Capitalism, socialism and democracy. Can Liberal Democracy Survive the Decline of the Middle Class Democracy Capitalism Consensus Quote

29.08.2020

The English left-wing historian Tony Judt, before his death in 2008, wrote a work in which he tried to rethink the role of Western social democracy. The fact that neoliberalism had proved its failure was beyond his doubts. Judt believed that the way out of the current impasse was to return to redistributing wealth and increasing the role of the state.

Tony Judt had a typical background as a Western leftist intellectual. He was a Jew (his mother is from Russia, his father is from Belgium), he graduated from Cambridge. Early on he became interested in Marxism, then switched to left-wing Zionism, and even lived in an Israeli kibbutz for several years in the 1960s. With age, he settled down and moved to the camp of the Social Democrats (his political views corresponded to the left wing of the British Laborites and French socialists). He died relatively young, from a stroke, at 62 in 2010.

His last work was called "Ill Fares the Land", and its title refers to the words from the famous poems of the English poet Oliver Goldsmith (1730-1774), taken as an epigraph to the book:

“Unfortunate is the country where thieves become impudent,

Where riches are accumulated, and people grow weak.

Judt's book had a great resonance in the West (as usual, it was not paid attention to in the Russian intellectual semi-desert). Its appearance coincided with the initial phase of the deep crisis of 2007-2010, when the First World saw a rethinking of neoliberal economics and politics that led Western civilization to a dead end. Here is a short excerpt from Judt's book, which shows the path of becoming a "welfare" society, as well as reflections on what social democracy should become today.

(Tony Judt)

“The obsession with accumulating wealth, the cult of privatization, the growing polarization of wealth and poverty—everything that has begun since the 1980s is accompanied by an uncritical glorification of an unbridled market, a disdain for the public sector, a deceptive illusion of endless economic growth.

So you can't go on living. The 2008 crisis reminded us that unregulated capitalism is its own worst enemy. Sooner or later, he may collapse under the burden of his own extremes. If everything continues as before, then even more shocks can be expected.

Inequality corrupts society. Differences in material status are transformed into rivalry over status and possession of goods. There is a growing sense of superiority in some and inferiority in others. Prejudice against those who are lower on the social ladder is growing stronger.

Increasingly tangible manifestations of crime and social inferiority. Such are the bitter fruits of the unlimited pursuit of wealth. 30 years of growing inequality have led the British, and especially the Americans, to believe that these are the normal conditions of life. That it is enough to have economic growth to eliminate social ills: the diffusion of prosperity and privilege will be a natural consequence of the growth of the pie. Unfortunately, the facts show otherwise. The growth of total wealth camouflages distributive disproportions.

(Tony Judt during the Six Day War in Israel, 1967)

Keynes believed that neither capitalism nor liberal democracy could survive long without each other. Since the experience of the interwar period has clearly revealed the inability of the capitalists to protect their own interests, it is up to the liberal state to do this for them, whether they like it or not.

The paradox is that capitalism had to be saved by measures that were then (and since) identified with socialism. From Roosevelt's New Dealers to West German "social market" theorists, from the British Labor Party to French "indicative" economic planners, everyone believed in the state. Because (at least in part) almost everyone feared a return to the horrors of the recent past and were happy to restrict the freedom of the market in the name of the public interest.

Although the principles of Keynesianism were adopted by various political forces, the leaders of European social democracy played the main role in their implementation. In some countries (the most famous example is Scandinavia), the creation of a "welfare state" was entirely the merit of the social democrats. The overall achievement has been significant progress in curbing inequality.

The West has entered an era of prosperity and security. Social democracy and the welfare state reconciled the middle classes with liberal institutions. The significance of this is great: after all, it was the fear and discontent of the middle class that led to the growth of fascism. Reconnecting the middle class with the democratic order was the most important task facing the politicians of the post-war period - and by no means an easy one.

The experience of two world wars and the crisis of the 1930s taught almost everyone to the inevitability of state intervention in everyday life. Economists and bureaucrats have come to understand that it is better not to wait for something to happen, but to anticipate it. They were forced to admit that the market is not enough to achieve collective goals, the state must act here.

In recent years, people have been taught to think that the price for these benefits was too high. This price, critics argue, is a decrease in economic efficiency, an insufficient level of innovative activity, a constraint on private initiative, and an increase in public debt. Most of this criticism is false. But even if this were true, this does not mean that the experience of European social democratic governments does not deserve attention.

Social democracy has always been a kind of political conglomerate. Dreams of a post-capitalist utopia combined with her recognition of the need to live and work in the capitalist world. Social Democracy took “democracy” seriously: in contrast to the revolutionary socialists of the early 20th century and their communist successors, the Social Democrats accepted the rules of the democratic game, including compromises with their critics and opponents, as the price of participating in the competition for access to power.

For social democrats, especially in Scandinavia, socialism was a distributive concept. They understood it as a moral issue. They wanted not so much a radical transformation for the sake of the future as a return to the values of a better life. Social insurance or access to health care was thought to be best provided by the government; therefore, it must do so. How - this has always been a matter of controversy and carried out with varying degrees of ambition.

Common to different models of the "welfare state" was the principle of collective protection of workers from blows from the market economy. In order to avoid social instability. The countries of continental Europe have succeeded. Germany and France weathered the financial storm of 2008 with much less human suffering and economic loss than the economies of England and the United States.

The Social Democrats, at the head of governments, have maintained full employment for almost three decades, as well as economic growth rates even greater than during the unregulated market economy. And on the basis of these economic successes, they achieved serious social changes that began to be perceived as the norm.

By the early 1970s, it seemed unthinkable to think about cuts in social services, benefits, government funding for cultural and educational programs—all the things people used to think were guaranteed. The costs of legislating social justice in so many areas were inevitable. As the post-war boom began to subside, unemployment became a serious problem again and the welfare state's tax base more fragile.

The generation of the 1960s was, among other things, a by-product of the welfare state itself, upon which it vented its youthful contempt. The consensus of the post-war decades was broken. A new consensus began to form around the primacy of private interest. What worried the young radicals—the distinction between freedom of private life and frightening restrictions in the public sphere—was, ironically, characteristic of the newly re-entered the political right.

After the Second World War, conservatism was in decline: the pre-war right was discredited. The ideas of "free market" and "minimal state" did not enjoy support. The center of gravity of political disputes was not between the left and the right, but among the left itself - between the communists and the dominant liberal social democratic consensus.

However, as the traumas of the 1930s and 1940s began to be forgotten, there was a revival of traditional conservatism. The return of the right was aided by the emergence of the new left in the mid-1960s. But not earlier than the mid-70s, a new generation of conservatives decided to challenge the "statism" of their predecessors and talk about the "sclerosis" of overly ambitious governments, "killing" private initiative.

It took more than 10 years for the dominant “paradigm” of discussing the problems of society to move from a passion for state interventionism and a focus on the public good to a view of the world, which M. Thatcher expressed with the words: “There is no such thing as society, there are only individuals and families” . The role of the state was again reduced to an auxiliary one. The contrast with the Keynesian consensus could not be more striking.

The very concept of "wealth" cries out to be redefined. It is not true that progressive tax rates reduce wealth. If the redistribution of wealth improves the health of a nation in the long run, by reducing the social tensions generated by envy, or by increasing and equalizing everyone's access to services that were previously reserved for the few, then isn't that good for the country?

What do we want? The first priority is to reduce inequality. With entrenched inequalities, all other desirable goals are hardly achievable. With such a striking inequality, we will lose all sense of community, and this is a necessary condition for politics itself. Greater equality would mitigate the corrupting effects of envy and hostility. This would benefit everyone, including those who are prosperous and wealthy.

"Globalization" is an updated version of the modernist belief in technology and rational management. This implies the exclusion of policy as a choice. Systems of economic relations are treated as a natural phenomenon. And we have no choice but to live by their laws.

It is not true, however, that globalization evens out the distribution of wealth, as liberals claim. Inequality is rising – within countries and between countries. Constant economic expansion alone does not guarantee either equality or prosperity. It is not even a reliable source of economic development. There is no reason to believe that economic globalization is smoothly transforming into political freedom.

Liberal reformers have turned to the state before to deal with market failures. This could not have happened "naturally" because the crashes themselves were a natural result of the market's functioning. What could not happen by itself had to be planned and, if necessary, imposed from above.

Today we face a similar dilemma. We are in fact already resorting to state action on a scale that last took place in the 1930s. However, since 1989 we have congratulated ourselves on the final defeat of the idea of an all-powerful state and are therefore not in the best position to explain why we need intervention and to what extent.

