[WS:] I never claimed state is neutral or, for that matter, that any social institution is. They are instruments in political power struggle and their "nature" if this is an appropriate term depends on the balance of power.
Alas, you and Shane and others seem to have a grand narrative different from mine. It seems to hold as an article of faith that capitalism and state are two faces of the same coin, and to get rid of one you have to get rid of the other as well. It is a valid point of view, i admit, although I do not find it particularly useful in practice. It offers as much of a hope for real change than salvation myths and prayers. So this is where we part ways - and after that we can be looking at the same reality and see very different things.
Re: "This is not in contradiction to what is stated above. Where private capital has been unable or unwilling to undertake necessary tasks, that role has fallen to the state or to cooperatives of affected producers and consumers."
[WS:] This sounds terribly functionalist to me, almost like the invisible hand, only guiding to social bads rather than social goods. I prefer a different framework - that of power struggle and uncertain outcomes.
Re: " Under the New Deal, which is the model you probably have in mind,"
[WS:] Actually not. I was thinking more in terms of Europe and comparing different outcomes in states like Italy, Sweden, Norway, Germany, the Netherlands, even Russia. The Etats Unis is a very animal from those. I can summarize that difference in paraphrasing a Pakistani pun - In Europe all countries have business classes, but in the Etats Unis the business class has a country.
When I was talking about "labor friendly" states I was thinking about Sweden and Norway and contrasting them to Italy, Germany, or the Netherlands. The Scandinavian countries represent a case of effective labor organizing which resulted in shaping state policies to labor interest - whereas Italy the Netherlands and Germany represent cases of less successful labor organizing. To make a long story short, all these countries started as capital friendly. In Scandinavia, labor and socialists had reformist goals in mind from the start and organized to achieve this goal - mainly through centralization of unions and forming alliances with agrarian parties. In Italy and Germany, and also in the Netherlands the labor movements were divided into factions and some of these factions pursued revolutionary objectives whereas other reformists. Having revolutionary objectives is a worthy pursuit only if one has the means of carrying them through, as the opposition to revolution is always fierce. This typically means securing support of the military or at least a significant part of it. The Bolsheviks did it and won. In Italy and Germany, by contrast, it was the fascists rather than Communists and fellow travelers who mobilized the military and paramilitary to their cause and consequently won. In the hindsight it appears that mobilizing the military in those countries for the left was not an option. Hence a more pragmatic strategy would have been to follow the reformist policy of their northern neighbors than a revolutionary one of the Bolsheviks.
However, even thous revolutions succeeded in Russia, but the outcome could hardly be called labor friendly. It was pretty labor repressive, in fact. The working class in the reformist Scandinavia dis much much better. Of course one can dismiss Russia as not being a "true proletarian revolution" but this argument jettisons the only empirical case that the proponents of the revolutionary approach can muster. Without that, revolutions, abolishing of the state and class society becomes like salvation - something that one expect only in heaven but not in this world.
Re: "cooperatives facing insolvency or seeking to maximize profits will, like any capitalist firm, necessarily seek to cut wages, benefits, and work rules "
[WS:] And what is exactly forcing them to "maximize profits"? In a capitalist corporation it is stockholders who seek maximum returns to their investment and are dumping stock of less maximizing corporations for that of more maximizing ones - at least according to the necolassical economic theory. But coops do not have stock holders, in fact many of them are registered as non-stock corporations? So why would they want to "maximize profits" instead of simply remaining solvent i.e. covering their operating costs? So unless we assume the existence of an invisible hand that makes them maximize, your argument is a nonsequitur.
Of course, if you take Galbraith seriously (as I do) you do not buy all that market determinism at all. Instead you would believe that corporations have a considerable level of independence form the market as long as they cover their costs and return some profit - but beuind that they have considerable choice. They can pursue labor cost cutting policy as a matter of managerial choice rather than market necessity. They may also pursue more labor friendly policies if they chose so. But here again we are talking about two different interpretative frameworks that divide us - economic determinism vs. contingentism of power relations. I do not think we are going to resolve that unless one of us is willing to abandon his interpretative framework for that of the other side. I am not married to mine, but I would certainly not buy economic determinism in any form.
Have a happy and rewarding New Year.
Wojtek