Social democrats and the state

In the Marxist tradition, it is generally believed that at a certain stage of economic development, the state should “wither away” (Friedrich Engels wrote in “Anti-Dühring” that under socialism “the interference of the state power in social relations becomes superfluous in one sphere after another, and then dies away of itself… The state is not ‘abolished’, it withers away”¹), as if the state were a biological object rather than a political one. Supporters of anarchic theories or certain libertarian theories also advocate for the abolition (or gradual termination) of the state in one way or another. For example, in his classic work “Statism and Anarchy”, Mikhail Bakunins maintained that every state produces despotism and slavery, and the proletariat, having taken possession of it, must immediately destroy it². Furthermore, on the website of the Libertarian Party of Russia, on the page explaining the ideas of libertarianism, it is stated that the state is a “great fiction” and that it is inefficient, which means it should be either minimized or eliminated³.

As a result of all this, the reader may have heard numerous jokes on the topic of “how the courts will work under anarcho-capitalism”. These jokes are equally relevant to another stateless system — communism. This article will show why Marxism, anarchism, and libertarianism propose to reverse objective processes instead of advancing development, depriving society of an instrument that, while dangerous if misused, is nevertheless useful and effective.

What is the state

As the Great Russian Encyclopedia notes, science and international law still do not possess a single and universally recognized definition of the concept of a “state”. The encyclopedia itself states that it is a “politically and territorially sovereign organization of public power that has a special apparatus of management and coercion, capable of making its decrees mandatory for the population of the entire country”⁴. According to Ozhegov’s dictionary, one of the definitions of a state is “the primary political organization of a society that manages it and protects its economic and social structure”⁵. The Encyclopaedia Britannica discloses the question as follows:

State, political organization of society, or the body politic, or, more narrowly, the institutions of government. The state is a form of human association distinguished from other social groups by its purpose, the establishment of order and security; its methods, the laws and their enforcement; its territory, the area of its jurisdiction or geographic boundaries; and finally by its sovereignty. The state consists, most broadly, of the agreement of the individuals on the means whereby disputes are settled in the form of laws⁶.

Finally, a sociological dictionary, in our view, defines the term most objectively. The state is a set of institutions governing a specific territory, which possesses the capacity to make laws regulating the behavior of people within that territory, and is supported by revenue from taxation⁷.

Functions of the state

The very first and core function of the state, which follows even from its definitions, is ensuring and maintaining the rule of law. If a state performs this task poorly, it can be concluded that it is incompetent and failed. Ensuring and maintaining the rule of law includes the drafting, adoption, and improvement of laws, as well as ensuring the operation of the judicial and law enforcement systems so that they conform to the principle of equal rights and notions of justice (issues we analyzed previously) and effectively protect the citizens of the state from manifestations of injustice. The laws adopted by the state must actually function and be enforced on its territory.

The second function is creating, maintaining, and developing social infrastructure. As is well known, infrastructure is a combination of specific forms, methods, and processes, as well as structures, buildings, and all kinds of communications that provide general conditions and the normal functioning of economic, social, environmental, and other areas of society’s vital activity, its reproduction, and development⁸. To put it more simply, social infrastructure can include highways, playgrounds, city cleaning, public transport, and so on.

The third function is ensuring and protecting democratic institutions. As the textbook “Foundations of Social Democracy” notes, democracy requires a strong society (state) capable of ensuring all its members the opportunity to participate in social processes⁹. This function is directly connected with the first one. Representative democracy is impossible without the state, since the representative bodies formed by elections constitute part of those institutions that create laws in accordance with the definition of the state we provided above.

The fourth function is defining and implementing a strategy for the country’s economic development. Through the redistribution of capital, public investment, and credit policy, the state steers the economy into either a right or a wrong direction, carrying out the developed strategy of economic development. This strategy can lead a country to prosperity, or it can lead to stagnation or backwardness.

The fifth function is social security. The state can provide its citizens with old-age and disability pensions, free education and medical care, provide financial assistance to victims of cataclysms, and so forth. We wrote about this in more detail in the article on social democratic economics. This is very important — as the scientific and educational portal of the Higher School of Economics notes, the level of happiness in a society depends on the social policy of the state. For a high level, it is necessary to conduct a highly effective social policy¹⁰.

