The State by Anthony de Jasay

by Anthony de Jasay

  Nevertheless, it is at least possible deductively to assert that only security of tenure provides the sufficient condition for the state

  bureaucrat, the corporate manager or other hired power-elitist to exercise discretionary power regularly and in significant conflict with the owner's interest. The corollary of secure tenure is that in delegating control, the owner has somehow awarded it for keeps and has lost the faculty of recall, i.e. he has lost control. The standard argument to this effect is that once ownership has become fragmented and many owners have delegated managerial power to a single tenant (a bureaucracy, a management), each owner has only an infinitesimal influence on the tenant's tenure, and insufficient motivation to shoulder the cost of mobilizing fellow owners for joint action. In technical language, the bureaucratic tenant is protected by an "externality."

  Precisely such an externality may protect a state from its unorganized subjects. The sheer money value of liberty to the subjects of a despotic state may be much larger than the money cost of suborning the praetorian guard, buying arms, copying machines or whatever it may take to topple such a regime. Yet no political entrepreneur would come forth and shoulder the cost if he considered it impracticable to recover it from the liberated subjects. He would lose his outlay if their liberty were an externality for which they could not be made to pay (except by enslaving them again).

  The most casual reader of the financial pages of newspapers knows, however, that there is no such obstacle to organizing revolt against self-serving or just plain unsuccessful corporate managements. The take-over bidder, conglomerator, "raider," "asset stripper," proxy solicitor have (despite the regulatory hurdles well-meaning authorities put in their way) several ways of "internalizing" some of the potential benefit accruing to the owners from the recall of the sitting management. These ways can

  be devious and unscrupulous, in keeping with the unscrupulous defences (such as "scorched earth," self-denunciation on anti-trust grounds and "saturation bombing" with frivolous lawsuits) put up by sitting managements to "protect corporate property" from shareholders at the latter's expense. All in all, "unfriendly" takeovers even in the face of desperate defences are often successful enough to shake the average hired management's confidence in its security of tenure.*69

  If the hold of the bureaucracy is precarious in the face of an unorganized multitude of dispersed owners, it is a fortiori precarious in the face of a single, concentrated owner. No externality protects the bureaucracy from the state it is supposed to serve. The discretionary power of a bureaucrat or a bureaucratic institution, no matter how important in the whole apparatus of the state, must not be confused with that of the state proper from which it is derived.

  Nor is there much excuse for falling into traps of the "good king, bad councillors" or conversely the "wicked lord, kind-hearted bailiff" type. The bailiff may be kind-hearted, close to the villeins and especially to any relatives he may have among them, but his personal interest is seldom so far divorced from that of the lord as to make him let off the serfs all that lightly. He, too, wants the manor to function properly as a going concern. The reason the bureaucracy on the whole does serve the state's ends is not only that it has to, on pain of losing its precarious place, but also that, except in rare and easily identified historical situations where state power has just passed to an invader, a usurper or at least a culturally alien contender, there is a large and genuine harmony between their respective maximands. The greater the discretionary power of the state, the more scope the bureaucrat is likely to have

  for the fulfilment of his ends. He need not have the same ends the state is striving to realize. It is sufficient that his ends should be non-competing or subordinated. A loyal bureaucracy will find much of its happiness in a strong state. It would take disloyalty, safety from being found out, or perhaps a credible excuse in terms of the "real," "long-term" interest of the state, for it to side with civil society against its master. The chance of imposing its own will on both state and civil society by acting the role of ruling class looks, for all these reasons, doubly remote.

  The true place and role of the bureaucracy in relation to the state were suggestively summed up by the historian Norbert Elias in what he called the Monopoly Mechanism. The state is the monopolist of "the army, land and money" while the bureaucracy is the body of "dependents upon whom the monopolist depends." Of course the dependents are important, of course their qualities, their human types are interrelated with the type of state which depends on them; in Elias's example, while the free feudal nobility went with an earlier type, a later one produced the courtly nobility.*70 In a less neat sequence, we might add the clerics, the lay legists and commoner court servants, the landless administrative nobility, Chinese mandarins, Prussian Junkers, French "enarques," American congressional staffers, dollar-a-year men and socialist party apparatchiks. Within each type, there is no doubt room for human variations leaving their stamp on the life of the society they help administer. Undeniably, they can lend socialism a human face, or an inhuman one. It is very much a matter of each subject's personal destiny what proves to be of greater import to him, the system or its face.