We must learn to think about the state again. The state has always been present in our affairs, but it has been vilified as a source of economic dysfunction. In the 1990s, this rhetoric was widely taken up in many countries. The opinion prevailed in the public mind that the public sector should be reduced as much as possible, reducing it to the functions of administration and security.

How, in the face of such a widespread negative myth, how to describe the true role of the state? Yes, there are legitimate concerns. One is related to the fact that the state is an institution of coercion. Another objection to the activist state is that it can make mistakes. But we have already freed ourselves from the assumption, widespread in the middle of the 20th century, that the state is the best solution to any problems. Now we need to get rid of the opposite notion: that the state is - by definition and always - the worst possible option.

What can the left offer? We must remember how the generation of our grandfathers coped with similar challenges and threats. Social democracy in Europe, the New Deal and the Great Society in the US were the answer. Few in the West today can imagine the complete collapse of liberal institutions, the disintegration of the democratic consensus. But we know examples of how quickly any society can slide into a nightmare of limitless cruelty and violence. If we are to build a better future, we must begin by realizing how easily even the most established liberal democracies can sink.

It is doctrinaire market liberalism that has held for two centuries that unquestioningly optimistic view that all economic change is for the better. It is the right that has inherited an ambitious modernist drive to destroy and renew in the name of a universal project. Moderation is characteristic of social democracy. We should be less apologetic about the past and more confident about achievements. We should not be concerned that they have always been incomplete.

From the experience of the twentieth century, we must at least learn that the more perfect the answer, the more terrible its consequences.

(Quotes: Alternatives magazine, No. 1, 2013;

Balatsky E., "New Characteristics of Global Capitalism".
http://www.kapital-rus.ru/articles/article/225440/

It seems that we are already witnessing the birth of a new trend, when the traditional alliance of capitalism and democracy is beginning to disintegrate.

Today there are examples of a new model of capitalism, i.e. capitalism without democracy . For example, the authoritarian regime in Turkey, which achieved great economic success, and the state capitalism of China, which became the embodiment of an economic miracle for several decades, show that capitalism can exist without traditional democracy and even without refined liberalism.

At one time, M. Gaddafi was a fierce critic of democracy. As he rightly noted, democracy involves two phenomena - the people and seats (power). Power apart from the people is representation or guardianship, which is a deceit that the rulers resort to so that the chairs do not belong to the people. Such chairs in the modern world are parliaments, with the help of which power is monopolized by individual clans, parties and classes, and the people are excluded from participation in politics. Moreover, Gaddafi rises to a philosophical understanding of democracy, saying that the party acts as a modern dictatorial instrument of government, since the power of the party is the power of the part over the whole. The presence of a ruling party means that supporters of one point of view are allowed to rule the whole people. Although Gaddafi himself could not offer any serious alternative, his criticism of democracy is quite convincing. For example, everyone is well aware of the aphorism according to which questions of scientific truth are not decided by voting. As a rule, when discussing something new, most people tend to make mistakes, but then democracy in science can lead to violence of fools (the mistaken majority) over smart ones (the right-wing minority). BUT if the principle of democracy does not work in science, why should it work in politics?

Continuing such doubts, D. Zolo goes even further. According to his ideas, modern society is characterized by a colossal complication and coexistence in it of various functional subsystems of science, economics, politics, religion, family, etc. At the same time, each subsystem, due to its growth and development, tends to become an independent social integrity. In this situation, the task of the democratic regime is to protect social diversity from the predominance of any particular subsystem of production, science and technology, religion, trade unions, etc. Otherwise, democracy will develop into the despotism of the dominant social group (subsystem). Thus, in the modern world, the very concept of democracy is fundamentally transformed and becomes largely meaningless. Until now, it has been thought that democracy provides some acceptable balance between political protection and social complexity (diversity), security and personal freedom, governance and individual rights.

Any noticeable shifts in these binary links lead to the transformation of democracy into an oligarchy.

The complication of society and the growth of social risks lead to the growth of various conflicts and the violation of the democratic balance. In such a situation, authoritarian regimes turn out to be a completely natural and reasonable way out of the current situation. Sometimes it is authoritarian rule that keeps the system from disintegration, it is it that allows you to balance the interests of different social groups. Singapore is a good example , which has achieved the highest technological efficiency, widespread use of information tools, general prosperity, high employment rates, etc., all against the backdrop of a lack of political ideology and public debate. In other words, within the framework of the capitalist system, there is a gradual replacement of democratic political regimes with effective authoritarian management .

The benefits are so firmly entrenched in finance capital that it is often said that multinational corporations and international financial markets have in some way displaced or encroached on the sovereignty of the state.

But it's not. States remain sovereign. In their hands are legal powers that neither an individual nor a corporation can possess. The days of the East India Company and the Hudson Bay Company are gone forever.

While states still have the power to intervene in the economy, they themselves are increasingly dependent on the forces of international competition. If the state imposes conditions that are unfavorable for capital, capital will begin to leave the country. Conversely, if the state restrains wage growth and provides incentives for the development of certain industries and enterprises, it can contribute to the accumulation of capital. The system of world capitalism consists of many sovereign states, each of which has its own policy, but each is also involved in world competition not only for trade, but also for capital. This is one of the features that makes this system extremely complex: although we can speak of a world and global regime in economic and financial matters, there is no such world regime in politics. Each state has its own regime.

There is a widespread belief that capitalism is associated in some way with democracy in politics. It is a historical fact that the countries that form the center of the world capitalist system are democratic, but this cannot be said for all the capitalist countries that are on the periphery of the system. In fact, many argue that some sort of dictatorship is needed to set economic development in motion. Economic development requires the accumulation of capital, and this in turn requires low wages and high savings rates. This position is easier to achieve by an autocratic government that is able to impose its will on the people than by a democratic government that takes into account the wishes of the electorate.

Take, for example, Asia, which shows many examples of successful economic development. In the "Asian model" the state enters into an alliance with the interests of local businesses and helps them to accumulate capital. The "Asian model" strategy requires state leadership in industrial planning, a higher degree of financial dependence and some degree of protection of the domestic economy, as well as control over wages. Such a strategy was first used by Japan, which had democratic institutions introduced during the period of the US occupation. Korea tried to slavishly imitate Japan, but without democratic institutions. Instead, politics was carried out by a military dictatorship that controlled a small group of industrial conglomerates (chaebol). The checks and balances that existed in Japan were absent. A similar alliance has been observed between the military and the business class, mostly of Chinese origin, in Indonesia. In Singapore, the state itself has become a capitalist, creating highly-managed investment funds that have achieved significant success. In Malaysia, the ruling party has managed to balance favorable attitudes towards business interests and benefits for the ethnic minority.

In Thailand, the political system is too complex for an outsider to understand: military interference in commercial activity and financial interference in elections were two serious weaknesses of the system. In Hong Kong alone, there was no state interference in commercial activities due to its colonial status and strict enforcement of laws. Taiwan also stands out for successfully completing its transition from an autocratic to a democratic political regime.

It is often argued that successful autocratic regimes ultimately lead to the development of democratic institutions. This statement has some merit: the nascent middle class is a huge help in building democratic institutions. However, this does not mean that economic prosperity leads to the evolution of democratic freedoms. Rulers are reluctant to give up power, they must be encouraged to do so. For example, Singapore's Lee Kwang Yew discussed the virtues of the "Asian way" in harsher terms after decades of prosperity than before.

There is a fundamental problem with the claim that capitalism leads to democracy. There are no forces in the system of world capitalism that could push individual countries in the direction of democracy. International banks and multinational corporations often feel more comfortable with strong, autocratic regimes. Perhaps the most powerful force in the fight for democracy is the free flow of information, which makes it harder for the state to misinform people. But the freedom of information cannot be overestimated. In Malaysia, for example, the regime has enough control over the media to allow Prime Minister Mahathir Mohammed to influence events with impunity. Information is even more limited in China, where the state even controls the Internet. In any case, the free flow of information does not necessarily induce people to democracy, especially when people living in a democratic society do not believe in democracy as a universal principle.

To be honest, the connection between capitalism and democracy is tenuous at best. There are different stakes here: the goal of capitalism is welfare, democracy is political power. The criteria by which rates are evaluated also differ: for capitalism, the unit of calculation is money, for democracy, the votes of citizens. The interests that these systems are supposed to satisfy vary: for capitalism it is the private interest, for democracy it is the public interest. In the US, tensions between capitalism and democracy are symbolized by the now-talk about conflicts between Wall Street and Main Street. In Europe, the expansion of political privileges has led to a correction of some of the most obvious excesses of capitalism: the dire predictions of the Communist Manifesto have been nullified by the expansion of democracy.

Today, the ability of the state to provide funds for the welfare of citizens has been seriously undermined by the ability of capital to avoid taxation and the ability of citizens to get around burdensome employment conditions by moving to other countries. The states that have rebuilt social security and employment conditions - the US and Great Britain - are prospering, while others that have tried to keep them unchanged, such as France and Germany, cannot be said.