The sixth function is protection against external threats. The state must conduct foreign policy and build an army in such a way that, in the event of military aggression by neighboring states or criminal groups/organizations, citizens suffer minimal losses. True, some states consider themselves entitled to engage in military aggression in order to derive a benefit from it.

The seventh function is environmental protection and implementing policies that would contribute to nature conservation and ensure the country’s compliance with high environmental standards.

Naturally, the core function of the state is to ensure a balance among the seven primary functions specified above. It is for this purpose that funds collected from taxes or other sources of state revenue are allocated. Of course, there are also states that handle their functions poorly.

Moreover, as noted by the well-known economist and Cambridge University professor Ha-Joon Chang, the functions of the state do not end with those listed above. There can be quite a lot of them:

Today the government produces an mind-bogglingly diverse range of outputs: defence, law and order, infrastructure, education, research, healthcare, pension, unemployment and child-care benefits, old-age care, social assistance for poor people, and cultural support (e.g., running museums and national monuments, subsidizing the national movie industry). The list can go on¹¹.

The practice of state withering and absence

So far, world practice has shown that wherever processes aimed at weakening the state approached its withering away, they led to a catastrophe for social life. Famous economists Daron Acemoglu and James Robinson wrote that a strong and centralized state is one of the institutions that provides the foundation for the development of other institutions, although it can be used in two directions — either to build extractive institutions, which leads to the enrichment of elites and the poverty of the rest of the population, or to build inclusive institutions, which leads to economic prosperity (we wrote about institutions in more detail here). Those human communities that did without a centralized state at all failed to achieve the proper development of institutions as such, and were therefore supplanted by societies with a strong and centralized state. The absence of such a supreme arbiter usually leads to clashes between factions and clans, which are sometimes armed.

Also critical is a sufficiently centralized and powerful state. This is most clearly seen by contrast with the East African nation of Somalia. As we will see later, political power in Somalia has long been distributed among different factions. With no single player powerful enough to control the others and enforce rules on what they can and cannot do, society is divided among warring clans, none of which can become the dominant force. The power of each clan is limited only by the power of the next. Such a distribution of power in society leads not to inclusive economic institutions but to chaos, which is inevitable in the absence of a minimum amount of political and thus state centralization. The state cannot provide the minimum level of order necessary for the economy and trade to develop, or even for the basic security of its citizens.

Max Weber, whom we encountered in the previous chapter, provided the most famous and widely accepted definition of a key attribute of the state: the “monopoly of the legitimate use of physical force” in society. Without this monopoly and the level of centralization it entails, the state cannot perform its role as guarantor of law and order, let alone provide public goods and encourage and regulate economic activity. When the state fails to achieve a minimum of political centralization, society sooner or later descends into chaos, as it has in Somalia¹².

The authors also examine the example of two neighboring African tribes — the Lele and the Bushong — who shared similar cultural and geographical conditions, yet the Bushong were significantly wealthier than the Lele, managed to adopt and utilize more complex technologies, and achieved far greater success in the area of law and order, unlike the Lele, for whom even walking to a neighboring village alone often carried the threat of attack or abduction. At the same time, until 1620, when a man named Shyaam led a revolution and unified the Bushong, the lives of the latter were practically indistinguishable from those of the Lele. Shyaam and his followers created a bureaucracy to collect taxes, a system of laws, and a police force necessary to ensure that subjects obeyed the law. Nevertheless, no one elected Shyaam or his heirs, so the successes of their policies were noticeable only when contrasted against their neighbors, who lacked a centralized state¹³. As for the processes of state withering away, one of the few instances known to historical science was observed in the Maya civilization. Here is how Acemoglu and Robinson describe it:

This pattern is typical of the collapse of the Maya civilization: the political institutions that had provided the context for trade and agricultural expansion and population growth suddenly ceased to exist… Once the political institutions collapsed, the process of state centralization reversed, economic crisis ensued, and the population quickly shrank.

<…>

The archaeological evidence does not reveal an exact answer to the question of why the k’uhul ajaw were overthrown, why the elite around them lost power, and why the political institutions that had underpinned the Maya Classical era collapsed. We know that this was bound up with the escalation of violence inside the cities themselves. A plausible explanation is that the opposition inside cities (perhaps a faction inside the elite itself) arose and internecine warfare began.

