Market and State

I have taken the following from Capitalism: A Short History:

In the controversies that have surrounded capitalism, state and market are usually regarded as antipodes, and for good reason. Market action and governmental-political action are indeed beholden to different logics, especially in the democratic era. Each one has a different foundation on which its legitimacy rests: unequally distributed ownership rights on one side, equal citizenship rights on the other.

They follow different procedures: there one of exchange, here a process of debate with the aim of building consensus and deciding by majority…The pursuit of particular advantages is the clear goal of market action…Attainment of the general welfare, by contrast, is the aim of politics.

If you overlook the formal language – its not too hard to see that he is talking about one of the serious problems of our time.

We have many of them, and he is helping us to carefully untangle two of them.

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2 thoughts on “Market and State

  1. Thanks for your brief but thoughtful post. Although as you say the state and market are founded on different principles, they are surely inseparable from each other in order to produce the genesis and development of capitalism. A reasonably strong, centralised state at the national level promoted the development of a large market in many cases which promoted industrialisation and productivity growth, without which capitalism could not have appeared and continued to grow.

  2. Yes, the writer correctly points out that market forces and governmental forces follow different logics, but incorrectly posits them as anti/against each other. Two different systems can co-exist and indeed even make each other stronger. The writer approaches this with non-dualistic reasoning, one that sees things from a judgmental approach and in which one must be right and the other wrong–black and white thinking that has too often led us astray. Market and State help each other and their combination, democratic capitalism, has made the western world strong. Do we have our faults? Absolutely. Have we overcome some of the worst, most obvious faults of the past? Yes, but it is an ongoing process, a never ending process of progress. Shalom.

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