Table Of ContentFundamentals of Pure and Applied Economics
THE STATE AND THE
ECONOMY UNDER
CAPITALISM
FUNDAMENTALS OF PURE AND
APPLIED ECONOMICS
EDITORS IN CHIEF
J. LESOURNE, Conservatoire National des Arts et
Metiers, Paris, France
H. SONNENSCHEIN, University of Pennsylvania,
Philadelphia, PA, USA
ADVISORY BOARD
K. ARROW, Stanford, CA, USA
W. BAUMOL, Princeton, NJ, USA
W. A. LEWIS, Princeton, NJ, USA
S. TSURU, Tokyo, Japan
MARXIAN ECONOMICS II
In 3 Volumes
Marxism and "Really Existing Socialism" Nove
II Development and Modes of Production in Marxian Economics
Richards
III The State and the Economy under Capitalism Przeworski
THE STATE AND THE
ECONOMY UNDER
CAPITALISM
ADAM PRZEWORSKI
First published in 1990 by
Routledge
Reprinted in 2001 by
Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
Transferred to Digital Printing 2007
Routledge is an imprint 0/ the Taylor & Francis Group
© 1990 Routledge
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These reprints are taken from original copies of each book. in many cases
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British Library Cataloguing in Publication Data
A CIP catalogue record for this book
is available from the British Library
The State and the Economy under Capitalism
ISBN 0-415-26990-3
Marxian Economics II: 3 Volumes
ISBN 0-415-·26987-3
Contents
Introduction to the Series vii
Introduction 1
Part I. The Rule ojt he People 4
1. Introduction 4
2. Majority Rule 6
2.1. Homogeneous citizens 6
2.2. Median voter models 7
2.3. The instability of democratic outcomes 12
3. Democracy and Efficiency 15
3.1. The neo-liberal critique 15
3.2. Is democracy inefficient? 20
4. Open Issues 23
4.1. Preferences 23
4.2. Political competition 26
4.3. Representation of interests 27
4.4. State autonomy 29
Part II. The Rule ojthe State 30
I. Introduction 30
2. Terminological Preliminaries 31
3. The Origins of State Autonomy 34
3.1. The "relative autonomy" approach 34
3.2. The origins of autonomy 36
3.3. State autonomy and class balance 41
3.4. State and society 44
3.5. The "state-centric" approach 47
3.6. State autonomy as a contingent outcome of conflicts 50
4. Consequences of State Autonomy 53
v
vi
5. State Autonomy under Democracy 57
5.1. Autonomous bureaus 57
5.2. Constraints 59
5.3. Unresolved issues 63
6. Conclusion 64
Part III. The Rule ofC apital 65
1. Introduction 65
2. The State and Reproduction of Capitalism 67
2.1. Marx's theory of reproduction of capitalism 69
2.2. Offe and Habermas 73
2.3. Poulantzas 79
2.4. State theories of reproduction: a critique 83
3. Class Conflict and the State 89
3.1. Power elite theory 89
3.2. Structural dependence theory 92
4. Conclusions 96
Part IV, Conclusions 100
Notes 103
Bibliography 112
Index 125
Introduction to the Series
Drawing on a personal network, an economist can stilI relatively easily
stay well informed in the narrow field in which he works, but to keep up
with the development of economics as a whole is a much more formid
able challenge. Economists are confronted with difficulties associated
with the rapid development of their discipline. There is a risk of
"balkanization" in economics, which may not be favorable to its
development.
FundaYQentals of Pure and Applied Economics has been created to
meet this problem. The discipline of economics has been subdivided
into sections (listed at the back of this volume). These sections comprise
short books, each surveying the state of the art in a given area.
Each book starts with the basic elements and goes as far as the most
advanced results. Each should be useful to professors needing material
for lectures, to graduate students looking for a global view of a parti
cular subject, to professional economists wishing to keep up with the
development of their science, and to researchers seeking convenient
information on questions that incidentally appear in their work.
Each book is thus a presentation of the state of the art in a particular
field rather than a step-by-step analysis of the development of the litera
ture. Each is a high-level presentation but accessible to anyone with a
solid background in economics, whether engaged in business, govern
ment, international organizations, teaching, or research in related
fields.
Three aspects of Fundamentals ofP ure and Applied Economics should
be emphasized:
-First, the project covers the whole field of economics, not only
theoretical or mathematical economics.
-Second, the project is open-ended and the number of books is not
predetermined. If new interesting areas appear, they will generate
additional books.
vii
viii
-Last, all the books making up each section will later be grouped to
constitute one or several volumes of an Encyclopedia of Economics.
The editors of the sections are outstanding economists who have
selected as authors for the series some of the finest specialists in the
world.
J. Lesourne H. Sonnenschein
The State and the Economy under
Capitalism *
ADAM PRZEWORSKI
University of Chicago
INTRODUCTION
Capitalism is a system in which scarce resources are owned privately.
Yet under capitalism property is institutionally separated from
authority. As a result, there are two mechanisms by which resources
are allocated to uses and distributed to households: the market and the
state. In the market, productive resources - capital, land, labor
capacities - are allocated by their owners and the distribution of
consumption results from decentralized interactions. Yet the state can
also allocate and distribute and it can act on those same resources that
constitute private property. Not only can states tax and transfer but
they can regulate the relative costs and benefits associated with private
decisions. Thus, inherent in capitalism is a permanent tension between
the market and the state.
Democracy in the political realm exacerbates this tension. The
market is a mechanism in which individual agents cast votes for
allocations with the resources they own and these resources are always
distributed unequally; democracy is a system through which people as
citizens may express preferences about allocating resources that they
do not own, with rights distributed more equally. Hence the two
mechanisms can lead to the same outcome only by a fluke. Indeed,
distributions of consumption caused by the market and those collec
tively preferred by citizens must be systematically different since
democracy offers those who are poor, oppressed or otherwise miser
able as a consequence of the private ownership of productive resources
an apportunity to find redress via the state.
·This work has been supported in part by grants from the National Science Foundation
and a Fellowship from the German Marshall Fund.
