Hi. Welcome to the site. Please check out the About Us, and if you have a question about crime and/or punishment, perhaps look at some previous questions along those lines first.
Welcome to Anarchy101 Q&A, where you can ask questions and receive answers about anarchism, from anarchists.

Why does capitalism rely on the State?

+8 votes
asked Mar 28, 2010 by Saint_Schmidt (2,450 points)
i like apio ludds answer, but i feel this simple one answers the question just as well, and speaks to the visceral fears that people have:

if it weren't for the state, then capitalism would be destroyed by the actions of individuals almost instantaneously. People would see things that they wanted/needed and just take them because they know that they won't get shot or go to jail. Then, unfortunately, bands of people would start protecting stockpiles of food/possessions with guns...but many of those people would die and abandon their posts as well because they will realize their leaders can't give them anything.

4 Answers

+4 votes
Best answer
Because, being based an an accumulation of capital (i.e., wealth) into the  hands of a few people at the expense of the rest, it requires the accumulation of power into the hands of a few people operating through a system of institutions of domination in order to protect the accumulation of wealth. This system of institutions of domination is what constitutes the state, and without it, the accumulation of capital necessary to capitalism would be implausible, if not impossible, simply because people wouldn't be that likely to put up with it.
answered Mar 28, 2010 by apio ludd (1,190 points)
Capitalism and the state have nothing to do with each other. The state is a COMPULSORY political group which claims "authority" over a geographical territory AND which claims the sole "right" to initiate force. .. free market capitalism is an economic system in which individuals or groups can privately own property in the "means of production," and participate in free trade (free from coercion, voluntary trade, hopefully o.O).
the most greedy capitalists become socialists/communists/fascists/politicians when they realize they can play to everyone's belief in "government" to get them to fork over their money and property.. and if they don't, the state will initiate force.
Part I:
Anarcho-capitalism requires a ridiculous revision of both anarchism and capitalism. Anti-capitalists (including anarchists) have used the terms "capitalist" and "capitalism" since the early 19th century to describe a parasitic class that monopolizes access to a society's means of production and extracts surplus value from those who can support themselves only by laboring for others (via profit, interest and rent beyond cost), arising from a history of dispossession, confiscation, and repression in the phase of "primitive accumulation" at the hands of the state on behalf of the owners. Mutualist anarchist Kevin Carson makes this latter process of Enclosures clear in his essay, “The Iron Fist Behind the Invisible Hand” http://www.mutualist.org/id4.html Learn ye some history before ye speaketh.

Past and present, IN THEIR OWN WORDS:

Capitalists have desired hierarchical relations of authority:
1. “Hitherto that principle (of cooperation) has been applied in England only by associations of workmen, but the Rochdale experiments, important and successful as they were, were on one or two points incomplete. They showed that associations of workmen could manage shops, mills, and all forms of industry with success, and they immensely improved the condition of the men, but then they did not leave a clear place for the masters.” [*The Spectator*, London, May 26, 1886, p. 569.]
Part II:
Capitalists have desired wealth through exploitation:
1. "It would be easier, where property is well secured, to live without money than without poor; for who would do the work? ... As they ought to be kept from starving, so they should receive nothing worth saving. If here and there one of the lowest class by uncommon industry, and pinching his belly, lifts himself above the condition he was brought up in, nobody ought to hinder him; ...but it is the interest of all rich nations, that the greatest part of the poor should almost never be idle, and yet continually spend what they get... Those that get their living by their daily labour... have nothing to stir them up to be serviceable but their wants which it is prudence to relieve, but folly to cure... To make the society happy and people easier under the meanest circumstances, it is requisite that great numbers of them should be ignorant as well as poor..". [Mandeville, Fable of the Bees]

