State Power Is An Illusion

If power extends to all level of societies and does not exist in any single person or entity, and if government has only been appropriated to a limited degree by the state, how, then, are we to understand the state when we commonly think of it as a "container for power," the seat of government?

"The" state has a dual nature. First, it is a site of coordination (real or symbolic) and intersection of various institutions whose primary existence lies beyond the state. It is in this sense, also, that the state is not a source of power. For example, the activity of any health-related state agency only secondarily derives from the work of "outside" medical and public health institutions, both national and international.

Second, the state is a tool of enforcement of the regional boundaries (involving territory, resources, and citizenship) and constraints to competition that help to sustain profitability in the global economy. The explanation of this claim requires a slight tangent.

Capitalist producers increase their rates of profit by maintaining competition within certain bounds. Too much competition drives down prices below the level that is necessary for capitalist investment, while too little competition makes it difficult to maintain a rate of profit much above the total social average rate of profit (since this can only occur to the extent to which rivals can be forced below the social average rate of profit).

Uneven development (regional, sectoral, etc.), by creating inequalities, is a key means of regulating competition in this way. The state promotes regional unevenness in a global arena to enable profitability for some by:

1. Regulating imports and exports
2. Monetary regulation (interest rates, money supply, credit, international exchange rates)
3. Subsidizing national industries
4. Regulating wages and employment rates (and thereby, production costs and demand)
5. Financial/corporate regulation

The goals of such regulation include:

1. Expanding its share of the global market
2. Increasing exports
3. Decreasing imports
4. Reducing the relative value of the currency

Without state intervention, competition would render any sustained capitalist accumulation (and hence, investment in new technology) impossible. "The state" serves as a vehicle for erecting regional constraints to competition, and it is, furthermore, a vehicle that is managed and controlled by a spate of conflicting capitalist interests. In this sense, as well, the state is more of a tool than a source of power.

"The state," therefore, is not a unified whole. Its nature is heterogeneous and the foundation of its power is diffused beyond its bounds.

It does not make sense to speak of "bigger government" and "smaller government." If it refers to the scope of the governmental/regulatory functions of the state, the "size of government" is only a reflection of the expansion of governmental institutions in general, which extend beyond the state. If it refers to state budget/spending, this is a particular economic strategy, necessary to the development of capitalism. Moreover, since "the state" is not a single, unified object, it does not possess a "size" that can increase or decrease.

In sum, the nature and form of "the state" is only a reflection of other social-economic conditions and its power is derived from other social forces.