawls’s Theory of Justice, 1972, no objection appears to have been raised against the “original position” on this ground. The participants in the original position are devoid of all knowledge of their particular persons. They do not know whether they are representative white Anglo-Saxon men or representative Red Indian women, tenured philosophers or welfare recipients. They do not even know the age they live in (though this seems hard to reconcile with their knowledge of “political affairs and the principles of economics”). They are induced to seek a “cooperative solution” to their existence (in game-theory terms), which can be summarily interpreted as agreement on a social contract for a just state.

Failing agreement, in leaving the original position they would exit into the state of nature. They seek to avoid this outcome, because they know enough about themselves and the state to prefer it to the state of nature. They know their “life-plans” whose fulfilment depends on command over tangible and intangible “primary goods.” They also know that the state, through the “advantages of social cooperation,” entails a greater availability of primary goods than the state of nature. In technical language, the participants thus know that they are playing a “positive-sum game” in bargaining for a social contract (which is just in the sense, and only in the sense, that everybody is willing to stick to its terms). This means that if the cooperative solution is reached, more primary goods can be distributed than if it is not.

The comparison of two bundles of primary goods, however, requires indexing, and the weights adopted for the index (for instance, the relative valuation of time off against real income), cannot help but reflect a logically prior preference for a type of society. In other words, people in the original position cannot say that the bundle of primary goods available in the state of nature (containing, for instance, much leisure) is smaller than that available under the state (containing, for instance, many tangible consumption goods) unless they already know that they prefer to live in civil society. Comparison of the state-of-nature bundle and the state bundle presupposes the very preference which it is employed and required to explain.

The state-of-nature bundle of primary goods contains more of the things which people living in the state of nature are used to and have learnt to appreciate. It is, for them, the bigger bundle. The converse is true of the bundle available under conditions of social cooperation. It is the bigger bundle for people who have learnt to like what it contains and not to mind its constraints. But can people in the original position really tell which bundle is bigger?

[4. ]Pierre Clastres, La société contre l’état, 1974; English translation, Society against the State, 1977.

[5. ]Ibid., ch. 11.


[7. ]Cf. C. B. Macpherson, The Political Theory of Possessive Individualism, 1962, p. 49, for the view that without unconditional ownership, there can be no market for land. The same argument must hold for any other “means of production,” including labour. (For Macpherson, no less than for Marx, the rot set in when the individual was acknowledged to own his labour and came to sell it rather than its products.) In Russia, service tenure of land meant that serfs (“souls”) could not, prior to 1747, be sold off the land because they were needed to maintain the landlord’s capacity to serve the state. The transferability of “souls” (hitherto regarded as managed by the landlord on behalf of the ultimate owner, the state) was a symptom of social progress, a sign that private property was taking root in Russia. The reader must bear in mind that the Russian nobility had no title to its lands prior to 1785 and that its service tenure was quite precarious. In view of the recent nature of private property as a social institution, the progress of capitalism in Russia in the short run-up to 1917 was most remarkable.



[10. ]The answer consistent with the capitalist ideology whose contours I am trying to sketch, might run like this: “Yes, a man should be left free to sell himself into slavery; there is no more competent judge than he of his reason for doing so.” The state has nonetheless the duty to withhold legal protection from the institution of slavery, contributing to its removal as an option available under contractual freedom. Contracts under which slave-traders sell captured Africans to slave-owners obviously violate the Africans’ rights. If plantation-bred third-generation slaves, for reasons which will always remain debatable but which are their reasons, do not seek freedom, we have to think again. Note that the British government first prohibited the slave trade without prohibiting slavery. The state must simply ensure that if he wants to walk off the plantation, he should not be prevented from doing so, i.e., it should not help enforce a contract under which the planter owns the slave. This is patently not an abolitionist position. It is doubtful whether it would have been an acceptable compromise to Calhoun and Daniel Webster.

[11. ]This assumes that the arrangement requires unanimity. If it does not, and the arrangement continues to produce its benefits after the withdrawal of the person who failed to get his way in bargaining, the well-known free-rider problem arises and might destabilize the arrangement. If the non-cooperator benefits as well as the cooperators, an incentive is created for the latter to defect. As each successive cooperator becomes a free rider, ever fewer cooperators carry ever-more free riders and the incentive to defect keeps increasing. Various devices, some practicable in some situations and others in others, can be conceived to hinder this outcome and give the arrangement some stability. (Cf. pp. 237-39.)

[12. ]The reader will have spotted that while one type of state would have an interest in proceeding as above, other types of state might want to do the precise opposite, to make their subjects appeal to them as frequently as possible; this may well coincide with the interest and the perhaps-unconscious wish of the legal profession. Laws breed lawyers who, in turn, breed laws.