2. "That mankind in general, are naturally inclined to ease and indolence, we fatally experience to be true, from the conduct of our manufacturing populace, who do not labour, upon an average, above four days in a week, unless provisions happen to be very dear... I hope I have said enough to make it appear that the moderate labour of six days in a week is no slavery... But our populace have adopted a notion, that as Englishmen they enjoy a birthright privilege of being more free and independent than in any country in Europe. Now this idea, as far as it may affect the bravery of our troops, may be of some use; but theless the manufacturing poor have of it, certainly the better for themselves and for the State. The labouring people should never think themselves independent of their superiors... It is extremely dangerous to encourage mobs in a commercial state like ours, where, perhaps, seven parts out of eight of the whole, are people with little or no property. The cure will not be perfect, till our manufacturing poor are contented to labour six days for the same sum which they now earn in four days". ["Essay on Trade and Commerce" (1770)]

3. "[E]very one but an idiot knows that the lower classes must be kept poor, or they will never be industrious." [Arthur Young]
4. "[Among] the greatest of evils to agriculture would be to place the labourer in a state of independence". [Gloucestershire Survey (1807)]

5. “According to other commentary in the Board of Agriculture reports of the time, Enclosures would force laborers 'to work every day in the year,' and cause children to 'be put out to labour early'; the 'subordination of the lower ranks of society... would be thereby considerably secured.'”
[Kevin Carson, Studies in Mutualist Political Economy, Fayetteville, Arkansas, Booksurge, 2007, chapter 3.]

6. “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.” [Smith, Adam. The Wealth of Nations. Book V, Chapter I, Part II, 775]

7. “Whenever the legislature attempts to regulate the differences between masters and their workmen, its counsellors are always the masters.” [Smith, Adam. The Wealth of Nations. Book I, Chapter x, Part II, pg.168]

8. “Monopoly of one kind or another, indeed, seems to be the sole engine of the mercantile system.” [Smith, Adam. The Wealth of Nations. Book IV, Chapter VII, Part Third, pg.684]

9. “What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little, as possible. The former are disposed to combine in order to raise, the latter in order to lower, the wages of labour.

It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily: and the law, besides, authorises, or at least does not prohibit, their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work, but many against combining to raise it. In all such disputes, the masters can hold out much longer. A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks, which they have. already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year, without employment. In the long run, the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.

We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and, one may say, the natural state of things, which nobody ever hears of. Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy till the moment of execution; and when the workmen yield, as they sometimes do without resistance, though severely felt by them, they are never heard of by other people. Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen, who sometimes, too, without any provocation of this kind, combine, of their own accord, to raise the price of their labour. Their usual pretences are, sometimes the high price of provisions, sometimes the great profit which their masters make by their work. But whether their combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands. The masters, upon these occasions, are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen. The workmen, accordingly, very seldom derive any advantage from the violence of those tumultuous combinations, which, partly from the interposition of the civil magistrate, partly from the superior steadiness of the masters, partly from the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence, generally end in nothing but the punishment or ruin of the ringleaders.”
[Smith, Adam. The Wealth of Nations. Book I, Chapter VIII, Part I, pg. 27-28]
what "capitalist" FORCES you to work for them????????????????????????????????????????????????????????
"“Monopoly of one kind or another, indeed, seems to be the sole engine of the mercantile system.”  mercantilism is not free market capitalism...

mercantile in general...

i would dispute the claim that is inherently monopolistic..
without threat/use of violence/coercion/the state/"government," people, and yes groups would have a greater deal of autonomy..people will grow and trade food and other goods just as they always have..they will always trade (labor AND capital & consumer goods) and therefore create/constitute an "economy" .. but, without the state extorting everyone and basically claiming it owns all land (through force) and throwing up/selling to whatever/whoever it's catering to at the time, regulating and taxing everyone, causing small local and even larger "capitalists" to go bust and lose "their" property to the government (or transfer tenancy to some other "capitalist"), drying up local "community economies," putting people out of business, etc.. people wouldnt be coerced, extorted, or out-competed by corporate, state created giants in the first place..

basically without coercion/extortion of the state, or it's corporations (at times backed by a never ending supply of money demanded under threat of violence- which itself has much to do with people going bust/being broke in the first place), monopolies would have a much more difficult time arising because people would not be being coerced/extorted (at least not by the only institution which claims it has the right to.. a notion with which most people seem to agree) into losing "their" land/ selling their businessess. if some "rich capitalist" came around and tried to buy everything up.. people could just not sell...