The dismantling of the welfare state is a relatively new phenomenon, and its full implications are not yet being felt. Since the end of the Second World War, the share of the state in the gross national product (GNP) in the industrialized countries taken together has nearly doubled. Only after 1980 did this trend change. It is interesting that the share of the state in the gross national product decreased slightly. What has happened is that taxes on capital and unemployment insurance contributions have declined, while other forms of taxation, especially taxes on consumption, continue to increase. In other words, the burden of taxation was shifted from capital to citizens. It's not quite what was promised, but we can't even talk about unintended consequences, since the results were exactly as the free marketers saw them.

Since one of the most important features of a democratic system is the institutional separation between the state, economy and society, disputes over the balance between the public and private spheres have taken the form of disputes about the relations between the state and the economy, and between the state and society. At its broadest level, the debate on this issue has been conducted in conflicting but not mutually exclusive terms of efficiency and citizenship. These are also controversial concepts in which different meanings are invested. Thus, disputes about citizenship include issues of equality, participation, the improvement of society, human engineering. Disputes about efficiency, in turn, are carried on within the framework of a number of antinomies such as capitalism and socialism; market and planning; capitalism and democracy, etc. From the point of view considered in this chapter, the interrelation of the market, capitalism and democracy is of the greatest interest.

The real expression of this interest is, in particular, the market theory of democracy, which has gained some popularity in the West. The main provisions of this theory were first formulated by I. Schumpeter: "The democratic method is an institutional tool for achieving political decisions, on the basis of which individual individuals gain power: to make decisions through competition, the object of which is the votes of voters."

Continuing this line, E. Downes, E. Schatschneider, A. Wildavsky and others identified the political process with exchange in a competitive market. The goal of each participant in this case is to maximize profits while minimizing costs. At the same time, the “bargaining” itself is conducted according to certain generally accepted rules of the game. For example, voting was viewed as an exchange of votes for a certain political course, and the activities of politicians were seen as the activities of entrepreneurs engaged in the market, gaining and strengthening positions through bidding and building support in search of coalitions.

In this context, the problem of the relationship between democracy and capitalism, or the market economy, has acquired particular relevance. It should be noted that the founders of Marxism-Leninism also proceeded from the thesis that the principles of liberal democracy and capitalism and the capitalist socio-economic system are inseparable from each other. Moreover, liberal democracy was regarded as a special system of class domination of the bourgeoisie, which is doomed to disappear with the disappearance of capitalism and, accordingly, the bourgeoisie. This, as they say, is a negative interpretation of democracy. In this paragraph, we are talking entirely about the positive assessment of its supporters.

Currently, two directions are distinguished in the interpretation of this issue - the neopluralists, who adhere to the liberal orientation, and the so-called school of "public choice", or neoclassics, which make up the conservative trend. Neoclassic -F. Hayek, D. Escher, M. Olson and others are convinced that political democracy can survive and function only in a capitalist economy based on the principles of a free market. In their opinion, of all existing systems, only capitalism provides the conditions for group competition and broad political participation of the masses, that capitalism is the necessary and only prerequisite for democracy. Moreover, in cases where political democracy infringes in any way on the principles of a free market and free competition, as well as the right of an entrepreneur to freely dispose of his property, with which capitalism is wholly identified, priority is unconditionally given to these latter.

Indeed, there is an immanent connection between the principles of capitalism and pluralistic democracy. The latter is the guarantor of the existence and viability of capitalism as a socio-economic system. First of all, it provides the general population with the right to participate in the political process, guaranteeing the rules of the game between political parties and various interest groups, and provides conditions for the rotation of power in the process of general elections at all levels of government, as well as other principles and norms of parliamentarism. In this way, pluralistic democracy is called upon to provide legitimacy to free market relations in both the social and economic spheres. The question of the relationship between private property, freedom, economic and personal, which constitute the comparative quintessence of the idea of democracy, was touched upon in the chapter on civil society. It should be noted here that free market relations, under certain conditions, can create real obstacles to the effective implementation of the principles of pluralistic democracy, and even undermine them.

Convincing arguments for the validity of this conclusion are contained in the works of the neopluralists R. Dahl, C. Lindblom and others. Perhaps the most concise position of the neopluralists on this issue was stated by R. Dahl: “Democracy is closely associated and has always been associated in practice with private ownership of the means of production. ... Even today, in any country governed by a polyarchy, the means of production are for the most part "owned" by the private.On the other hand, no country where the means of production are primarily in the hands of the state or ... "society" is governed by a polyarchy." But at the same time, it turns out that the market economy is a necessary, but not the only and not sufficient condition for democracy. Moreover, the strengthening of the economic power of certain groups can increase political inequality and thereby weaken and undermine the power of unorganized citizens in the political process.

The group of political scientists under consideration demonstrates the validity of this thesis on the example of the relationship between business and democracy. If in the 50s and 60s D. Truman, V.I. Key and R. Dahl himself portrayed business as one of many interest groups competing for power and influence, then from the mid-70s. many works have appeared that critically analyze "corporate capitalism" and its impact on the political system. So, R. Dahl and C. Lindblom, for example, wrote: "In our analysis of pluralism, we made another mistake ... believing that businessmen and business groups play the same role as other interest groups." In reality, Dahl and Lindblom argued, business plays a role in a polyarchic or pluralist system that is qualitatively different from that of other interest groups. According to them, "generally accepted interpretations that characterize the American or any other market-oriented system as based on competition between (equal. - K.G.) interest groups are a serious mistake because they do not take into account the obvious privileged position of businessmen in politics.

This is even more true of the largest business corporations, which do not always and necessarily operate in accordance with democratic rules and norms. Moreover, under certain conditions, the market does not at all appear as a place where equal and equal agents of purchase and sale exchange goods to mutual advantage. It is often the arena in which huge corporations overwhelm smaller firms, and sprawling multinational corporations dominate the lives of individuals, regions, and even entire countries. As historical experience shows, strengthening the position of certain stakeholders, especially large corporations or industrial and financial groups, from a political point of view, can lead to negative consequences for the functioning of democracy, to undermine or at least weaken democratic norms and rules of the game. .

We, our politicians and representatives of the humanities and social sciences, should listen very carefully to these arguments, especially those who believe that the establishment of market relations will automatically lead to the establishment of democratic principles in the political sphere. The entire world experience of the 20th century convincingly shows that often capitalism, although possibly deformed, was quite compatible with truly tyrannical forms of government. It is no secret that under the Nazi regime in Germany, the fascist regime in Italy, the Franco regime in Spain, etc. dictatorial political machines were built on an infrastructure that was fundamentally capitalist, although it was subordinated to an omnipotent state. The most recent example of such an amalgam comes from the Pinochet regime in Chile. As you know, in September 1973, General Pinochet came to power on the bayonets of the rebellious army, dissatisfied with the social transformations of the socialist S. Allende, which to a certain extent ran counter to the interests of the country's business circles. Pinochet and the military junta headed by him fully restored these privileges (as far as it was possible under the Chilean conditions). Moreover, they attracted one of the strong supporters of market relations and rigid forms of monetarism as the architect of the country's economy. Pinochet's regime is the most illustrative example, showing that capitalism and market relations are insufficient conditions for establishing political democracy. But how many were and still exist regimes in which authoritarianism in politics is organically combined with a market economy? But this does not mean at all that Russia can or should follow this path. But to take into account such a possibility, in order to avoid it, it must be.

Keywords

CAPITALISM / MARKET / WORLD-SYSTEM / WORLD-ECONOMY / RENT / DEMOCRACY / STATE / CENTER-PERIPHERAL MODEL/ CAPITALISM / MARKET / WORLD-SYSTEM / WORLD-ECONOMY / RENT / DEMOCRACY / STATE / CENTER-PERIPHERY MODEL

annotation scientific article on economics and business, author of scientific work - Martyanov Viktor Sergeevich

Modern capitalism, by inertia, given by A. Smith, is described as competition in free markets. This historical model worked as the market expanded and more and more resources became available. This made it possible to maintain the political order of the welfare state, initiated by broad social movements, as a form of egalitarian non-economic distribution of resources, softening the inequalities and class contradictions generated by the market. However, after capitalism has swept the whole world, it has become more and more subject to crisis phenomena: competition is intensifying, demand / sales markets are not expanding, technological progress creates growing structural unemployment, economic growth stagnates as a result of the completion of the global rural-urban transition, resources of all peripheries practically exhausted. As a result, nationalism and protectionism are on the rise, global center-periphery polarization is on the rise, and on the horizon of the future there is an image of a non-democratic and non-egalitarian society without economic growth and mass labor, but with growing dangerous classes of the precariat and the unemployed, who require more and more centralized state resources to maintain of his life activity. As a result of these processes, the market model of capitalism is gradually transforming into a state-centric one, where the main motivational factor instead of the market pursuit of profit is the search for rent or the redistribution of markets by non-economic methods. In such a context, the state becomes the key economic entity, distributing resources in non-market ways among the hierarchy of rental groups that form the framework of the new structure of the political community.