Though extractive institutions allowed the Maya cities to reach a certain degree of prosperity and the elite to become rich and build magnificent architecture and unique art pieces, the system was inherently unstable. The extractive institutions that enriched a narrow elite created immense inequality and, even more important, intensified the struggle for control over resources among different factions. This conflict eventually led to the collapse of the Maya civilization¹⁴.

Summarizing their study on the reasons for the wealth of nations, Acemoglu and Robinson state that there are several obvious factors that increase the likelihood that the process of political empowerment necessary for prosperity will begin. These include the presence of a certain level of centralization of state power (so that the success of social movements challenging the existing regime does not lead to immediate anarchy)¹⁵.

A Pulitzer Prize nominee and George Polk Award winner, journalist Matt Hongoltz-Hetling also wrote the book “A Libertarian Walks Into a Bear: The Utopian Plot to Liberate an American Town (And Some Bears)”¹⁶. It describes a real case where, in the early 2000s, many libertarians moved to the town of Grafton as part of the Free State Project to build freedom from the state there and promote free-market laws in courts and town meetings. They managed to cut the town’s already small annual budget of $1 million by 30 percent. As Hongoltz-Hetling notes, potholes in the asphalt began to multiply, domestic conflicts became more frequent, the number of violent crimes rose, municipal workers started turning off lights, and a robust Randian private sector never arrived to replace public services. Moreover, the journalist himself learned about Grafton by observing headlines about bear attacks on people and households, noting an incredible surge of them in Grafton. Upon investigation, it turned out that some residents freely fed the bears, as regulation of these actions, as well as protection from bears, was practically non-existent. Meanwhile, libertarians accused each other of statism and wrong libertarianism, and people who feared bear attacks began walking the streets with weapons.

Meanwhile, the dreams of numerous libertarians ended in different ways — some dramatically, others quietly. The property development enterprise known as Grafton Gulch (named after the dissident enclave in Ayn Rand’s Atlas Shrugged) went under. Pastor John Connell was never able to get a tax exemption, went broke, and found himself unable to pay for electricity at his church. In the middle of a brutal winter, he heated the church with candles, and subsequently died in a fire. Adam Franz abandoned his survivalist commune, which soon walled itself off like a prison complex, presumably the better to enjoy Freedom. And John Babiarz, an early inaugurator of the project, became the target of relentless vilification by his former ideological fellows, who did not appreciate his statist refusal to let them enjoy uncontained blazes on a highly flammable afternoon¹⁷.

The process of weakening state institutions, which could likely be observed during their withering away, we witnessed in some countries of the post-Soviet space in the 1990s. For instance, the former President of Georgia and ex-Governor of the Odessa Oblast, Mikheil Saakashvili, said regarding the capacities of the Ukrainian authorities that “the state has no resources because, by and large, there is no state in Ukraine, no state institutions”¹⁸. Candidate of Economic Sciences Maria Snegovaya confirms that for the countries of the post-Soviet space, the weakness of the state turned out to be a particularly urgent problem¹⁹. In 1997, the President of the Russian Federation Boris Yeltsin wrote to the Federal Assembly:

In 1992, Russia had only one way to save its economy from collapse: to trust the energy of economic freedom. However, due to the weakness of power, lack of skill, and mistakes, side effects were not slow to manifest themselves. Market relations captured spheres where they are contraindicated. When “free buying and selling” extends to the adoption of laws, the actions of officials, and court decisions, it is not only immoral, but mortally dangerous for society and the state.

An effective market economy is not only freedom of private initiative, but also a strict legal order, uniform, stable and strictly observed by all rules of economic activity. The task of the state is to establish these rules and ensure their implementation.

<…>

The Chechen crisis revealed our common problems: the weakness of new state institutions, the fragmentation of power and society in the face of real threats²⁰.