and, i'm not sure how anyone or any group can have a monopoly on goods/services anywhere at any time.. how can anyone have "exclusive control" over any service or trade, anywhere? that's the same as thinking "government" brings "order.." or "controls" ANYTHING.... or has a "monopoly on violence/force." (yeah, i know they claim they do.)
or come anywhere close to making it as if they have "exclusive control" without the use of force..

but, if someone gets what seems to be a "monopoly" without the use of force/"govt" intervention/backing, etc... how is that "bad" ? the company COULD decide to charge everyone extortionate rates... and then nobody would pay/use their services/the serfs would rebel, etc...

if people/groups are trying to maintain monopolies by force, fraud, violating rights, etc.. then they are doing the same thing every "government" does... claiming to rule you and ALL LAND.
"4. "[Among] the greatest of evils to agriculture would be to place the labourer in a state of independence". [Gloucestershire Survey (1807)]"   - aaaaaand not being able to own any productive property, land, farm, etc. . .. leads to independence how exactly?
"a parasitic class that monopolizes access to a society's means of production and extracts surplus value from those who can support themselves only by laboring for others "  - that's the "government" ! only the "government" demands "value" (time/money) from EVERYONE.... other than their corporatists buddies.. since they write their own laws and get them passed.. all of this stuff you're talking about.. coercive monopolies, exploitation, appropriation of land by force.. is almost entirely dependent on the "government" or thebelief in "authority." without the "government," who would wage war for those "capitalists" ? can black water declare war? can black water ceo say "everybody has to pay for our 'protection' services, and if you don't we're going to initiate violence against you" ? can any capitalist or businessman do that? they need 'government'. .. they need people to believe in 'authority.' none of this has anything to do with free market capitalism... those tyrannical actions and "classisms" are put into play by the most greedy "capitalists..." the ones who become socialists and imperialists and use "govt," force/violence to appropriate people's land and "means of production" to make them LESS INDEPENDENT.. ... to prevent YOU from having any land/capital! how can you ever aim to be independent if you don't have any land/capital?!

(and of course that marxist "exploitation" is just plain nonsense. if you don't like the wage, don't fucking take it. nobody is FORCING YOU TO WORK FOR ANYONE. you want the "full product of your labor"? YOU MAKE AND TRADE YOUR OWN COMMODITIES OR OFFER YOUR OWN SERVICES. then "govt" comes around and demands a cut of what you got! not a "capitalist"!  to "govern" = "to rule over by (so-called) 'right of authority'... "govt" is ruling class!)

you had stuff/money before you were "forced" to work for "capitalist..." y/n?
you receive something in trade which you did not have before by trading/selling your labor to "capitalist"... y/n?
you benefit from trading your labor to "capitalist" - y/n?

"capitalist" shows up at your house and demands you work for them, y/n?
"capitalist" shows up at your house if you work for different "capitalist" or even on your own and demands cut of what you got in trade under threat of violence, y/n?
RbBf-- there is no other meaningful option besides wage labor, so yes, the conditions of life without selling our labor force us into a labor market that most often pays the bare minimum.
"To describe a parasitic class that monopolizes access to a society's means of production and extracts surplus value from those who can support themselves only by laboring for others"

Who can ONLY support themselves by laboring for others? This is 2015. not the 1900's

Plus you cant honestly claim to know what every anarchist was thinking in the 19th century. I bet there were different school of thought on it just like there are now, albeit not as well defined or modern.

The operative word there of course being MODERN.
+4 votes
separating capitalism and the state is not really possible if we take a historical point of view. In what is known as Italian city-states such as Venice or Florence, the richest merchants had obviously easier access to the governing Prince and so artisans and rural pesants less. This close relationship between economic elites and political elites guarantee each other privilege over the rest of society and so obviously determine economic and political power for future generations and the priorities of the state.

The question of so called "development" and "underdevelopment" can show this relationship clearly. The strongest contemporary global powers such as the United States, the states of Western Europe, Japan and China have all strong well established states just as well as strong weatlhy capitalist economies. Even though these countries preach "free trade" on "third world countries" they achieved "development" through strong state intervention in legal systems, infrestructure, education, protectionist tarrifs to foreign imports in order to develop a local industry and also to create strong local markets. Strong Modern States have developed alongside strong National capitalist economies.

