Erik Olin Wright on the Role of the State, the Market and Civil Society

Erik Olin Wright, from a 2007 text in ‘Compass Points’:

Capitalism would be an unreproducible and chaotic social order if the state played the minimalist role specified in the libertarian fantasy, but it would also, as Polanyi argued, function much more erratically if civil society was absorbed into the economy as a fully commodified and atomized arena of social life. Pure communism is also a utopian fantasy, since it is hard to imagine a complex society without some sort of authoritative means of making and enforcing rules (a ‘state’). Feasible, sustainable forms of large-scale social organization, therefore, always involve some kind of reciprocal relations among these three forms of power.

Today, few socialists believe that comprehensive statist central planning is a viable structure for realizing socialist goals.

Nevertheless, statist socialism remains a component of any likely process of social empowerment. The state will remain central to the provision of a wide range of public goods, from health to education to public transportation, and in spite of the record of central planning in the command economies, it could also be the case that efficient and democratic forms of central planning over certain kinds of goods production may be viable at some point in the future, under altered historical conditions. The crucial question for socialists, then, is the extent to which these aspects of state provision can be placed under the effective control of a democratically empowered civil society. In capitalist societies, typically, public goods provision by the state is only weakly subordinated to social power through the institutions of representative democracy. Because of the enormous influence of capitalist economic power on state policies, often such public goods are more geared to the requirements of capital accumulation than social needs. Deepening the democratic quality of the state is thus the pivotal problem that will have to be solved in order for direct state provision of goods and services to become a genuine pathway to social empowerment.

Many will be sceptical about the possibility of achieving this. The failure of command-and-control bureaucracies in both state-socialist and capitalist economies has fuelled calls for the privatization of state services, not for their democratization. Yet a range of innovative designs provide reason to believe that more energetically participatory forms are possible, especially at the local and regional level, and that these can enhance both the effectiveness of public goods provision and the accountability of democratic institutions. In Brazil, the system of participatory budgeting developed during the 1990s involved large numbers of ordinary citizens and secondary associations in real decision-making over city budgets, and especially over state production of local public goods. While it lasted, the participatory budget contributed to a significant redirection of infrastructure investment by the local state towards the needs of the poor and working class.

Socialism is an economic structure within which the means of production are owned collectively by the entire society and thus the allocation and use of resources for different social purposes is accomplished through the exercise of what can be termed ‘social power’. Social power is rooted in the capacity to mobilize people for cooperative, voluntary collective actions of various sorts in civil society. This implies that civil society should not be viewed simply as an arena of activity, sociability and communication, but also of real power. Social power is contrasted to economic power, based on the ownership and control of economic resources, and state power, based on the control of rule-making and rule-enforcing capacity over a given territory. Democracy, in these terms, can be thought of as a specific way of linking social power and state power: in the ideal of democracy, state power is fully subordinated and accountable to social power. Democracy is thus, inherently, a deeply socialist principle. If ‘democracy’ is the label for the subordination of state power to social power, ‘socialism’ is the term for the subordination of economic power to social power.”

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