The rebirth of the market state

Recent events have brought into question the durability of the ‘market state’, a system of political protection over a system of economic transaction. The state, by outlawing war, makes possible a system of peace through trade. At least, that’s the idea. But the US-China trade war put into question states’ ability to maintain peaceful trade with each other, while coronavirus temporarily brought down the system of world trade, and the subsequent lockdowns have produced a series of supply bottlenecks that threatens the monetary basis on which commercial transactions rest. The market state is in trouble. But it is not dead yet. Indeed, it is being reborn, through its excesses.

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In a previous post, I distinguished Hobbes’s ‘market state’, which protects the system of trade from the ravages of war, from Marx’s ‘capitalist state’, which protects the interests of a class of investors, whose power derives from their shares in financial markets, founded on borrowing and lending rather than just buying and selling. The goods that are bought and sold in these markets are bonds, not just physical commodities. Financial commodities now constitute a central basis for contemporary capitalism, which has pivoted from the market state to the capitalist state, from a system of trade to a system of debt. Now it seems that one particular class exercises so much control over the state that the market as a whole, like the state as a whole, ceases to matter. ‘Private men,’ as Hobbes warned, have now captured the state. The public sphere is robbed, looted, pillaged. The private sphere is enriched and corrupt, and the contagion has spread to the whole of society, incensed by the mythic power of capital, beyond the more simple magics of commodity production and market transaction.

But the market state is not so much suppressed by this transformation as it is protected by it. In the movie Split, multiple personalities emerge to protect the threatened, traumatised self underneath. These personalities seem at war with each other, and indeed culminate in a violent ‘beast’ to inflict unthinking violence on all those who do not share in the self’s trauma. But the personalities also share a fundamental goal: to protect the self underneath. From what is the self being protected? Ironically, the personalities exist to protect the self from itself. The market state, similarly, risks jeopardising its own conditions of possibility by continuously trading goods that do not make for smooth transaction, and through eventually running out of resources to trade. The capitalist state resolves this problem by expanding the market to ever-new spheres, and through splitting the market into the underlying institutional matrix and the superstructure of market manipulators, from financiers to monopolists and the oligarchs who run and own the biggest companies. ‘Split’ narrates the paradox of the self protecting itself, from itself, by pitting parts of itself at war with each other, and with the rest of the world. The capitalist state, in many ways, reflects this transformation of peace to war, which exists, ironically, to safeguard the hope of peace — just as the split personalities exist to preserve the integral unity of the basic self.

The peace of the market state is thus reborn in the war of the capitalist state. In its death, the market state is reborn, but it is also threatened by the ghosts it produces in its sleep. But the market state, like the self in Split, remains the sleeping sovereign of the system as a whole. These phantoms which dart across the scene, from powerful corporations to billionaire entrepreneurs, are naught when compared with the might of the Leviathan underneath. The market state is dying, but it is being reborn. When it emerges from its slumber, reality will be stripped bear of fantasy, and the sword will be removed from its sheath. If we wish to avoid the market state at war, then we must hope not only to lift the veil on the market disorder underneath the capitalist chaos, but also to transform this first order into something more resembling the principles of justice at the heart of every human being. Perhaps then, the market state may sleep peacefully, and we may build a better world in its wake.

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