Why the withering away of the state is irrational

As we have already noted in our articles, people possess different thoughts and views, some of them are selfish, and this should be accepted as a given. Attempts to remove selfishness from human nature will most likely lead to totalitarianism and will not solve the problem. And if a selfish part of people remains, then it is logical to expect that in a stateless society it will try to take advantage of the absence of this tool of suppression and achieve economic benefits through the use of organized violence. This logic is confirmed by outbursts of violence after the fall of the k’uhul ajaw or the rampant banditry in Russia in the 1990s²¹. In addition, the absence of the state makes the creation of monopolies possible (we examined this in a separate article). An influential monopoly can afford to create and maintain an armed organization to protect its interests. And then the dystopia from the second part of the “Back to the Future” trilogy will not look like something unfeasible:

In the event of the state withering away, it is also not entirely clear who will assume the execution of the state functions we have outlined and why they would perform them. Anarcho-capitalists believe that ownership even over infrastructure should become private (thus, David Friedman in “The Machinery of Freedom” writes that “there are practical difficulties with transferring the existing system of public streets and highways into private hands”²²). This will create a special position for those into whose hands falls the infrastructure necessary for a normal life that has no adequate alternative or any alternative at all — for example, bridges or water supply. Their owners will gain the opportunity to set a price above an adequate cost, which can lead to conflicts up to armed clashes (the same Friedman admits that conflicts will be inevitable even between law enforcement agencies²³). It is also unclear what force will protect against cartel agreements, who will guarantee that private armies will not engage in racketeering, and so on.

The left, on the other hand, has no clear idea at all of what a stateless structure will be like. Usually, a system of direct democracy is seen as an alternative, but we analyzed why representative democracy is much more effective and egalitarian. Some propose replacing the state with a system of councils (we also analyzed the failure of this attempt), and transferring natural monopolies to workers’ collectives. However, in this case, it is unclear who will regulate the growth of inequality between cities and workers’ collectives, and who, again, will be the supreme arbiter in conflicts. Will workers’ collectives, with weapons in hand and risking their lives, defend this property of theirs against organized crime groups? Ha-Joon Chang notes that without the general consensus that the state provides, few people will be motivated of their own free will to initiate the performance of those functions that the state performs today:

Public goods include things like roads, bridges, lighthouses, flood defence systems and other infrastructure. If you can drive on a road without paying for its construction, why would you, as a car owner, voluntarily contribute money to build another road? A lighthouse cannot selectively block its light to your ship because you didn’t contribute to its construction and maintenance, meaning that any ship owner can let others pay for it and still use it.

So, if you can freely shift the burden of paying for public goods to other people, you have no incentive to pay voluntarily. If everyone starts thinking this way, no one will pay for them, and this means that public goods will disappear altogether. At best, major consumers will provide an insufficient amount of such goods, because it is more profitable for them to let others use them than not to have them at all. A large company that is a leader in its field may build a road and let others use it for free if the absence of a road costs its business too much. However, even in this case, the road’s capacity is determined by the company’s needs, not society’s; therefore, from a social point of view, it may be sub-optimal. For this reason, it has become widely accepted that a sufficient amount of public goods is created only if the government taxes all potential users (which often means all citizens and residents of a city) and uses the funds raised, either by providing the public goods itself or by hiring a provider to supply them²⁴.

If in anarchic theories the weakening of the state leads to the absence of suppression and oppression, in reality it leads to a deterioration in the performance of the seven social functions of the state we have outlined, which are carried out by the latter, and to a threat from organized crime. The delusions of the proponents of the abolition of the state stem from the fact that they mistakenly understand the core nature of the state — as an instrument of suppression by the elites of the entire remaining part of the citizens. With the establishment of extractive institutions, it indeed serves as an instrument of suppression and oppression, but with the establishment of inclusive institutions, it performs important and useful social functions. Therefore, if an extractive state exists in a society, it does not mean that the state should be abandoned — it means that the state should be changed.

The state is also an instrument capable of curbing the growth of inequality, redistributing capital through taxation and leveling the budgetary potentials of regions. In the absence of a state, it is not entirely clear who will establish uniform rules for everyone and control their execution, or who will regulate the growth of inequality among citizens and regions.

To believe that all economic problems are generated by the state is a systemic error. Unquestionably, the state has its own failures (including during market corrections). They can, in particular, partially explain the emergence of the Washington Consensus itself. But this does not mean that the potential of the state should be abandoned. Therefore, the common task lies in simultaneously improving both the functioning of the market with the state and their coordination links²⁶.