On the contrary the weakly established states such as those of subsaharian africa have poor wealth in capitalist standards because of important sectors of the territory not really being in control of the state and as such capitalist economic growth and development cannot happen because of lack of infrastructure, the people not accustomed or prepared for capitalist behaviors culture and needs, legal guarantees to profits and investments not being good enough to atract capitalist investors either local or foreign, etc

¿Why subsaharian africa is the place of the weakest capitalist development in the world? Because it is the place of the world that gained independence from colonialism the latest behind Asia and Latin America.  As such a country like Angola gained independence only in the late 1970s and then imperialist interests played geopolitical games after independence helping armed conflicts continue but when we enter the 1980s the world was already being driven into the neoliberal consensus and so away from "post-war" developmentalism. Then no wonder they have weak states and weak capitalist economies. Even a place like Latin America which gained independence in the 19th century has problems such as a 40 years or more civil war in Colombia. In Latin america a racist white eurocentric elite thought its history has not been interested in developing a strong national economy but only in gaiing big profits for itself from agriculture, oil and mining from trade with developed countries and so it is the place in the world with the worst inequality in the world.

I am aware that all this sounds like mainstream economics talk but it is true. Of course multinational corporations can gain big profits in Sweden and in Nigeria. An oil company in a central asian or subsaharian state will have strong guarantees for its operation since it will benefit governments and high ranking bureaucracies and so these will mobilize all the police and even the army to guarantee an oil extraction operation. This is why I talked about in the beggining about the obvious easyness of access for a French Oil company to the top government officials but where the oil operation takes place, most likely the economy will stay as subsistence family agriculture and small artisan and small commerce, and so as a non-capitalist economy. If the peasants are an obstacle to the oil company, the government will take these obstacles away from its path.

And so a single capitalist like this uses the state just as a wider capitalist develpment of a territory needs a state to guarantee development. Private secutiry can guarantee your capitalist "investment" a profit only up to a point. A population of a small town opposed to an oil or mining extraction operation can be a serious threat to a capitalist operation through many forms of sabotage if not outright blocking of a specific site and as such this is when private secutiry is not enough and an army or a national police force has to come into operation. In a place like Chile Mapuche Indians have burned Wood Industries buildings sucessfully but nevertheless those enterprises have entered their territories because the Chilean state sends its army and police and puts in jail the mapuche direct action saboteurs.

"Development" can be seen as an accumulation of such capitalist operations which lead to a capitalist economy and away from only an specific capitalist operation. History has shown that the state has ben an integral agent in capitalist development and a lack of state leaves a place in a "pre-capitalist" or non-capitalist situation.
answered Sep 6, 2011 by iconoclast (3,380 points)
edited Sep 6, 2011 by iconoclast
what does "imperialism" have to do with free market capitalist economics?
I think you maybe have to ask that as a new question altogether mr. or mrs. neoliberalism since it is very off topic and I will say kind of strange even. As I see it i find it strange that a follower of neoliberalism comes to an anarchist forum to get a personal doubt answered. As I know there are a lot of specific neoliberal forums on the web that you might prefer.
Good thing past fails doesn't dictate the future.

You lost me in your first paragraph.
+1 vote

I think that what is fundamental to understand is that the State defines the laws that govern property rights. There is a lot of minute detail that goes into this. For example, the State defines what happens to property after someone dies (their estate), what kinds of property there are, how various forms of property can be taxed, etc. If you take land law, for instance... usually the Sovereign State is the only entity with absolute property rights to land. Everyone and everything else (think, Banks) is merely granted certain, tiered rights by the State. 

Ok, so capitalism isn't defined the same way by everyone. Some people (especially its most vocal advocates) define it by the prevalence of market exchanges. Some people define it by the private ownership of the means of production and a class society that encourages propertyless citizens to sell their labor power for wages. Et cetra. One way or another, it's the State that writes the rules of economy by dictating rights to property. Significantly, one of the things that the State does to make capitalism possible is that it sets the legal foundation for a market in labor power... the right of someone to buy and sell your time, to hire and fire you, and at what rate of pay. Not a market in laborers, which was what slavery was. But a market in labor power. The State also backs a national currency that facilitates such a market.

