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Market crash. Photo: Public Domain

Market crash. Photo: Public Domain

The state and the market are opposite sides of the same capitalist coin, writes Dragan Plavšić

Capitalism has always had two sides to its character: its private side i.e. the market, and its public side i.e. the state.

The private side of capitalism is the side capitalists prefer by instinct, because they want to be as free as possible to compete for profits on the market. This is typically accompanied by the ideology of free competition, individual rights, and the inviolability of private property. 

The public side of capitalism is the side capitalists prefer in times of need, when they suffer losses, for whatever reason. Then they turn to the state imploring it to convert private losses into public ones. This is typically accompanied by the ideology of ‘we’re all in it together’, the common good, and the nation. 

Capitalism has never been rescued by the market because the market cannot rescue capitalism. If left to its own devices, the logic of the market is corrective only at enormous human cost, so a logic that modifies selected market freedoms becomes necessary to rescue the market from itself. The state supplies this modified logic, especially in times of need, which is one reason why markets need states.

The Coronavirus crisis and Sunak’s wage rescue plan have once more exposed the necessary interrelationship of markets and states. The crash over a decade ago also did so, as states bailed out firms ‘too big to fail’ and pumped billions into the economy. 

And yet, despite this, it is common to encounter the view that markets and states are opposites. This reflects the standard view of capitalists who seek to be free of state interference. It is why some right-wing ideologues are questioning Sunak’s decision to nationalise the country’s wage bill.

But the common view also reflects the standard view of those on the left who regard the intervention of the state as a socialist antidote that modifies selected market freedoms for social reasons. This is why the TUC’s Frances O’Grady has showered praise on Sunak’s plan.

However, the market and the state are not opposites in the proper sense of the word; they are merely opposite sides of the same coin, which is not at all the same thing. 

It is in this light that we should consider our response to Sunak’s plan. Certainly, it is wrong to shower praise on it as O’Grady did, because we know Sunak’s goal is to save the market for better times. This is what we mean when we say that the state is the other side of the *same capitalist coin* as the market.

However, it is of critical significance that Sunak has been obliged to make inroads into how capitalism normally operates. This is what we mean when we say that the state is the *opposite side* of the same capitalist coin to the market, for its intervention into economic affairs marks yet another crisis the market cannot resolve without enormous, politically destabilising human cost.

The fact of this intervention therefore opens the door for socialists to argue not just for more extensive measures that address the immediate crisis - such as the nationalisation of private hospitals - but for a radically democratic transformation of the economy that puts power into the hands of those who work it. It is axiomatic, or should be, that state control without democratic control cannot take us in a progressive, socialist direction.

This kind of radical transformation is the alternative to the ‘back to the market’ dogma that motivates Sunak’s circumstantial statism. He has deployed the state merely to ensure the market survives a period of lockdown and emerges from the crisis better able to profit from its aftermath.

We can do better than this miserable return to the status quo ante.

Dragan Plavšić

Dragan Plavšić

Dragan Plavšić is a member of Counterfire in London and of Marks21 in Serbia. He jointly edited The Balkan Socialist Tradition and the Balkan Federation 1871-1915 (2003).

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