The state and its problems

As we have already mentioned, when extractive institutions are built, the state turns into an instrument for suppressing the broad masses and enriching the elites, genuinely taking on that almost demonic image attributed to it by anti-state movements. For instance, in Marxism, the state is considered an instrument of the ruling class for suppressing other classes (“the state is nothing but a machine for the oppression of one class by another”²⁷). This is true, but only for those countries where inclusive institutions are weak and the level of democracy is low. As Chang notes, “many governments have done damage to their economies, sometimes catastrophically. However, the state is still the most powerful organizational technology that humanity has invented, meaning that it is very difficult to achieve major economic (and social) changes without it”²⁸.

In countries like the Scandinavian nations, by contrast, the state acts as a guarantor of democracy and a high standard of living — it is difficult to speak of suppression and oppression where the broad masses are well-off materially and possess extensive freedoms. For example, in Sweden, the average monthly salary of a firefighter in 2019 was 32,800 SEK (approximately $3,730), and that of a primary school teacher was 35,200 SEK per month²⁹ (approximately $4,000, whereas the average teacher’s salary in Russia was 40,000 rubles per month³⁰, which is just over $500). Most residents of many countries, including Russia, would dream of such “oppression”. But, as a rule, the state is an instrument of oppression precisely in those countries, rather than in and of itself. And the possibility of building extractive institutions, their presence, and the extreme difficulty of dismantling them constitute the core problem of the state.

The second problem of the state is that when a public sector of the economy exists, it can sometimes be difficult to make it work efficiently. However, the public sector and nationalization are a different issue, which we examined in more detail in another article.

How are the problems that the state can create solved? The necessary foundation for making the solution of problems possible is the creation of institutions of democracy, which we described in this article. In themselves, they are not yet a guarantee for choosing the correct vector, since various forces can win elections, including inefficient ones or a political force that dismantles democratic institutions. However, without democracy, solving the problems of the state is impossible.

Conclusion

We can summarize that today, demands for the withering away or abolition of the state are irrational and unrealistic, and it is extremely difficult to imagine a viable scenario for implementing these demands in the future; therefore, progressive social democrats can hardly support these demands, and should not include them in their ideological and programmatic documents. The state must not be abolished; it should be controlled by the instruments of democracy and by the broadest possible participation of the masses in its activities.

