One of the things I’ve been noticing as I delve deeper into the economic sociology literature is just how much sociologists take the existence of the state for granted. In most cases, the state is omnipresent in modern society because we could not have markets in its absence. Many Marxists, for example, take a functionalist approach to the state in capitalist societies. Everything the state does, it does to support capital accumulation or capitalism as a system. For this reason, many Marxists will explain both regulation and deregulation in terms of the needs of capitalists. I find this either contradictory or conceptually vacuous (akin to Freudian psychology where everything boils down to penis envy or the Oedipus complex). But even more mainstream sociologists take a similar view. From Polanyi-inspired sociologist Fred Block’s work on embeddedness to institutionalist Neil Fligstein’s political-cultural approach to markets, everybody assumes a central role for the state. Historically, this is empirically valid for most cases but it runs into many problems conceptually.
The claim often made is that we could not have markets without states. Empirically, this does not hold up to history (see Powell and Stringham for a comprehensive survey). Historically, markets have almost always preceded states. This doesn’t necessarily mean that markets spring out of nowhere (as goes the argument against various neoclassical strawmen). Indeed, markets do need institutions but this is a far stretch from needing a state. Doug North defines institutions as humanly devised constraints that shape human interaction. According to North, “The major role of institutions in a society is to reduce uncertainty by establishing a stable (but not necessarily efficient) structure to human interaction.” hey can be both formal and informal, purposely constructed or evolved over time. North is careful to point out a difference between institutions and organizations. The former are the rule of the game while the latter are the players.
And this is where most economic sociologists go wrong. They conflate the rules (institutions) with the state (an organization). The state is an important organization but it is by no means the only one. There’s no reason why institutions could not spontaneously arise or be constructed by the actors themselves and enforced through some other kind of organization to enhance cooperation. The assumption of an omnipresent state limits our ability to engage in the kind of comparative analysis which is so important to sociological research. There’s been no lack of research looking at how markets take shape under different institutional constraints imposed by the state but little done looking at the shape of markets in the absence of a state. This severely limits our knowledge of what markets “need” to thrive, their effects on different actors (especially the politically marginalized), and our ability to construct more fair and efficient institutions. As Schumpeter says in his famous essay on fiscal sociology, “Altogether, there is nothing which could not be a ‘general’ or ‘public’ affair, once the state exists; and nothing which must fall within the ‘public’ or ‘state’ sphere in the sense that we could not otherwise speak of a state.” As Schumpeter makes a comeback among sociologists, it’s best we heed this advice.
- Josh McCabe
If it walks like a duck… In general, I like the thrust of this argument. To me it leads straight to Foucault and his critique of our conflation of the concepts of power, the state, and the sovereign. Foucault’s point (one of his points) is that power is much more diffuse (and productive) than simply the repressive apparatus of the state conceptualized as a unitary actor (the sovereign). I think Econ Soc could do more to nuance our understandings of both power and the state, and I think you are pointing to one of the reasons why that rethinking matters.
So, to get back to your argument: How are you defining the state? If you have organizing institutions backed up by some sort of enforcement system, do you have a state in effect if not in name? Is a market without any sort of coercive system possible? Is that the same thing as the state? Etc.
“And this is where most economic sociologists go wrong. They conflate the rules (institutions) with the state (an organization).”
Good Point! I happen to think that many social scientists simply do not make the crucial distinction between “Governance” and “Government.”
Echoing Dan Hirschman, Gene Callahan somewhat flippantly wondered why Peter Leeson’s book The Invisible Hook wasn’t instead a story about the inevitability of government, remarking that each ship was in effect a mini government.
I tend to define a state as Weber did: A monopoly on the legitimate use of force in a given territory (though I’m not entirely comfortable with Weber’s definition). This would eliminate several coercive organizations from statehood. Somolia is not a state because there’s no monopoly on violence. The mob, gangs, and other criminal enterprises are not states because they’re not territorially-based (nor legitimate in many cases). As Cody points out, there are special cases which blur the line. Do pirate ships and Disney World count as states? They fit the above criteria, so maybe we have to add “noncontractual” to Weber’s definition.
That said, we could indeed have some sort of institution back up by a nonstate enforcement. Axelrod’s Evolution of Cooperation provides several examples and Avner Grief’s work provides another historical example, Language is an institution without an enforcement organization (at least in the US). The most obvious example is our current global system. We don’t have a “world state” yet its still largely peaceful and international trade happens everyday. As North says, its not always efficient, but its stable and it reduces uncertainty so people can act.
What is an extremely useful concept, of course, is the idea of “civil society.”
As Edward Shils once defined it:
“The idea of civil society is the idea of a part of society which has a life of its own, which is distinctly different from the state, which is largely autonomous from it . . . The hallmark of a civil society is the autonomy of private associations and institutions as well as that of private business firms . . . A market economy is the appropriate pattern of life in a civil society.”
(Edward Shils, ‘The Virtue of Civil Society,’ in “Government and Opposition” (Winter, 1991) pp. 3-20.)
In civil society there is no longer a single focal point in the social order, as in the politicized society in which the state, designs, directs and imposes an agenda to which all must conform and within which all are confined. Rather, in civil society there are as many focal points as individuals, who design, shape and direct their own lives guided by their own interests, ideals and passions.
In civil society, every individual belongs to numerous voluntary associations and institutions. He forms or joins new ones as new interests and ideals develop during his life, and withdraws from others as his inclinations and circumstances change; and the associations and institutions to which individuals belong modify their goals and structures over time as the members revise their purposes and discover new rules more effective in achieving the ends of the organizations.
Each individual, therefore, simultaneously participates in a variety of “social worlds” with different people, with each of those social relationships representing different purposes and needs in his life. And cumulatively these various social worlds of civil society, with all the relationships within each of them and between then, create what Friedrich Hayek called the spontaneous social order.
Hayek called it a “spontaneous order” because the institutions, associations and activities among men that are the elements of this order are not the result of any prior central plan or regulated design; instead, they arise, evolve and maintain themselves as a result of the independent actions and interactions of the members of society.
This should represent, in my opinion, a central element in sociology as a “science of society,” that attempts to theoretically and historically understand the communities in which men live, interact, and develop meanings in their lives.
The State (as an organization in society possessing that legitimized monopoly authority to impose and enforce both “laws” and “commands”) has been, historically, a part of the social order (for good or bad). But it should be viewed as one of the organizational elements that has developed in (or imposed itself upon) society. Rather than “the” organization in the context of which all other human relationship exist, get their orientation, or permitted purpose.
Sociology as a “science of society” based on the foundational conceptions of individual human action, should not be considered and studied as the “science of the State,” with individuals and those associations and relationships of civil society “dependent variables” of the political authority.
Richard Ebeling
Ok, I’m reading the Powell and Stringham piece and I just hit their empirical section and I think their fuzzy definition of a state is making me lose interest. The first example of a market organized without an effective state is the NY diamond merchants who are organized around ethnic/religious lines (Orthodox Judaism). But, first of all, they still exist within the context of the larger state + economy. And more importantly, there is plenty of power and authority within the community. So, I’m not exactly sure how this example is supposed to show off the ability of a market specifically, or property rights more generally, to exist sans the state. Maybe the U.S. federal or New York state governments play a small role (though they are still present, for example, if someone were to employ violence), but there are plenty of power and authority structures. So is this just a name game? Are these just stories about how actors not labeled as “the state” can serve as sufficient authorities to create credible enforcement mechanisms (e.g. ostracization) to make exchange possible?
Ok, probably should finish at least skimming the article…
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