  For any schema of social explanation which runs in terms of classes, however, putting the bureaucracy or some rough

  equivalent administrative, managerial, insider, expert and authority-carrying category in the place of the ruling class is liable to prove confusing. Doing so is to attribute to such a category a durable and well-defined identity ("the New Class"?), a degree of discretionary power and a liberty of action which it can in general hardly possess. It is to lose sight of the political significance of the pattern of capital ownership, reducing it to irrelevance in terms of power over others. Finally, it is by implication to allot to the human qualities of this category an overriding influence on the quality of social life, as if the variable disposition and character of office-holders could altogether swamp the systemic constants which are the source of the power delegated to such offices. Confusion of this sort yields such gems of incomprehension as that a certain despotism was, or has resulted from, "bureaucratic distortion" or the "personality cult." If the system of state capitalism is to be thought of in traditional class terms, the role of the ruling class can only be ascribed to the state itself. This imposes no anthropomorphism and does not require the state to be personified by a monarch, a dictator or the party elders. Nor need it be identified with a specific institution, assembly, central committee or cabinet. More non-committally and generally, it is sufficient for the state (to adapt a famous phrase of Marx) to be armed force and capital endowed with consciousness and a will.*71

  5.2.24

  Author: Jasay, Anthony de Title: The State

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  5. State CapitalismOn the Plantation

  Money, markets and the habit of choice are best weeded out by shaping the social system as a well-run plantation.

  The universal employer, not content with pushing string, will have to end up owning his employees.

  Completing mastery over civil society in maximizing discretionary power can be seen as a chain of corrective moves, each one being aimed at making the social system both amenable to the state's purpose and internally consistent, although these two requirements are not necessarily or even probably compatible. Each corrective move is consequently capable of creating some new systemic inconsistency and of necessitating other corrective moves. This sequence drives in the political dynamics, such as it is, of state capitalism.

  The first and perhaps most decisive of these moves, whereby civil society is purged of decentralized capitalist ownership and the

  state becomes the universal owner and employer, removes the inconsistency between political and economic obedience involved in serving two masters. As I argued at the beginning of this chapter, however, the fusion of political and economic power into state power is in turn inconsistent with electoral competition for its tenure. Having to run for office would involve the unive
rsal employer in soliciting his employees to keep voting themselves more money for less work. The next corrective move, therefore, must be one from competitive to monopolistic politics, to match the corresponding changeover in the pattern of ownership. Classical "bourgeois" democracy needs to be transformed into socialist or people's democracy, or whatever else it may be called as long as it is a set of adequately enforced rules under which consent to the tenure of the essentials of power is not subjected to electoral tests.

  Under the resulting system, then, the tenant of the state is not menaced by recall; it cannot be unseated by non-violent means; it owns all capital, though its subjects continue to own their labour. Inconsistency, however, manifests itself again, calling for new moves, new adaptations of the social system.

  The state alone owning or hiring all factors of production, it must alone take (or delegate) all the who-does-what decisions, whereby inputs of capital and labour are allocated to produce various outputs. This is not only a responsibility but also a satisfaction; to direct resources to chosen uses, to cause certain goods rather than certain others to be produced, is a natural component of any plausible maximand, of any worthwhile employment of discretionary power. Its prosaic symptom is the state's (and its ideology's) treatment of "planning" as a coveted prerogative rather than a chore.

  Jointly with factor allocation, the state must make the matching distribution decisions. The two sets of decisions are mutually entailed. This is so if only because various people must be rewarded for performing various allotted tasks. (It is probable, though not certain, that the state as sole employer can get them to perform their tasks for less than private capitalists, competing against each other, would have ended up conceding. The relative wage under the two systems would depend, in part, on how much labour of what kind would be wanted under either arrangement. Our argument does not require that the particular "subsistence wage" which a rational monopsonist would agree to pay, should always be less than the wage competing capitalists would have offered.)

  The interdependence of the allocation and distribution decisions means that the two need be consistent and not that they are bound to be. If under the set of distribution decisions, wage-earners get sums of money to be spent as they choose, nothing ensures that they will choose to spend them on the stream of goods the set of allocation decisions is causing to be produced. There is no built-in mechanism stopping them from (unwittingly) repudiating the plan.

  Inconsistencies between the supply of goods and the demand it entails, manifest themselves differently under flexible and fixed prices. The symptoms under the latter-queues, quotas, black markets and (on the road to abundance) piles of leftover goods-seem to be less repugnant to socialist states than those under the former-waltzing prices. Regardless of its symptom, however, the inconsistency will subsist and react back on allocation and

  distribution, frustrating the state's plan. If it allocates workers to produce guns and butter, and they want more butter than they are producing, the sub-plan dealing with gun production will run into difficulties which may be only a little more (or is it a little less?) manageable if butter is rationed than if its price goes up.*72

  How, then, can consistency be ensured? "Market socialism" is the most frequently recommended solution. It amounts to adjusting output to what people want, in return for the effort they agree to exert in producing it. This can be done, without further ado, by banks of computers feeding on market research and production engineering, solving some very large number of simultaneous equations and using the results for enticing people into the activities which will produce the precise pattern of supply of goods which people engaged in those activities can usually be relied on to want. All that is required is that the equations should correctly express enough of the relevant relations between people's tastes, capacities and skills, the capital equipment and materials available and the known ways in which all possible inputs can be combined to produce given outputs.