The Capitalism, Rent and Democracy

By inertia, which derives from Adam Smith, modern capitalism is described as a free-market competition. This historical model has worked while the market expands and the availability of resources increases. It provided the opportunity to maintain the political order of the welfare state as a form of non-economic egalitarian distribution of resources, which mitigates inequality and class antagonisms generated by market. However, once capitalism has engulfed the whole world, it is more prone to crises: competition intensifies, markets of demand and market outlets do not expand, technological progress creates a growing structural unemployment, economic growth due to the completion of the global village-city transition stagnates, the resources of all the peripheries are almost exhausted. As a result, nationalism and protectionism arise, the polarization between the global center and the periphery increases, and there comes the image of undemocratic and non-egalitarian labor less society on the horizon of the future, with the precariat and the unemployed growing in numbers and demanding large amounts of rent to maintain their livelihoods. Due to this, the market model of capitalism is gradually transforming into a rental one, where the pursuit of profit, the main motivational factor intrinsic to the market , is removed by the pursuit of rent and the redistribution of markets by non-economic ways. In this context, the state becomes the key economic actor, which distributes resources by extra-market means within the hierarchy of rental groups that form the framework of a new structure of the political community.

The text of the scientific work on the topic "Capitalism, rent and democracy"

www.hjournal.ru DOI: 10.17835/2076-6297.2017.9.1.051-068

CAPITALISM, RENT AND DEMOCRACY*

MARTYANOV VIKTOR SERGEEVICH,

Candidate of Political Sciences, Deputy Director for Scientific Affairs, Institute of Philosophy and Law, Ural Branch of the Russian Academy of Sciences, Yekaterinburg,

e-mail: [email protected]

THE CAPITALISM, RENT AND DEMOCRACY

VICTOR S. MARTYANOV,

* The article was prepared with the support of the RFH grant No. 17-03-00057.

demand/sales markets are not expanding, technological progress creates growing structural unemployment, economic growth stagnates as a result of the completion of the global rural-urban transition, the resources of all the peripheries are practically exhausted. As a result, nationalism and protectionism are intensifying, the global center-periphery polarization is growing, and on the horizon of the future there is an image of a non-democratic and non-egalitarian society without economic growth and mass labor, but with growing dangerous ® classes of the precariat and the unemployed, who require more and more volumes ^ of resources centralized by the state to maintain its 1 vital activity. As a result of these processes, the market model of capitalism t

gradually transforms into a state-centric one, where the main motivational factor, instead of the market pursuit of profit, is the search for rent or the redistribution of markets by non-economic methods. In such a context, the state becomes the key economic entity, distributing resources in non-market ways among the hierarchy of rental groups that form the framework of the new structure of the political community. Keywords: capitalism; market; world-system; world economy; rent; democracy; state; center-periphery model.

Institute of Philosophy and Law !±! (Ural Branch of the Russian Academy of Sciences), Ekaterinburg, §

e-mail: [email protected] y)

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order of the welfare state as a form of non-economic egalitarian distribution of resources, ^

which mitigates inequality and class antagonisms generated by market. However, once ~ capitalism has engulfed the whole world, it is more prone to crises: competition

intensifies, markets of demand and market outlets do not expand, technological progress creates a growing structural unemployment, economic growth due to the completion of the global village-city transition stagnates, the resources of all the peripheries are almost exhausted. As a result, nationalism and protectionism arise, the polarization between the global center and the periphery increases, and there comes the image of undemocratic and non-egalitarian labor less society on the horizon of the future, with the precariat and the unemployed growing in numbers and demanding large amounts of rent to maintain their livelihoods. Due to this, the market model of capitalism is gradually transforming into a rental one, where the pursuit of profit, the main motivational factor intrinsic to the market, is removed by the pursuit of rent and the redistribution of markets by non-economic ways. In this context, the state becomes the key economic actor, which distributes resources by extra-market means within the hierarchy of rental groups that form the framework of a new structure of the political community.

Keywords: capitalism; market; world-system; world-economy; rent; democracy; state; the center-periphery model.

JEL: A13, D7, E2.

h- From Market to Rent: The Model of Global Rent Capitalism

o Observed fundamental changes in functioning

global markets and the widespread growth of the influence of non-economic factors on the actual economic processes cause a natural strengthening of the theoretical and methodological positions of classical or original 5 institutionalism. These are theories focused on explaining economic patterns and transformations through the broader prism of human ® history, culture, geography, which have an irremovable ^ determining influence - in the form of legal, political, moral and other regulatory institutions. Equally important is the analysis of the development of interests and the interaction of collective subjects (social groups), which brings economic theory closer to political science and sociology (Rodrik, 2014).

In this problematic context, a new wave of research interest in the heritage of T. Veblen, D. Commons, G. Schmoller (Efimov, 2015), the wide interdisciplinary popularity of the works of R. Coase, D. North, J. Wallis, B. Weingast, H.- D. Chan, M. Olson, D. Acemoglu (and even partly T. Piketty), kept in the methodological traditions of classical institutionalism, are by no means accidental. A new rise in popularity of ^ institutionalism, which largely erases the established disciplinary boundaries in the social sciences, occurs against the backdrop of an increasing decrease in the relevance of ^ theories based on methodological individualism, self-regulation of 5 equilibrium markets, rational egoism maximizing their profits

individuals and the isolated analysis of the pure economy. o- Global suspension of economic growth, detection of limits

¡2 free markets, the further expansion of automation and robotization of production, causing a structural increase in unemployment in developed societies, are changing the textbook foundations of capitalism associated with the extraction of profit from wage labor and capital. The global world g shows clear signs of the transformation of the market model of capitalism into a rent one. In the context of economic underdevelopment, as a new global norm, the factor of rental income gradually replaces w entrepreneurial profits, which, in a long historical time, as T. Piketty shows in his calculations, is about the normal state of natural capitalism (Piketti, 2015. C 350-358).<с Прежде всего, это рента с природных ресурсов, культуры, властных институтов, о^ социального капитала и приватизации общего знания (Жижек, 2012). Усиливаются о контуры глобальной сервисной экономики, где основная масса занятых обслуживает

each other, and does not produce real goods, while automated production without workers and knowledge (intellectual property) become a source of rent for new capitalists, functionally commensurate with the basic role of land rent in the teachings of the Physiocrats (Gotnoga, 2013. P. 160-162) .

Accordingly, instead of theories of market pricing, the center of political theory and the new political economy is the question of the conditions for people's access to resources and the mechanisms for their distribution. First of all, we are talking about rent, which ceases to be an exclusively narrow and specific economic concept, covering a variety of economic and non-economic resources, as well as determining the economic and non-economic conditions for its receipt by citizens and social groups, being associated with the possession of the latter not only economic, but also political, cultural and symbolic types of capital (Bourdieu, 2005).

Moreover, the expanding service economy is only marginally

belongs to the high-tech post-industrial sector, which allows

consider it rather as a largely palliative way to compensate for mass

employment in agriculture and manufacturing than the new independent

economic structure. Meanwhile, in the conditions of stagnation of the usual agrarian and

industrial markets, the role of rent from technology and knowledge is only increasing, while

while the resources of people working and exploiting it are declining. As a result, for

securing rents from the intellectual property underlying the latest ^

cognitive segment of capitalism, one has to resort to an uncontested

the state with its threat of legitimate violence for violators of intellectual property rights, patents, know-how, etc.

arising from the waste and exploitation of the resources of the life world of people. Accordingly, the expansion of social capital and post-material values in late modern society is not so much the result of the development of market relations, but a necessary condition for capitalism to develop further in the conditions of the suspension of economic progress.

An additional problem in understanding the new global rent order is the situation when the economic mainstream at the normative level associates the rent orientation of society either with the considered archaic institutions of the past (land rent of the aristocracy), or as a pathology characteristic of neo-feudal and neo-patrimonial societies, natural states and other peripheries of modernity. . Accordingly, various transitological recipes are formulated, designed to reorient the state, the economy and the elites of backward societies, in relation to which the concepts of democracy, capitalism and the market are used only with negative adjectives (authoritarian, oligarchic, facade, limited, controlled, illiberal, etc.), from the search for and distribution of rent to development institutions, mainly associated with the free market.

b- It seems that this increasingly less relevant progressor /

0 transitological research optics can be changed if we consider the latest political history not as an illustration of the development of the market

^ capitalism, but as an evolutionary change of subjects, sources and principles - the distribution of rent in society. Rent can be defined as a resource of the subject, ^ obtained as a result of a privileged institutional position ° or exclusive access to limited resources. This is rent, which is more and more often generated not by the open market, but by the state. ^ Accordingly, the second key problem becomes the question of when,

1 to whom and for what the state distributes rent, how the principles of such distribution and the composition of recipients change.