Additionally, by defining the rights to industrial technology the way that most states have... as something that can be bought and sold in the market ...states make it possible for the centralized control of such technology in the private hands of various people and institutions. The important thing here is that the State could just as well define the rights to said industrial technology in other ways. They could make industrial technology a form of property that only the Sovereign State has rights to, as they do with some forms of land and other forms of property. Socialists are for this "Nationalization" of the means of production. They basically want the State to make industrial technology a utility governed however the state they're citizens of is governed.

Anyway... the answer to your question is that it's difficult to imagine stateless peoples regulating their relationships to property in such a way that they would produce a form of capitalism. It's very much an economic technique that states use to accumulate wealth (and power) for themselves. Now that the Cold War is over, this isn't such an obvious point. However, the underlying argument you'll get from most Cold War-era anti-communists are exactly about how much wealthier those states are that use capitalism than those that nationalized the means of production. It's also evident that capitalism is a technique of the State when you look at imperialism, or the globalization of trade, or the history of primitive accumulation. Capitalism is really good at motivating citizens to compete with each other to produce more wealth for the State ...the State, who taxes them.

I like to keep in mind that I'm not a Socialist because my fight against capitalism isn't just a fight against the laws that the State protects governing the relevant properties of capitalist systems. My fight against capitalism isn't a fight for the State to pass new laws that remove some property from the private sector and make it a national utility. As an anarchist, my fight against capitalism is just one aspect of a fight against the existence of the State.

answered Mar 22 by Squee (2,430 points)
edited Mar 22 by Squee
to me, this is actually a very clear answer
+1 vote
Other people have given the traditional answer to this question, which is essentially an empirical observation that the state's role in e.g., enclosure, colonization, the suppression of labor movements, the everyday enforcement of laws governing property, etc., has contributed to the development and reproduction of capitalism.

I think this is a true observation, but I don't find the thrust of the argument very convincing at all. I don't think it demonstrates that capitalism depends upon the state in any necessary way.

I also don't think one could demonstrate this. If I were to say something like, "capitalism cannot exist without the state," I think I would be getting the relationship backwards, since I think the state is an epiphenomenon of capital and not the other way around.

Furthermore, I think the state could quite possibly be among those forms that capital is rendering obsolete. I actually don't at all see why capital couldn't one day rule the entire planet without states - which does not necessarily mean "without law" or "without police." It might necessitate the creation of new kinds of supra-national bodies that we can't yet imagine, or it might mean that governance will become more individualizing.

In any case, for me the problem with the anarcho-capitalist notion of "liberating" capitalism from the state isn't really that it's logically impossible even to imagine, or something like this. Quite the opposite: it's exactly the kind of thing you would think of if your imagination was as limited as it was barbaric.
answered Jun 9 by asker (9,230 points)
edited Jun 9 by asker
i have two questions/points, in response to your post, asker,

a. that the state is a necessary step in the development of a stateless capitalism (this doesn't especially challenge your point, on the face of it)

and what seems counter to that question, but i think is actually a corollary

b. what makes a state (this could challenge your point).

i agree that i can imagine the fading away of nation (geographically based) states, and the rise of businesses as how people organize their loyalties, etc, but that doesn't mean that there is no state, just that the foundation of it is different.

(i also have some question in there about people internalizing the state at this point, but maybe that's too broad a definition of state, and should be called something else.) i appreciate the provocation...
I'm definitely agreeing with you about (a.) – that the state seems to have been necessary in the development of capitalism so far without guaranteeing anything about its future development.

About (b.) – it makes more sense to me to think of the state as being a historically specific form.

Like, I suspect you'd agree that tribal and feudal forms are very different things than states even though they are also ways of organizing exploitation.

If we make "state" a catch-all for anything we can recognize as doing that, then this is a problem for my argument. But more importantly I think it puts us in a very awkward position because then we're saying 1.we're against it, and 2. as far as we can tell it's transhistorical.