[13. ]K. Marx, “The Eighteenth Brumaire of Louis Bonaparte,” in K. Marx and F. Engels, Selected Works in One Volume, 1968, p. 169.

[14. ]Locke, seeking to oppose Hobbes and to present a more palatable doctrine, saw that if people’s natural right was to remain inviolate (i.e. if the state was not to trespass upon property which, in turn, was coextensive with liberty), sovereignty could not be absolute. It had to be limited to the upholding of natural right (Second Treatise, 1689, section 135). Subjection of the executive to a strong legislature was to safeguard this limit.



[15. ]I submit that “prisoners’ ”; is preferable to the more usual “prisoner’s,” for the dilemma is always that of two or more persons and its essence is the fatality of mutual betrayal. It cannot ever be a game of solitaire.

[16. ]Hobbes’s dilemma is more natural and less rigorous than the one set up under the conventions of formal game theory and it should, much of the time, have a cooperative solution. In a formal game, the player must make his move all the way, he is not allowed pauses, feints or tentative half-moves whose second half depends on the equally tentative reactions, tâtonnements of the other player. In the state of nature a player, before even making a half-move, may make speeches, brandish his weapon, cajole, etc. Depending on the other player’s reaction or rather on his reading of it, he may walk away (if the other stands his ground), or strike a blow (either because the other looks about to strike first, or because he is looking the other way), or perhaps hear and consider an offer of Danegeld.

[17. ]In his remarkable Anarchy and Cooperation, Taylor rightly raises an eyebrow at Hobbes not applying to a state of nature composed of states, the analysis he applies to a state of nature composed of persons. This reproach looks particularly grave from an empiricist’s point of view: for a state of nature composed of states is available in the real world, while a state of nature composed of persons is a theoretical construct, or at least it was that for Hobbes and his readers who had no inkling of what modern anthropologists were going to find in remote corners of the world.

[18. ]J-J. Rousseau, Discours sur l’origine de l’inégalité parmi les hommes, 1755.

[19. ]I am borrowing this formulation from Raymond Boudon and Franç ois Bourricaud, Dictionnaire critique de la sociologie, 1982, p. 477. In attributing the crucial role in the creation of the problem to myopia, I have been preceded by Kenneth M. Waltz, Man, the State and War, 1965, esp. p. 168. Myopia can make the deer worth less than the hare because it is further away; the second hunter’s awareness of the first hunter’s myopia can induce the former to run off after a hare even though it is the latter who is too shortsighted to see the deer!

[20. ]To be led, by a scrutiny of the core structure of mutually advantageous cooperation, to the conclusion that Rousseau’s social contract has an insufficient basis in rational self-interest, is certainly unexpected. The theory of the social contract has always served as the rational foundation for the state, making mystical-historical foundations both of the pre-Reformation and the romantic-Hegelian type redundant. Part II of Ernst Cassirer’s The Myth of the State (1946) is entitled “The Struggle against Myth in the History of Political Theory,” and deals with the Stoic heritage in political philosophy, culminating in contractarian theory. In it, he writes: “if we reduce the legal and social order to free individual acts, to a voluntary contractual submission of the governed, all mystery is gone. There is nothing less mysterious than a contract.”

However, a contract which it is impossible to derive from the perceived interest of the contracting parties is mysterious, and presumably mystical in its genesis.

[21. ]“If, in a group of people, some people act so as to harm my interest, I may readily submit to coercion if this is the pre-condition of subjecting them to coercion” (W. J. Baumol, Welfare Economics and the Theory of the State, 2nd edn, 1965, p. 182). This statement is presented as enabling the state’s generally recognized functions to be logically derived from what its subjects want. It is not explained why the fact that some people act to harm my interest is sufficient to persuade me to submit to coercion (in order to submit them to it, too), regardless of the sort of harm they are doing to my interest, its gravity, eventual possibilities of a non-coercive defence, and regardless also of the gravity of the coercion I am submitting to, and all its consequences. Yet it is not hard to interpret history in a way which should make me prefer the harm people do to my interest, to the harm people organized into a state and capable of coercing me, can do to my interest.

[22. ]Leo Strauss, Natural Right and History, 1953, p. 169.

[23. ]Ibid., p. 169, note 5.

[24. ]Taylor, Anarchy and Cooperation ch. 3; David M. Kreps, Paul Milgrom, John Roberts and Robert Wilson, “Rational Cooperation in the Finitely Repeated Prisoners’ Dilemma,” Journal of Economic Theory, 27, 1982; J. Smale, “The Prisoner’s Dilemma and Dynamical Systems Associated to Non-Cooperative Games,” Econometrica, 48, 1980. For a broader review of the problem, cf. Anatol Rapoport, “Prisoners’ Dilemma—Recollections and Observations,” in Anatol Rapoport (ed.), Game Theory as a Theory of Conflict Resolution, 1974, pp. 17-34. The important point seems to be that the players must not be stupid and totally without foresight. Fairly alert, worldly-wise players will generally cooperate in iterated prisoners’ dilemmas. Cf. also Russell Hardin, Collective Action, 1982, p. 146.

