State, Market, and Civil Society


ONE USEFUL WAY of thinking about modernity is to think of it as the historical period of validity of a certain tripartite division of society—State, Market, and Civil Society—the domains of politics, economics, and sociology. This tripartite division was originally understood to apply only to the West. Non-Western high civilizations (Islam, Far East, India) had to be studied in their totality; this was the domain of Orientalism. Regions of the non-West lacking in high culture—lacking especially in cannons of great antiquity—were also to be studied in their totality; the domain of anthropology. This denial of modernity to the non-West could be sustained rather effortlessly through the nineteenth century, but become increasingly problematic in the twentieth century until it was throughly discredited by the postmodernist revolt from the sixties onwards. Nevertheless, the disciplinary division survived surprisingly unscathed.

There are two unrelated sets of uses of this tripartite division. One set is internal to the disciplines: Isolating relatively coherent domains of investigation allows for the development of analytical tools, organizing principles, theories, and so on, tailored to the specific fields of investigation. The other set is external to the disciplines. It consists of the now de facto forbidden, indeed almost unthinkable, task of characterizing national development. Whether or not it is acceptable in polite conversation, this is an important task. For the absolute and relative strengths of State, Market, and Civil Society inform overall national capabilities; tell us a great deal about societies’ exposure to various national pathologies and the attendant risk of societal failure; and offer insights into their historical and future evolution.

Roughly speaking, the most benign form of modernity obtains when all three are well-developed and in rough balance. Unbalanced development—especially when the State or the Market overshadows Civil Society—is a recipe for stagnation at best and national catastrophe at worst. It exposes societies to pathologies of political instability, extremism, dictatorship, ultranationalism, and militarism. And if an umbalanced society is lucky enough to escape such pathological fates, it is likely to end up in the cul-de-sac of arrested development.

DURING THE EARLY MODERN PERIOD, the Spanish State was stronger than the Market while Civil Society was nonexistent. Italy had the opposite configuration: The State barely existed while Civil Society was strong but not quite as strong as the Market. In Holland, Civil Society and especially the Market were considerably more developed than the State. Civil Society was equally strong in England and France, but the State was stronger in France whereas the Market was stronger in England—despite the great absolute strength of the English State. The State was relatively strongest in the garrison states of Prussia and Russia. In Austria, the State and Civil Society were strong relative to the Market. Outside the two great powers in the great checkerboard of Germany, the State was exceptionally weak—consisting of Grand Dutchies and so on—whereas Civil Society and the Market were well-developed. In sum, we find the European powers at the turn of the century with very different internal balances. These differential configurations played a decisive role in determining their fates as the trials of the early twentieth century fell on the Continent.

With German unification, the garrison state of Prussia had been grafted onto a flourishing German Civil Society and Market that had hitherto been largely unshepherded. The German statelets in the north and the west were, of course, no match for the formidable German Civil Society unparalleled elsewhere in Europe including England; and they were no match either for the great German capitalist combines of great antiquity from the Fuggers down. The conquering Prussian State—with its independent social base in the Prussian nobility—maintained its institutional, social and cultural distance from the otherwise extraordinarily well-developed German Civil Society and Market; leaving them unmolested; and in turn, jealously guarded its absolute autonomy in high politics.

The basic observation here, which is not really up for debate, is that the German Imperial State (i.e., Prussia) on the one hand, and German Civil Society and the Market on the other (both based far away from Prussian power in the East), grew up entirely disconnected and independent of each other. This novel configuration—Germany’s “special path”— had no counterpart anywhere else in the world. It did not entirely survive the crushing defeat of 1918. But it played a decisive role in the unraveling of the Weimar Republic when, in the midst of the escalating crises of 1927-1933 and panicked by the communist threat, the deep state, i.e., the Prussian nobility, threw its weight behind one Adolf Hitler.

In Russia, defeat in war resulted in the takeover of the extraordinarily-strong Moscovite State by radicals who set about destroying whatever rudimentary Market and Civil Society that still existed. Spain too predictably succumbed to dictatorship. Having never regained their former military primacy on the Continent, the French continued to indulge in fantasies of military and imperial glory, until they too surrendered to the Nazis. Only England, with its exquisite balance of forces, survived the extraordinary trials of the early twentieth century relatively unscathed.

IN THE UNITED STATES, the Market has always been stronger than the State and Civil Society. This was certainly the case in the Early Republic when the State was essentially premodern. With the Civil War the State caught up with Civil Society, but the Market continued to dominate both. Around 1890, the US could still be characterized simultaneously as an economic and industrial giant and a military, intellectual and cultural midget. After the turn of the century, the Market continued to develop almost continuously; whereas the State and Civil Society developed rather discontinuously; in quantum jumps that can be dated quite precisely.

