Peter Evans, state actors and economic development

Nathan Newman nathan.newman at
Wed Dec 9 13:48:30 PST 1998

-----Original Message----- From: Rakesh Bhandari <bhandari at phoenix.Princeton.EDU> To: nathan.newman at <nathan.newman at>

-Nathan argues that we can only understand economics as politic economics -now that state spending has been an integral part of industrial development -for decades. But this can be done on the basis of Marx's basic concepts--I -argue or rather Okishio has argued...Now because economists by assuming the -homogenity of the production function cannot study this question of the -minimum size of investments, they may miss that which the sociologist -Nathan underlines--the contradiction between private ownership and control -and the public mobilisation of investment funds. -Nathan, I am wondering whether you understand arms and govt high tech -expenditures as did Rosa Luxemburg: the expanded reproduction of capital is -impossible in a closed capitalist economy and thus requires exogeneous -stimuli in the form of arms expenditures.

Actually, I think the transition to public funding of R&D and new markets is only the beginning of the analysis. Good leftwing usually-Trotsky leaning Marxists tend to homogenize Robber Baron capitalism, welfare state capitalism and even Soviet "state capitalism" on occasion into a uniform set of processes, the only difference being how surplus capital is mobilized.

The sociological issue is not just the separation of control - the agency problem in economist terms - but the social structure of markets and innovation. Economists (and Walker mirrors this line) take the "technological milieu" almost as a given in properly constructed capitalist formation. However, how funds are mobilized and deployed matter as much as how much is deployed.

As one example (and one I spent many years obsessing on of course), the Internet was not that great a mobilization of funds unto itself. I would bet the private sector spent as much or more on private networking efforts, but they did it much less successfully. This was not a failure of private capital mobilization but was inherent in the nature of private networking efforts, since each player sought a proprietary advantage in not being compatible (and thus keeping its own customers away from) its rivals.

What the state accomplishes is a coordination and independence from the economic rivalry that often undermines innovation. This is partly an escape from short-termism in investment (the most traditional Marxist explanation for state capital mobilization) but it is also an escape from the modes of commerce that prevent joint action in opening new markets. Technology is not science but a whole set of institutions that must move forward together and the state can encourage the creation of new institutions that can never form in a world of marginal utility.

The autonomy of the state necessary to escape the interests of traditional business interests is the sociological problem here. And the next issue is the way that once the new set of institutions leverage the new technological markets, these new business interests then seek to dismantle the very state the brought them into being. The way the privatization of the Internet has launched an ongoing assault on the very state regulatory and funding apparatus that launched the Internet is only one example.

Which brings us to Rakesh's problem with Evans:

-I have a lot of problems with Peter Evans' apologia for the so called -development state. But that would require a lot of research.

I am not sure apologia is the right word (unless preferring South Korea relative to Zaire counts). Peter has strong left beliefs, but intellectually he is basically an empiricist; his interest is in understanding why certain states achieve the economic growth of a South Korea versus why a state like Zaire descends into kleptocracy.

But Peter fully recognizes the corporate capitalist interests ready to wreck havoc with even the "best" developmental states (his parlance). As he writes on the last page of his book EMBEDDED AUTONOMY:

"Social structural changes, even if put in motion by the state itself, supersede the organizations and policies that created them, forcing changes in the state itself...Informatics agencies were transformed and sometimes marginalized by the industries they helped create. At a more general level, the social structural bases of the developmental state have been at least partially undercut by the new industrial society it helped create."

While I think Peter is too state-centered in his model, it does highlight the institutional contingencies that shape societies - an institutional analysis that economists of both the mainstream and Marxist variety overlook. There is so much faith on both the ends of the economistic viewpoint that the key element is the mobilization of a large enough lump of capital. And both come up short in explaining why so many large capital-intensive state projects come up empty or worse, yet other governments manage coherent growth policies from seemingly fewer resources.

What I find useful about Peter's work is that he neither believes in the beneficient state nor that it is a transparent vessel for capitalist interests, but takes the state seriously as an institutional apparatus that has varying degrees of autonomy depending on the social structure in which it is embedded AND which it shapes. And he highlights that this autonomy is a fluctuating state, tied to the self-interest of the capitalist class in having such an autonomous coordinating actor, but also that the very autonomy granted out of self-interest does open the state at times to public interested values.

The latter can and should be analyzed as a trap in many cases for progressives/leftists, but it is a trap at times precisely because the possibility for public values is real and not an illusion. It is the undulating assaults by successful business interests that tend to leave progressives without a social movement base high and dry in useless bureaucracies that once promised real social progress.

But the developmental state also brings into being not just new capitalist actors but new social movements who are as hostile to the autonomy of the state as the capitalists, but may themselves push forward very different values. Peter is not a strong theorist of social movements, but his model leaves much more room for the contingencies of organizing, the opportunities of strategy and the quite diverse formations of class struggle that we are confronted with in the real, bizarre world we seek social change.

--Nathan Newman

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