[25. ]Prisoners’ dilemma and free riding are not just different words describing the same structure of interaction. The former imposes on each rational prisoner one dominant strategy, i.e. to confess before the other can betray him. This alone secures the least bad of two alternative worst-case outcomes (maximin). The free-rider problem imposes no dominant strategy, maximin or other. It is not inherently inconsistent with a cooperative solution. Where would the free rider ride free if there were no cooperative transport service?

To make it into a prisoners’ dilemma, its structure must be tightened up. Let there be two passengers and a bus service where your fare buys you a lifetime pass. If one passenger rides free, the other is the sucker and must pay double fare. Each likes free riding best, riding the bus at single fare second best, walking third best and riding the bus at the double fare least. If both try to ride free, the bus service ceases. As they choose one course of action for a lifetime, and independently of one another, they will both choose to walk, i.e. with this structure, the free-rider problem will work as a (non-iterated) prisoners’ dilemma and will be inherently inconsistent with the mutually preferred cooperative solution, i.e. a bus that runs.

The special “tight” feature, it will be remarked, is that free riding by one makes the fare unacceptably high for the other, leading to cessation of the service. In the “loose,” general form of the free-rider problem, there are many passengers and another free rider may not greatly increase the fare payable by the others, so that it may be rational for them to carry on paying. There is no perceptible penalty attaching to the role of the sucker.

[26. ]The allusions are to A. K. Sen’s “Isolation, Assurance and the Social Rate of Discount,” Quarterly Journal of Economics, 81, 1967.

[27. ]Robert Paul Wolff, Barrington Moore Jr and Herbert Marcuse, A Critique of Pure Tolerance, 1965.


[29. ]A relatively readable exponent of this Ableitung is Elmar Altvater. Several other contributors to the Berlin journal Probleme des Klassenkampfes employ a rather steamy prose through which, however, much the same contractarian motif of capital’s general interest (general will?) can be discerned. They are criticized (cf. Joachim Hirsch, Staatsapparat und Reproduktion des Kapitals, 1974) for failing to show why and how capital’s “general will” comes in fact to be realized in the historical process. This failure, if it is one, assimilates them even more closely to Rousseau. The criticism basically reflects the mystical character of contractarianism.

[30. ]Franç ois Furet, Penser la révolution franç ais, 1978. Both quotations are from p. 41.


[32. ]J. H. Hexter, On Historians, 1979, pp. 218-26.


[34. ]F. Engels, “The Origin of the Family, Private Property and the State,” in Marx and Engels, Selected Works, my italics.

[35. ]In “The Class Struggles in France,” Political Writings, 1973, p. 71, Marx points unerringly at the risk the bourgeoisie runs under elective democracy with a broad franchise. The latter “gives political power to the classes whose social slavery it is intended to perpetuate... [and] it deprives the bourgeoisie... of the political guarantees of [its social] power” (my italics). Once more, the young Marx recognizes reality, only to leave his brilliant insight unexploited in favour of his later, unsubtle identification of ruling class and state.

[36. ]V. I. Lenin, “The State and Revolution,” Selected Works, 1968, p. 271.

[37. ]In modern Marxist literature this has at least two alternative meanings. One corresponds to the “structuralist” view (notably represented by N. Poulantzas). Vulgarized, this view would hold that the state can no more fail to serve the ruling class than rails can refuse to carry the train. The state is embedded in the “mode of production” and cannot help but play its structurally assigned role. The other view would have the state choose to serve the ruling class for some prudential reason, e.g. because it is good for the state that capitalism should be prosperous.


[38. ]J. Foster, Class Struggle and the Industrial Revolution, 1974, pp. 47-8.

[39. ]Cf. Murray N. Rothbard, Power and Market, 1970 and David Friedman, The Machinery of Freedom, 1973.


[41. ]This is known in the trade as Arrow’s Impossibility Theorem, after its first rigorous statement by K. J. Arrow in Social Choice and Individual Values, 1951.

[42. ]Jon Elster, “Sour Grapes,” in Amartya Sen and Bernard Williams (eds), Utilitarianism and Beyond, 1982, has a penetrating discussion of what he calls adaptive and counter-adaptive preferences, and which bear some relation to what I call, in the present work, “addiction” and “allergy.” He insists on adaptation and learning being distinct, notably in that the former is reversible (p. 226).


Last modified April 13, 2016