1. K. Marx and F. Engels. Works. Second Edition. Volume 20. – 827 p. – M.: State Publishing House of Political Literature, 1961. – p. 292.
2. M.A. Bakunin. Selected Works, volume 1. – 320 p. – Petersburg: “Golos Truda” Book Publishing House, 1919. – p. 295-296.
3. Libertarianism // Libertarian Party (libertarian-party.ru). [Electronic resource]. URL: https://libertarian-party.ru/libertarianism (accessed: 26.10.2020).
4. A.S. Avtonomov, V.A. Popov. State // Great Russian Encyclopedia. Volume 7. Moscow, 2007, pp. 542-545. [Electronic resource]. URL: https://bigenc.ru/ethnology/text/2373590 (accessed: 26.10.2020).
5. S.I. Ozhegov, N.Y. Shvedova. Explanatory Dictionary of the Russian Language: 80,000 words and phraseological expressions / Russian Academy of Sciences. V.V. Vinogradov Russian Language Institute. – 4th ed., expanded. – 944 pp. – M.: “A TEMP” LLC, 2006. – p. 141.
6. State // Encyclopaedia Britannica (www.britannica.com). [Electronic resource]. URL: https://www.britannica.com/topic/state-sovereign-political-entity (accessed: 26.10.2020).
7. N. Abercrombie. Sociological Dictionary: Translated from English / N. Abercrombie, S. Hill, B.S. Turner; edited by S.A. Erofeev. – 2nd ed., revised and expanded. – 620 p. – M.: “Ekonomika” Publishing House JSC, 2004. – p. 92.
8. A.A. Tkachenko. Infrastructure // Great Russian Encyclopedia. Volume 11. Moscow, 2008, p. 499. [Electronic resource]. URL: https://bigenc.ru/economics/text/2016338 (accessed: 26.10.2020).
9. Tobias Gombert, Julia Bleesius, Christian Krell, Martin Timpe. Foundations of Social Democracy – p. 62. // Friedrich-Ebert-Stiftung (www.fes.de). [Electronic resource]. URL: https://library.fes.de/pdf-files/akademie/07650.pdf (accessed: 26.10.2020).
10. Happiness depends on the social policy of the state // National Research University “Higher School of Economics” (iq.hse.ru). January 17, 2014. [Electronic resource]. URL: https://iq.hse.ru/news/177668431.html (accessed: 26.10.2020).
11. Ha-Joon Chang. Economics: The User’s Guide / Ha-Joon Chang; trans. from English by E. Ivchenko; [scientific ed. E. Kondukova]. – 322 p. – M.: Mann, Ivanov and Ferber, 2015. – p. 261-262.
12. Daron Acemoglu, James A. Robinson. Why Nations Fail. The Origins of Power, Prosperity, and Poverty / Daron Acemoglu, James A. Robinson: [translated from English by Dmitry Litvinov, Pavel Mironov, Sergey Sanovich]. – 575 p. – Moscow : AST Publishing House, 2015. – p. 94.
13. Ibid., pp. 154-156.
14. Ibid., pp. 170-171.
15. Ibid., pp. 500-501.
16. Matthew Hongoltz-Hetling. A Libertarian Walks Into a Bear: The Utopian Plot to Liberate an American Town (And Some Bears) – 288 p. – New York: Public Affairs
17. Patrick Blanchfield. The Town That Went Feral // The New Republic (newrepublic.com). 13 October 2020. [Electronic resource]. URL: https://newrepublic.com/article/159662/libertarian-walks-into-bear-book-review-free-town-project (accessed: 6.12.2020).
18. Saakashvili declared Ukraine’s unreadiness for the crisis unlike Russia // RBC (www.rbc.ru). 22 March 2020, 4:18. [Electronic resource]. URL: https://www.rbc.ru/rbcfreenews/5e76baf69a79478d09113555 (accessed: 26.10.2020).
19. Maria Snegovaya. The Curse of a Weak State // Vedomosti (www.vedomosti.ru). 5 August 2014, 00:17. [Electronic resource]. URL: https://www.vedomosti.ru/opinion/articles/2014/08/05/proklyatie-slabogo-gosudarstva (accessed: 26.10.2020).
20. Order in power – order in the country (on the situation in the country and the main directions of policy of the Russian Federation) [Text] : Message of the President of the Russian Federation to the Federal Assembly from 6.03.1997 // Rossiyskaya Gazeta. – 1997. – March 7.
21. Viktor Luneev. Crime and Punishment in Russia // Demoscope Weekly (www.demoscope.ru). [Electronic resource]. URL: http://www.demoscope.ru/weekly/2006/0239/tema05.php (accessed: 26.10.2020).
22. David Friedman. The machinery of freedom. Guide to a radical capitalism. Second edition // David D. Friedman (www.daviddfriedman.com). [Electronic resource]. URL: http://www.daviddfriedman.com/The_Machinery_of_Freedom_.pdf (accessed: 26.10.2020).
23. Ibid.
24. Ha-Joon Chang. Economics: The User’s Guide / Ha-Joon Chang; trans. from English by E. Ivchenko; [scientific ed. E. Kondukova]. – 322 p. – M.: Mann, Ivanov and Ferber, 2015. – p. 251-252.
25. Ibid., p. 248.
26. S.A. Korablin. The Washington Consensus: then and now. – Scientific Journal “Economy of Ukraine”, No. 11 (664). — 2017. — p. 24.
27. K. Marx and F. Engels. Works. Second Edition. Volume 22. – 805 p. – M.: State Publishing House of Political Literature, 1962. – pp. 200-201.
28. Ha-Joon Chang. Economics: The User’s Guide / Ha-Joon Chang; trans. from English by E. Ivchenko; [scientific ed. E. Kondukova]. – 322 p. – M.: Mann, Ivanov and Ferber, 2015. – p. 266.
29. Average monthly salary by occupation, 2019 // Statistics Sweden (www.scb.se). [Electronic resource]. URL: https://www.scb.se/en/finding-statistics/statistics-by-subject-area/labour-market/wages-salaries-and-labour-costs/wage-and-salary-structures-and-employment-in-the-primary-municipalities/pong/tables-and-graphs/average-monthly-salary-by-occupation/ (accessed: 26.10.2020).
30. Mishustin suggested refining the methodology for calculating the average salaries of doctors and teachers // TASS (tass.ru). [Electronic resource]. URL: https://tass.ru/obschestvo/9025921 (accessed: 26.10.2020).