  If this suggestion is ruled out as facetious, recourse could be had to real, non-simulated markets and to letting their feedbacks reconcile allocation and distribution. This is done (to summarize the workings of delicate mechanisms rather radically) by the touch of the invisible hand acting on some out of a large number of separate, decentralized decisions, each of which had best be relatively small. Under state capitalism, the marginal touch of the invisible hand can only perform what is expected of it, if the managerial bureaucracy is made severally to maximize the separate profits of a large enough number of "profit centres." This, in turn, means that bureaucrats must be exposed to the incentives

  and penalties dealt out by the sellers of labour and the buyers of goods, rather than by the state. Asked to serve two masters, the success of the bureaucracy would then depend on how well it served one of them.*73

  Bureaucrats would increasingly find themselves in the anomalous position of quasi-owners, deriving a measure of autonomy and security from the market success of the enterprises or profit centres they managed. No totalitarian state in its right mind can risk condoning such an evolution, the less so as the resulting political threat is to its tenure while the advantages of greater economic efficiency accrue in part, if not wholly, to its subjects. The on-again-off-again history of experiments with decentralization, markets, self-regulating mechanisms in the economic management of socialist states, is strong circumstantial evidence that totalitarian regimes seldom lose sight for long of the "primacy of politics." They do not, except in absent-minded moments, let their security of tenure be jeopardized for the sake of pleasing shoppers.*74

  Yielding to the temptations of market socialism would take care of the consistency of allocation with distribution through decentralized decision-making, inspired by money and markets. This, in turn, would generate a new inconsistency between the imperative need that people (including the managers) should be dependent on the state, and the economic mechanisms which would restore some independence to some of them.

  Any mechanism, however (even if it could be politically neutral and innocuous, in the manner of networks of docile computers), under which resource allocation is subjected to what people want,

  is at bottom a surrender of some of the state's hard-won power. The rational state, finally possessing and intending to hold on to the extensive power afforded by the joint monopoly of arms and capital, should seek a method of adjustment involving no such surrender. Rather than letting junk food, porno-pop video, amphetamines, socially wasteful private motorcars and other deleterious trash be produced because people wanted them, it can produce "merit goods" and cause people to want them instead.*75

  Adjustment to the resource allocation the state wants must then take place, if at all, through the bending of people's tastes, mode of life and character to what they are offered. It may be a slow process to make them actually like, say, wholemeal flour, national defence, Schönberg's music, sensible hard-wearing clothes, public transport (and no traffic-choking private cars), fine government buildings and fully standardized housing. While letting time and habit do such slow work as they will, the state can advance more rapidly towards these objectives through a short cut. It can directly attack the habit of choice itself, from which many of its troubles are derived, by no longer paying people with the universal voucher, money.

  Having money provides wide scope for choice and trains people in its exercise. Specialized vouchers you can only spend on a much narrower class of goods, only on lunches, the education of children, transport, vacation accommodation, medical care and so on, restrict the scope of choice; they also help unlearn the habit. As a perhaps secondary convenience, they render consumer demands somewhat easier to predict for planning purposes. More fundamentally, they transfer part of the power over the disposal of incomes from the recipients to the state, which can within reasonable limits vary the "mix" of vouchers and can,

  consequently, shape the kind of life people will live. Vouchers, therefore, provide direct satisfaction to the state which wishes to hav
e its subjects live in a particular way, say healthily, for whatever reason, because it is good for them to be healthy, or because they work and fight better when healthy, or because it just values health.

  Anything special vouchers do, the truck system will do better. A luncheon voucher or a food stamp at least leaves the choice of the actual food, and an education voucher the choice of school, to personal whim. It recognizes and to some extent even encourages a consumer sovereignty of sorts. Factory and office cafeterias, a range of basic and nourishing foodstuffs at giveaway prices, an allotted dwelling, the sending of children to a designated school and the sick to a specific dispensary, remove some of the remaining occasions for choice and affirm the state's prerogative to decide. Life for the subject becomes simpler, its conundrums fewer and his communal (as distinct from individual and family) existence more all-embracing.

  Beyond paying people less money and more selected goods, lies the limiting case where they are not paid at all, but just get their specific needs provided for by the state. Exclusion, with people's access to goods regulated by the money or vouchers they earn, is then replaced by free access: subway tickets are abolished, hospitals do not charge, there is free milk, free concerts and free housing (though not everybody gets all the houseroom he would like), and certain goods which people need but do not want, such as safety helmets or edifying printed matter, are given away to all comers pending the time when all have to come and get them. The frontier between public goods and private goods, ill-marked at the best of times, becomes unguarded, and state planning displays a