Rent resource mechanisms are formed, as a rule, as a result of the historical institutional fixation of individual or group rights and advantages (privileges). Rental rights and their scope are derived, first of all, from the ownership of the rental resource (real estate, citizenship, belonging to a privileged class, etc.). The rental model of society is largely derived from the model of distribution of power and property in a particular society. As modern capitalism develops, property rights become more and more differentiated, and the functions of owning and managing property, capital and other assets diverge more and more, when hired top management receives the rights to actually control and dispose of managed assets. In the most radical form, the revolution of rent-seeking managers took place in modern Russia, when the nomenklatura and business directors formalized private rights ¡2 of ownership to public / state property, which they had the right to only dispose of in the USSR. Paradoxically, privatization has become a way of creating in modern Russia not market capitalism, but a closed rental society, where the differentiated distribution of rental assets is determined not so much by the principles of free competition as by power hierarchies, p: associated with the phenomenon of power ownership, where the rights of large property b: are an inseparable derivative of the right to power. And the basis for access to the distribution of rent is the recognition by the state of the status

individual or social group. o Enormous and underestimated by the economic mainstream for

<с увеличения общественного неравенства по-прежнему играет не только о^ опережающий прирост капитала, но и постоянный рост стоимости недвижимости, о прежде всего, земли, находящейся в руках землевладельцев (Rognlie, 2014). Все

a large share of the social fortune is in the hands of the super-rich. For example, in the United States, the income share of the top 1% increased from its low of 7.74% in 1973 to 18.39% in 2015 (The World Wealth, 2016). The bourgeois class seeks to avoid political, non-market restrictions on wealth growth by multiplying its non-economic advantages from generation to generation (Mills, 1959, pp. 143-160). Meanwhile, over-accumulation and high profitability of rent from capital is regulated precisely politically - through increased taxes. Moreover, high taxes are not even on the rental income themselves, but on their derivatives - property and consumption (expenses). At the same time, in a few welfare states (France, Germany, Sweden, Finland, Japan, etc.), the growing inequality of capital and labor is compensated politically, through a progressive tax system, due to which, according to statistics, inequality practically does not grow, while peripheral capitalism significantly limited in these alignment mechanisms. Therefore, initial inequality is greater in developed countries, while actual inequality is greater in the rest of the world. This is the key role of real democracy. Other political regimes also distribute, but it is democracy that redistributes under capitalism in the most efficient and egalitarian manner for the development of all social strata of society in the long term. At the same time, in limited time periods of accelerated (catching up) modernizations and military threats, authoritarian regimes are often more effective.

The dominant economic theories, despite the expanding crisis of the market model of capitalism, still see capital and labor as the main factors of economic development. Indeed, under the conditions of the initial phase of the expansion of classical capitalism, rent from such traditional economic factors as space, geography, natural ® resources, legitimate violence temporarily gives way to the resources of labor and capital. ^ The free spirit of wild capitalism is manifested in the geographical development of new x markets, expansion into new markets and colonies, the creation of new industries and the realization of technological advantages. However, the increment of capital is still determined by its profitability, that is, literally, by rent intensity. In fact, at the level of economic terminology, there is a clue that mainstream economic thought ignores - the measurement of capital in terms of rent. The ideological factors of the transient historical moment of the struggle between the class aristocracy and the new bourgeoisie have acquired the meaning of basic economic truths, entered the vocabulary of modern economic theory, which strives to see the spirit of entrepreneurship and private initiative legitimizing capitalism in all economic processes. Although at a more fundamental level, there is only a search and distribution of rent - raw materials, power, administrative-political, etc. Confrontation of the new bourgeoisie, legitimized through the superiority of the values of entrepreneurial initiative, equal competition, risk and commodity production over the landed aristocracy S-with its passive rental income , retained its rhetorical meaning even after the ¡2 victory of capitalism. about

The free spirit of the market, operating in a competitive environment, is ¡^ an important part of the rhetoric of the elites, who benefit from presenting a monopoly on rent from certain resources or access to scarce resources itself as a legitimate and g worthy reward for their work or entrepreneurial risk, and not as f privilege for the few. Selectively reanimating classical liberalism, neoliberalism as the legitimizing and consolidating goal of capitalism presupposes the creation of powerful commodity markets with strong competition, promoting progress, innovations, new opportunities for everyone, reducing costs and fighting for the consumer to the benefit of the latter. But do such< рынки не в моделях, а в экономической реальности, и не является ли утопической q^ идея сохранения равенства условий участников конкурентного взаимодействия на о

long time period? Especially when competition in these markets increases, risks increase, and the rate of profit falls, then market actors increasingly begin to look for non-economic (non-capitalist) advantages associated with political lobbying, power business, corruption, monopolization, collusion of producers, barriers for competitors, etc. In this context, the logical ultimate goal of the strategies of subjects in crisis markets is the transition from declining profits to guaranteed rent.

Therefore, the classical scheme of self-regulating markets by A. Smith

is only a substantiation of a specific historical model of an expanding

capitalism, which actively freed itself from external regulators (the state,

church, traditional morality, guilds and guilds, etc.) and received at the expense of

expansion and deregulation of high profits (wild capitalism, model

laissez-faire). A. Smith's model of unlimited competition, proposed at the dawn

capitalism, as subsequent history has shown, is not at all a natural

state and strategy of economic subjects of capitalism. Any capital

any economic actor strives in its limit to rent as

the best way to make a profit. In fact, capitalism

focused on growth factors such as capital and labor can

o be regarded as the initial stage of expansion, which is contrary to

long-term laws of capitalism associated with rent

0 I development mechanisms. In the phase of the initial historical expansion, capitalism promoted the growth of personal autonomy, initiative, mobility and the birth of a new European subject - the bourgeois and the proletariat, the efficient entrepreneur and the skilled worker. New subjects of the economy

® were able to initiate first limited and then universal procedural democracy. However, the subsequent rental capitalism in the conditions of curtailment

1 open markets no longer benefit from increased citizen autonomy, all

g more massively transforming from market entities into rent-oriented ones. AT<

Under the conditions of global rent (G. Standing) or corporate (C. Crouch) capitalism, the usual resource opportunities of free markets and the control functions of democracy are naturally narrowing, and the state is increasingly becoming the driver of further development of society (Crouch, 2010; Standing, 2011; Harvey, | 2007).

x It is now becoming increasingly difficult to ignore political

factors in the development of economic decisions, strategies and theories (Acemoglu and Robinson, 2013). In a global context, the autonomous market economic model performs worse when costs begin to rise: the demands of expanding social groups included in capitalist production; 5 strengthening of nation-states acting in their own interests contrary to the subjects of capitalism; intensification of competition and struggle for non-limitless markets, etc. As a result, the free market becomes in the long term too toxic even for itself, requiring stronger external regulation. The exhaustion of the Smithian model of capitalist competition is connected both with the complete geographical coverage of mankind by market exchanges, and with the increase in the intensity of competition, when advantages in an increasingly dense competitive environment g begin to be provided by non-market factors. Non-market competition leads to mergers, bankruptcies and acquisitions associated with political or frankly forceful regulation of the economy. As a result, the ideal-typical w competition of individual producers gives way to economic imperialism as the other side of globalization. Moreover, the subjects of imperialism, contrary to the early forecasts of R. Luxemburg and V. Lenin, are<с не только и не столько государства-метрополии, но и альтернативные субъекты - о^ ТНК, сети глобальных городов и др. В результате начинается новый цикл о огосударствления капитализма, который представляет превращение значительной

part of the market profit in rent from the state, depending on the specific tasks of business development/survival - obtaining a state order, privileges for national producers, state subsidies, etc. The success and influence of a business is also largely determined by non-economic factors - social significance, national security, lobbying, etc. others

An example of the economic miracles of China, Japan, South Korea, Singapore, etc., which, with the help of strict state regulation, planning and protectionism of various sectors of the domestic market, were able to make a fantastic leap into the number of advanced economies within 40-50 years, completely refutes neoliberal recipes free market. Moreover, if we take examples of exemplary liberal democracies and look at their real, rather than ideological history, we will see that “virtually all of today's developed countries, including Britain and the United States, supposedly the birthplace of the free market and free trade, got rich based on recipes which contradict the orthodoxy of neoliberal economics” (Chang, 2008). Accordingly, following this orthodoxy, as a rule, instead of developing, only fixes the peripheral economies in their dependent status, forcing them to play and lose by the rules of their superior competitors.