America had been an intellectual, scientific and cultural backwater until World War I. American mass culture first gained global currency in the 1920s. But it was really from 1933 onwards—with the mass influx of German intellectuals—that the United States became an intellectual, scientific, and artistic superpower. The United States has, of course, remained a magnet for foreign talent ever since.

The great leaps forward for the State can be dated even more precisely. In 1898, the United States suddenly emerged as the hegemon of the Western Hemisphere and a great power on the international stage. Even after the turn of the century however, the State remained relatively underdeveloped; both with respect to the development of the Market as well as internationally. Indeed, the administrative, fiscal, and military capabilities of the United States lagged behind those of the European powers all the way to the Second World War. It was only during the course of that war that the State, with an unprecedented expansion in capabilities, closed the gap with both the Market and Civil Society. By 1945, a rough balance of forces had obtained in the United States.

The strength of the State, Civil Society and the Market grew rapidly and roughly proportionately during the early postwar period. This precarious balance of forces was fatally undermined by the neoliberal counter-revolution which elevated the Market over Civil Society; and to a lesser extent, over the State as well. The ascendancy of the Market over the State and Civil Society has continued unabated since; despite the impressive acquisition of capacities by the State after 9/11. The current political instability—evident in the crisis of the GOP—is in this sense an artifact of unbalanced development.

IN THE GLOBAL SOUTH the State has been, as a general rule but with important exceptions, either ultrastrong or ultraweak. The former usually led to dictatorship and/or mass terror; the latter to chronic instability. In sub-Saharan Africa, with few exceptions, the extraordinary weakness of the State has thwarted the development of both the Market and Civil Society. In the Middle East, the State is everywhere stronger than the Market and Civil Society; with the obvious exception of Israel, a colonial society with European roots. In the oil monarchies of the Arabian peninsula, Civil Society simply does not exist; whereas the strength of the Civil Society in Iran and Egypt continues to offer hope that they will one day be able to escape from their predicament. Iraq, Syria, and Libya have paid the highest price for their imbalance of forces: With the unraveling of the State, Civil Society and the Market have also been destroyed. The imbalance was least marked in Tunisia. Not surprisingly, Tunisia is the only Arab state to have experienced a somewhat successful transition during what used to be called the “Arab Spring.”

The Korean peninsula offers an instructive natural experiment. The State was strong in both North and South Korea. In North Korea, the world’s last totalitarian regime condemned its society to permanent arrested development. But whereas the Market was crushed in the North, the American presence allowed its full development in the South. It is this that allowed South Korea to eventually escape from authoritarianism and revive its Civil Society. And despite the impressive recent gains by Civil Society, South Korea remains at risk of recidivism. The same configuration and historical trajectory obtained in the other Asian Tigers: Singapore, Taiwan and Hong Kong.

The most threatening case of unbalanced development is, of course, China. After going through the cycle of mass terror, Chinese communism escaped the traditional fate of totalitarian states by successfully engineering an unprecendented development of the Market. Meanwhile, the repression and underdevelopment of Chinese Civil Society continued unabated. An interesting comparison is with the other Asian giant, India, where the State and Market are much weaker than their Chinese counterparts but Civil Society is considerably more developed. And it is the strength of Indian Civil Society that allowed the nation to shrug off its brief experiment with dictatorship and continue on its balanced path. Pakistan and Bangladesh too, unlike Burma, have vibrant Civil Societies that have survived intermittent reigns of military juntas relatively unscathed.

These cases underline the need to look beyond democracy and dictatorship; beyond economic development; beyond indices for human development, economic freedom, ease of doing business, corruption, and so on and so forth. Long term outcomes and societies’ resistance to national pathologies depend on balanced development; especially the strength of Civil Society. The problem, of course, is that while it is relatively easy to quantify the strength of the State and the Market, it is fiendishly hard to do that for Civil Society. But that may be just as well. More often than not, numerical metrics are unlikely to provide anything more than an illusion of precision.

IN LIEU OF A CONCLUSION, I’d like to offer some meta-observations. This frame of reference is only one of many reference frames through which modernity and national development can be analyzed. It leaves out large and relevant parts of reality by necessity, since, in order to bring some aspects into sharp relief others must be left out of focus. There is after all much more to modernity than the bureaucratic state, the market, and civil society. For instance, can we really talk about modernity without ever mentioning the death of God?

The issue is not whether this is the correct frame of reference—there is no such thing. The issue is whether this framework is useful. I believe it has the virtue of being parsimonious enough not to be unwieldy, yet superior in its flexibility to its discredited one-dimensional predecessor.


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