Thus, it seems that the increase in capital is the main goal of capitalism only in the historical phase of its global expansion, including colonial expansion, and the expansion of markets for products to dependent participants in the free market. Capitalism not only did not overcome rent as a key factor in reproduction, but also intensified rent relations, considering political institutions as economic resources in the hands of powerful subjects, and also increased the types and intensity of rent from technologies, inventions, innovations, and capital itself. Every successful business is really seeking ® rent. Sooner or later, it is corporatized when the owner capitalizes his ^ business. Its owners become shareholders, rent recipients, who hire both workers and managers, but may no longer be involved in the business themselves, considering it in the future as a rental resource. All modern large ^ business confirms the rental dynamics, as it is associated with natural

oligarchic trend - monopolization or oligopolies that reduce capitalist competition in favor of stable incomes of mega-corporations that have divided these markets in many ways by non-economic methods. Researchers currently identify a core of 147 interconnected TNCs that control 40% of the global market in which millions of other companies are trying to operate (Vital, Glattfelder and Battiston, 2011).

Moreover, apart from the axioms of market fundamentalism and

see what goals the companies that exist in the market set for themselves, then we will see

obvious paradox. Any basic marketing textbook as a strategic 5

the axioms of the subject's behavior in the market are called the way out of a competitive situation. E^

Whether it's creating a monopoly, participating in an oligopoly, forming a cartel, a new 5-

market, product niche or unique selling proposition. ¡2

Since a long stay in a state of open market competition is not about

can be effective, as it inexorably depletes economic resources ¡^

subjects and with a high degree of probability takes them out of the market. Thus,

more fundamental goal of economic activity than increment g

profit market capitalism, at all times is the search and consolidation of p

rental sources of income. While existence in a dense competitive

environment and the constant struggle of the capitalists for profits are too risky

way to survive and maintain wealth in the long run, so that he

really became normative for capitalism, especially when

limit of geographical expansion and saturation of sales markets.<

In such a perspective, the competitive market does not so much crowd out rental

mechanisms, how many parallel develops new activities, puts new

goals, multiplies sources of profit, creates new resources, which in time can become a source of new rent, which increases the final rent of society as a whole.

At present, both the leading and peripheral societies of the world economy demonstrate the curtailment of the free market in the context of the ever-increasing exhaustion of global limits on the expansion of demand/sales in favor of non-market economic entities, primarily the state. Global capitalism has exhausted the extensive geographic profit-making factors associated with mutually beneficial exchange between regions that, according to D. Ricardo, have competitive advantages in the production of various goods. Intensified competition in the free market fades into the background in the context of non-economic, protectionist rivalry between different entities for the redistribution of rental income. Suffice it to mention the multiplying, asymmetric and often unequal in their conditions even for the participants themselves, regional and bloc agreements on international trade and production regimes - the WTO, ASEAN, the EU, NAFTA, MERCOSUR, the EAEU, the League of Arab States, and the Trans-Pacific Partnership, which is in the process of formation.

The political reflection of these processes is the transformation of the struggle of modern ideologies with their desire for universalization and universality in favor of

0 expression of political requests that justify particular privileges associated with the exclusive access of certain world regions, societies, classes and groups to political rent. Associated with the political order of democracy, the model of the welfare state in a society without economic growth and mass labor loses its ability to provide universal guarantees, and still available electoral rents become an object of

® political lobbying of various group interests. Moreover, the implementation of compensatory mechanisms of the welfare state is increasingly

1 involves obtaining a rental resource for distribution or privileges

- location of national economies at the top of the global technological chains, involving a monopoly / oligopoly and high value added of the goods / services produced. Either self-exclusion of society and its resources from global production chains and market exchanges in favor of building its own closed quasi-market, where there is no external pressure.< конкуренции. Этот утопический вариант требует ресурсной самодостаточности, х кроме того автаркия не может развиваться так же быстро, как остальной мир. =§■ Таким образом, кризис глобального рынка, который больше не может создать

new jobs, constantly threatens bankruptcy of competing economic players and is unable to provide conditions for compensating ^ growing inequalities of the welfare state, forms the conditions for the rental capitalism model. This idea is also confirmed by the fact that the financial sector (banks, insurance, pension funds, government bonds, etc.) is the organizing basis of current global capitalism, which lends to the entire real, manufacturing sector. And what is it at its core if not about rental capitalism - guaranteed, secure interest on disposable capital ¡^?

^ Finally, of increasing importance in the global context of the post-Fordist,

^ cognitive capitalism is acquired by the institutional organization of rent co p: knowledge by organizing closed access to it with the help of security procedures b; and potential reprisals. Since only the restriction of access to knowledge makes this resource profitable for some time: “the exchange value of knowledge depends entirely on the practical possibility of restricting its free circulation, i.e. legal (patents, copyrights, licenses, contracts) or<с монополистскими способами ограничить возможность копировать, подражать, ее "перепридумывать", перенимать знания других. Иными словами, стоимость знания о не является продуктом естественной редкости, но вытекает исключительно из тех

restrictions on access to knowledge, which are established institutionally or explicitly ... the rarity of knowledge stems from the ability of "power", whatever its nature, to temporarily restrict its distribution and regulate access to it ”(Rullani, 2007. P. 66-67 ). In fact, capitalization and intellectual rent of the intangible segment of the economy based on knowledge can be artificially provided only by the state, maintaining a limited hierarchy of access to knowledge, which creates their high value, although they are not traditionally a rare natural resource. Paradoxically, contrary to neoliberal orthodoxy, cognitive capitalism must rely on state support for its further development.

In the long term, the global rent model of capitalism is strengthened as the return on capital (r) begins to exceed the overall rate of economic growth (£), which is expressed by the formula r>g. As a result, entrepreneurs inevitably turn into rentiers. Rental mechanisms for the accumulation and distribution of capital are beginning to dominate more and more textbook models of the free market, competition and free enterprise. Moreover, this model leads to the concentration of capital in the hands of a few and the radicalization of social inequality observed in the global world. This scenario, according to T. Piketty's calculations, is only strengthening in the 21st century and has long since replaced the short-term egalitarian trend of the glorious 30th anniversary of the 20th century (1945-1975), associated with the ^r model, in which economic growth and an increase in the population's labor income prevailed over the rate of capital accumulation. , contributing to the expansion of egalitarian tendencies and the welfare state (Piketti, 2015, pp. 43-46). Thus, an attempt to create > a model of a welfare state polarization of wealth and income was only ® temporarily suspended, but not prevented as a result of two world wars and ^ the desire to build an alternative to capitalism socialist 1 modernity (Soviet Modern) with a centralized planned economy, more ^ egalitarian, non-economic mechanisms for the distribution of resources and communitarian principles of political management (Martyanov, 2010, p. 284-292).

Rent Capitalism: Political Consequences

The historical evolution of the political form of society is largely

due to an increase in the effectiveness of certain government institutions in

extraction and distribution of rent in relation to their institutional

competitors. The dominant political forms were those that

at a certain stage showed the best results in terms of the cost ratio for

coercion resources and extracting resources from this coercion,

ensuring the effectiveness of the political form. By the 17th century in Europe

the territorial state became the dominant political form, ^

ousted city-states, unions of cities, the church, orders of chivalry and

private commercial companies. However, globalization has once again catalyzed

processes of heterarchy, when political forms that, as it seemed before, ¡^

are an attribute of the historical past, are reanimated again as

competitors of territorial states forming the usual political

world map. A significant share in the management of resource flows is intercepted by p:

the progressive inability of territorial states to effectively

violence and control of resources inside and outside their jurisdictions, b) at the same ^

time shifting obligations towards citizens, about

transaction and institutional costs for the state, which ensures<

superiority in extracting various kinds of rent. For example, in Russia, according to some

It is estimated that up to 52% of financial assets are offshore, that is, they are removed from the tax jurisdiction of the Russian state, while in the world, on average, 8% of global finance is offshore (Eyeshan, 2015, p. 53).

The problem of resource control also lies in the dual nature of the state itself. On the one hand, the state represents an institutional platform for interaction and distribution of resources between elites and significant social groups. The state appears as an institutional mechanism for melting down and coordinating a multitude of private interests into universal legislation. And as long as the political and economic regime can maintain the illusion of representing the interests of society, it is legitimate. On the other hand, the state is a subject capable of acting in an autonomous logic of its own interests. But how will the state be able to observe the general interest, who will be the subject of this interest - the elite, the nomenklatura, the bureaucracy? It is obvious that all these subjects, claiming the identity of their interests with the state and even having some powers and functions to act on behalf of the state, are still not the state itself. Just as individual civil associations are not civil society as such. They carry out state functions, which in the institutional dimension are always fragmented and differentiated. The recognition of the autonomy of the state is, first of all, the recognition of the legality of the autonomous interests of the power apparatus. If we recognize that the state is a stationary bandit (M. Olson), acting not on behalf of society, but in its own interests, then political/bureaucratic rent is also legitimized when state agents become its privileged rent recipients. Accordingly, what is interpreted from the standpoint of the market as political corruption, in a similar logic, becomes a legitimate reward for state agents (Martyanov, 2016). The consistent identification of the interests of the power apparatus with the state interest leads to the fact that the bureaucracy “considers itself the ultimate goal of the state ... The bureaucracy has in its possession the state, the spiritual essence of society: this is its private property .... The open spirit of the state, as well as and state thinking therefore appears to the bureaucracy as a betrayal of its secret” (Marx, 1955-1975, pp. 271-272).

However, the sovereignty of national bureaucracies in controlling state rent is, in turn, eroded by the fact that in the capitalist world system, the distribution of resource flows is becoming increasingly important not only within nation-states, but also between its constituent states and world regions. At the same level, TNCs emerge that elude the institutional regulation of individual states. The resources available to the state are increasingly determined by volatile and uncontrollable external factors, for example, the position of the country in the hierarchy of the world economy or the dynamics of world prices for certain groups of goods. This position is not ¡2 unchanged and will be transformed historically sooner or later. Therefore, instead of managing the situation, the national elites generally have time to react only ¡^ belatedly to the current processes in the world economy, of which specific societies are a part.

^ The future of capitalism is closely linked to the historical transformation

P1 state. The latter acts as a guarantor of background, non-economic conditions, b; necessary for the existence of capitalism - security, law, morality, w infrastructure, etc. The state arose before capitalism, being connected in the economic sphere mainly with the distribution of resources. In any modern society, gift-exchanges (family, close<с окружение), дистрибутивные (государство) и рыночные обмены (капитализм), ее находящиеся в разных пропорциональных соотношениях (Поланьи, 2002). о Редистрибуция является распределением ренты через государство, в ее соотношении

with parallel mechanisms of the market and gift exchange. The historical expansion of first distributive and then market exchanges is usually interpreted as progress. Indeed, capitalism is associated with the expansion of the sphere of market exchanges, replacing the previously dominant forms of communication. However, at the present time one can again observe the processes of strengthening the mechanisms of redistribution, which confirm that in the rental model of capitalism the state remains the key economic mechanism, while the market is only an addition and extension in relation to redistribution.

Market and distribution areas in every modern society are effectively

correlated in different proportions, depending on the number of individuals,

organizations, enterprises, social groups that benefit from one or another

system of reproduction and distribution of resources. In peripheral societies, where

market exchanges do not bring clear benefits to the majority, will most likely

dominate distribution exchanges. Conversely, the possibilities of a particular

political community to profit from dominating the open

global markets determine their propensity to choose minimization mechanisms

distribution, when the profit from market exchanges is for the majority

sufficient without total withdrawal and redistribution of resources. But even in this

case, the expansion of the area of market exchanges and the reduction of the state ^

regulation cannot be infinite. No matter how archaic it may seem

distributive state, no matter how tempting alternatives it offers ^

the free market and alternative entities such as corporations and

networks of cities, completely abandon distribution in favor of free

a market that naturally radicalizes diverse inequalities,

impossible without exposing society to the danger of disintegration. Absence of a State >

immediately raises the question of who will restrain the expansion of capitalism and ®

compensate for its non-economic costs, for example, permanent growth ^

inequality generated by the markets? Otherwise, the growth of public 1

inequality provokes collective political action to eliminate

capitalism. From the standpoint of dominant neoliberalism, the reduction in the sphere of market exchanges is archaization, but this is only one of the possible

social perspectives on society. Redistribution of public

resources through the state in the conditions of rental capitalism allows you to keep

relative stability of the political order in the presence of constantly<

growing mass of rent-seeking citizens. Here, instead of the original

legitimizing the function of ensuring the security and protection of citizens from threats ^ the state is additionally legitimized as a mechanism for reducing

market-generated inequality, as a means of ensuring social justice about

through rental equalization. ^

Thus, the global world is now entering a new phase of

rental capitalism, connected not so much with free competition in the E^ markets and for markets, but with the non-economic redistribution of the markets themselves. The key player in the model of emerging rental capitalism is

the state - both as a mechanism of institutional control and as a subject ô

distribution of resources (rents). If the state can be seen as ¡^

mechanism for extracting, multiplying and distributing rent in society, then its ^

history in many ways appears as a permanent struggle of social groups, g

corporations and parties for changing the principles of rent redistribution. The new rent-class majority in their rights and opportunities is increasingly dependent on

not from the ability of individuals to work and compete in a shrinking market, but from status, belonging to a certain class, political community,

the level of disposable social capital and the derivative of these parameters about

political right to rent. Accordingly, the growth or simple preservation of income<

of the majority of citizens living in wage or self-employed labor, q^

only through an increase in the rent component of their salaries or a reduction in the number of employees with an increase in productivity, which leads to an increase in structural unemployment.

In such an economic context, the political order of democracy can be seen as the gradual connection of large sections of citizens to the rent distributed in society. It is democracy that provides the mechanisms for the most effective public distribution of rents associated with investments in human capital - education, medicine, social housing, guaranteed income, infrastructure, public goods that provide further development for the whole society. At the same time, a truly functioning democracy, based on rights for the majority and not reducible for this majority only to measured electoral procedures, is a constant source of unpredictability, civil conflicts and revolutions as the flip side of freedom. Therefore, historical democracies exist as institutional rental models, periodically reconfigured through elections and rotations of elites depending on changes in the interests and demands of class coalitions, which also change over time.

The liberal consensus of the economic classes at the heart of the modern political order can be seen as the value expression of the rent relations that have developed in society. And the latest global trends in the modification of the radical neoliberal consensus into a more communitarian

0 I reflect the institutional dynamics of changes in the ratio of social groups - and the distribution of political rent (Fishman, 2014). In this political

From a perspective, citizens and social groups can be viewed as subjects ° that choose democracy as the most acceptable, optimal for the # majority way of distributing available resources (rents). Participation in democracy, in the management of society is an analogue of market activity, and profit is

1 all kinds of resource rent from this participation - empowerment, security, fair taxes, social guarantees, benefits, pensions, other public

good. In this logic, any political device can be considered as

o rental mechanism, which implies certain hierarchies of priorities and

rules for citizens' access to the total resources of a particular society. Under conditions of democracy and open access societies (D. North and others), the potential of citizens' access to basic individual rent reaches its apogee, participation in rent distribution becomes universal.

In the political dimension, the crisis of the free market turns into a crisis of the usual electoral democracy. There is a growing radicalization of social inequality in access to rent, which, as a consequence, will: lead to a weakening of the legitimacy and viability of nation-states that are curtailing the model of the welfare state. In the face of reduced available resources, democratic states are abandoning the ideology of 2. multiculturalism and cosmopolitanism, are actively blocking access to citizenship, and are experiencing increased nationalism and protectionism. In the world-system perspective, there is a growing contradiction between the locality of political communities, the center of the world economy/welfare states, which receive infrastructure rent from global capitalism and distribute it 2 within closed, albeit democratic communities, and the rest of the world, which mostly faces costs. similar hierarchy.

Accordingly, democracy also reveals its limits: it allows for a more egalitarian distribution of rents within a particular political community, but it is not an inevitable image of the future for other societies. In the rental model of capitalism, closed institutions and orders increasingly triumph, when the condition<с высокой ренты является исключительное положение человека, социальной группы о^ или общества в иерархии миросистемы. Кризис демократии в свою очередь о оборачивается обманутыми ожиданиями от ложного тождества рыночного

capitalism, representative democracy (and often in its only limited, elitist-electoral version) and the welfare state - popular both where this identity was observed for a certain time, and where it never began. On the periphery of the world economy, the archaic transformations of the state are even more radical. From a set of institutions that provide citizens with public goods and public services at the expense of taxes, the state is increasingly turning into an extractor of administrative rent, acting in its own interests and increasing various redundant functions (Paneyakh, 2011, p. 42).

On a global scale, states begin to evolve towards their natural state, when, as a mechanism for limited access to resources and rent, they nationalize the costs and externalities of large corporations, but at the same time they are less and less effective for the growing dangerous classes - the unemployed and the precariat, people with insecure, precarious employment. (Standing, 2014). The hereditary monopoly of the elites on the disposal of public rent begins to strengthen again, while the volume and depth of the redistribution of rent even increase. Structural unemployment becomes a necessary component of rental capitalism in the form of social groups dependent on the state for rent, exchanging political loyalty for survival rent and thereby creating the desired anti-modern consensus. Moreover, the reserve army of labor in the form of the unemployed, in fact, is also exploited in the form of non-admission to the market, where you can sell, albeit with losses, your labor as a commodity. Therefore, “the category of the unemployed must be expanded to cover a wide range of the population, ranging from the temporarily unemployed, the disabled and the permanently unemployed, including here also those who live in slums and other types of ghettos (whom Marx himself rejected as a “lumpen proletariat”) , and ending with entire ® regions, peoples or states excluded from the global ^ capitalist process and resembling empty spaces on old 1 maps” (Žižek, 2012, pp. 28-29). |

In the discourse of progress, such popular institutional economists as

like D. North, they associate modernization as the very way of existence in modernity with open access societies, which are gradually replacing natural states or, in the terminology of D. Acemoglu, extractive institutions. In a natural state, only the elite has access to rent; in a modern state, rent, although differentiated, is extended to the entire population. An institutional configuration that meets such conditions does not so much endow society with new opportunities, but more effectively eliminates the negative costs of being inside the capitalist society.

world-system in favor of the opportunities it provides for growth and development: “...on ^

for a very long time since the discovery of the rural

economy and ending the XIX century. economic growth per capita was E^ unusually low, practically equal to zero. Every historical event

economic growth was more than offset by a case of economic decline... ¡2

The stable economic growth of the last few decades has become a

the result of a reduction in the impact of negative shocks on the public product, rather than an increase in growth rates in the years when this product

is growing” (North, Wallis and Weingast, 2011, pp. 417-418). ^

In the transition from the natural state to the open p:access society, it is argued that "individuals continue to be motivated

economic rent in both the political and economic markets, but with the presence of open access stimulates competition, which makes such

rent is only a temporary phenomenon” (Standing, 2014, p. 418). It appears that about

here the desired is presented as real, and having a transient character<

rent is a more stable phenomenon than that which should displace it from o^

economic and political spaces, and since the ability to

to provide citizens with broad benefits on an impersonal basis, even the societies of the center of the world economy lose, ceasing to be an achievable, motivating example for all social forces interested in the transformation of natural states. Accordingly, open access orders turn out to be ideal-typical constructions that more often form a protective, adaptive shell of varying thickness over modern societies than are the predominant mode of their existence. Such modern phenomena as a competitive market and free market pricing, class society and representative democracy, even in the societies of the center of the world economy, are too overestimated and ideologized addition to the dominant rent mechanisms in economics and politics. Therefore, in the context of the rent basis of society, there is no fundamental political difference between the natural state and democracy; rent differs only in the modification of its distribution.

Moreover, historically, in the center-periphery model of the world economy, the leading economies could increase the potential of the welfare state and open access society only by radicalizing global inequality and the volume of rents extracted from their position. In fact, the welfare state model in the West was successful only under conditions of a global e-technological monopoly, when the rest of the world represented markets and sources of raw materials. The potential growth of the power of the new industrial states deprives the post-industrial leaders of their usual rent advantages. A faster increase in per capita GDP in the periphery and semi-periphery in the 5th optimistic scenario leads to a long-term alignment of world-regions (Global Economie Prospects, 2016). The economic, demographic and military strengthening of the sovereignty of large non-Western countries makes it difficult to withdraw rent income in the paradigm of economic imperialism.

1 Finally, the reformatting of

g of the general social structure of society under the influence of the rental model of capitalism. ¡J The welfare state model was the highest development of the mechanisms and principles of egalitarian rent distribution in society, including the Soviet version. This mechanism created the social structure of late capitalism associated with the expansion of the middle class. It is natural that the ontological consequences of the neoliberal economic model lead to the shrinkage of the middle class and the destabilization of the political order of modern democracies in which it played a key role. The dissolution of the middle class in the new social structure is masked by the neoliberal rhetoric of the growth of a limited creative class, although real trends suggest otherwise -

s mass transformation of the middle class into a dependent precariat.<

Conclusion: the contours of the political order of the rental society

In strong market societies, the distribution of resources outside the economic ¡2 market follows a market-like competitive model, hence Q emerges as a key metaphor for the political market of democracy. In the rent-bearing political order, on the contrary, the market is on the periphery of social communications, and its metaphors are all the more not embodied in extractive and increasingly hierarchical political institutions. The growing tendencies of demodernization, archaization and feudalization as a return to the natural state are expressed in the form of an expansion of the area of distributive exchanges as ways of distributing social resources, while the shell of market regulation is being exhaled. The growth of rent-dependent strata of the population strengthens the state. The share of modern government spending in 3-4<с раза больше, чем 100 лет назад, достигая 50-60% ВВП (Сухарев и Нехорошев, 2011. о^ С. 5). Актуализируется общий сдвиг конкуренции за ренту с национального на о глобальный уровень. Поэтому в позднемодерной мироэкономике ослабляется

the stratifying role of economic classes, but the importance of territorial nations as political communities that give access to rent through the right of citizenship is enhanced. As a result, the factors of capital and labor recede in the face of a more fundamental factor of survival - the possession / control of resources that allow extracting all sorts of rents. In turn, rent is a derivative of the problem of property control, which becomes more important than competitive advantages, credit as an engine of production and demand, labor, transaction costs and other variables whose influence is associated with easily disappearing, temporary and unreliable advantages. At the same time, property is always associated with power, it is provided by the very political order of society, which largely removes it from the number of purely economic factors of development.

In a democratic welfare state, for the first time, all citizens are endowed with potential access to rent. A new political problem lies in the differentiation of this access depending on the position of the citizen within society. The expansion of rent mechanisms is more and more clearly manifesting a negative estate trend in democracy, when the differentiated struggle of different social groups begins to go on at different levels: for the majority for basic rent, for different minorities - for privileged rent. In natural states, there is a general curtailment of the welfare state model and egalitarian access to rent, when, in fact, only the networks and spaces of large cities can maintain democracy, since it is in cities that the necessary demographic density, community of interests of citizens, individual autonomy and efficiency are achieved. organized collective action capable of influencing > the political choice of the elites. The contours of our rental future are seen as a ® variable alloy of egalitarian and hierarchical models of resource allocation. ^ In this case, it may well happen that the first option, which assumes a universal 1

access to rent, at least within the concept of a basic unconditional income, would be

implemented in the societies of the center of the world economy, and the second will remain the lot of the periphery, where superfluous people can be dealt with much more cruelly. about

These trends in the political dimension turn into an institutional crisis of democracy, which in its economic dimension assumes egalitarian mechanisms for the distribution of general rent. In fact, the degree of real democratization of modern society directly correlates with the number of citizens admitted to rental distribution mechanisms. Therefore, the neoliberal economic policy, oriented towards the curtailment of social rent and state regulation, leads to radicalization of social inequalities and conflicts, to a natural limitation of democratic mechanisms. The crisis of democracy is intensified by the fact that democracy in modern societies is increasingly being understood only as its E^ results - public goods, social guarantees, various types of rent and rights, etc. However, the conditions of all these benefits, associated with the necessary and constant ¡^ participation of the majority in the reproduction and support of the institutional conditions for the egalitarian distribution of social resources, are perceived as once and ¡^ forever established, self-evident. The procedural and diachronic aspects of democracy are completely out of sight, it is believed that democracy was established by some key historical event and its consequences are irreversible. p In a consumer society, participation in democracy is increasingly being interpreted from a won right to a burdensome duty. However, Xia democracy is won and recreated continuously, as a way of life, any suspension and relaxation is detrimental to its revision and, as a result, the abolition of civil rights. about

As a result, private appropriation (privatization) can be observed.< государства, публичных должностей и полномочий, которые становятся источником ^ ренты для должностных лиц. Соответственно становятся невозможны и процедуры о

open, rational legitimization of the elites and their decisions. At the same time, legitimation through reliance on tradition (sacred) is no longer effective, and charismatic legitimation is unstable over time. The natural state is globally returning in the form of a rent-class or neo-patrimonial order as “a systemic form of production and appropriation of political rent based on the monopolization of the power-administrative (power and fiscal) resources of the state by various groups of political entrepreneurs and / or bureaucracy” (Fisun, 2010. P. 168-169). Such a system forms a stably self-reproducing anti-modern consensus of rent-dependent social groups, which hinders any transformations related to both the expansion of the independence of market agents and the transformation of a resource-distributing state. Therefore, the increasingly popular service model of the latter, which primarily provides services to its citizens, rather than distributing resources hierarchically, is more of a desired image of the future than a reality even in the most developed societies.

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