From Social Fragmentation to Peace Humanness, States, Modernization, and Welfare 1

Christopher Lloyd chris.lloyd@une.edu.au

INCOMPLETE DRAFT III October 2016

Abstract

Explaining the process of construction of more or less integrated, peaceful, trustful, and egalitarian societies out of socially fragmented and conflicted backgrounds is a large problem for all the branches of historical social science and for socio-economic development policy. The topic can be approached only through the broadest possible framework of intellectual enquiry, including historical anthropology, historical sociology, economic history, and socio-economic developmentalism. Of vital importance to this task is the study of the universality of humanity as a fundamental ontological foundation for social integration. This chapter re-examines certain general interrelated issues about this great transformation. How can we explain the social pacification enjoyed by some countries? Has the emergence of the concept, science, and idealisation of universal humanness played a role? What is the non-linear interconnection between economic development, democratisation, the interventionist modern state, welfare regimes, and social peace? How are the advanced, relatively socially harmonious and welfarist regions structurally related to the rest of the world historically and today? And what are the prospects for catch-up, modernization, and peacefulness of the less developed regions within the present global context?

1 This overlong and unfinished chapter represents an attempt to work through the various historical, ideational, socio-economic, and political dimensions of the emergence of peaceful societies and as such is too long for a book chapter so will be reduced later into a summary form.

2 Structure of the Argument Introduction: Social Peace as a Problem for all Socio-Human Enquiry I Social Conflict, Social Integration, Uneven Development, Modernization, and Welfare in the Long-Run: How can we Analyse this Complex Historical Interconnection? II Digression: The Current Crisis of Integration in Long-Run Perspective III Human Sociality, Civility, and Integration and their Role in the Emergence of Peaceful Social Democratic Societies From Aristotle to Social Democracy Against the Challenge of Nietzsche and Towards a Foundation for Universal Humanism Universal Humanism and the new Anthropology Foundation of the Social Democratic State IV Uneven and Evolving Processes of Transformation and Class Compromise: From Humanistic Thinking to the Material Conditions of Integration. From Positive to Negative Modernization: The Non-linearity of Capitalist Development

The Problem of Development: the Historical Centrality of Rent and the Strengthening of Monopoly Capital through the New Generalised Extractivism

Can Catch-up, Modernization, and Integration Occur Under 21st Century Conditions? V States, Development, and Catch-Up Over Time The Uneven Trajectory of Catch-Up Backwardness and Development Policy VI The Rise of Developmental States and Social Integration: From Conflict to Peacefulness Models of Developmental States: From State Capture to State Strength The Social Democratic Developmental State The Ordo-Liberal Developmental State The Asian Authoritarian Developmental State VII Globalisation, Backwardness, and Democracy in the 21st Century: Beyond Developmental States? VIII Towards a Possible Future: Social Investment and Post-Carbon States

3Introduction: Social Peace as a Problem for all Socio-Human Enquiry

Explaining the process of construction of more or less integrated, peaceful, trustful, and egalitarian societies out of socially fragmented and conflicted backgrounds is a large problem for all the branches of historical social science and for socio-economic development policy2. The topic can be approached only through the broadest possible framework of intellectual enquiry, including historical anthropology, historical sociology, economic history, and socio-economic developmentalism. Of vital importance to this task is the study of the universality of humanity as a fundamental ontological foundation for social integration. That some societies have been able to achieve the fortunate state of integrated, peaceful trustfulness has been a powerful beacon of hope for people around the world for more than a century. And not only has this possibility been attractive intellectually and instructive for policy making but also materially significant as large numbers of people have struggled to migrate to these ‘Advanced Western societies’ ever since the 1860s. This chapter re-examines the complex historical intersection of human, social, and economic forces that led to socially integrated and peaceful societies and raises the important question of the possible spread of these forces through development to more countries and zones of the world. The rise of democratic welfare states has been closely associated with social peace but that phenomenon needs to be contextualised widely. It may be the case that welfare is the result rather than the cause of peacefulness. And even within modern welfare regimes civil order may still break down for other reasons, particularly sectarianism, racial resentment, and even overt racism3. Furthermore, any assumed linear path of development from conflicted backwardness to affluence, welfare, and peacefulness by less developed countries in the 21st Century is also very problematic. This chapter re-examines certain general interrelated issues about this great transformation: (i) How can we explain the social pacification enjoyed by some countries? Has the emergence of the concept, science, and idealisation of universal humanness played a role?

2By ‘peaceful, trustful, societies’ is meant those societies in which there has been more or less eliminated (not just driven underground) the pressures for large-scale social conflict of feudal, class, sectarian, racial, economic, and political kinds. Small-scale conflict, such as local riots and political protests, may still occur and, of course, criminal violence is always present to a greater or lesser extent. The idea of peaceful societies is not the same as peaceful international relations that might result from peaceful and/or liberal democratic societies, about which there is a separate debate. See Wenar and Milanovic (2008),……..Mousseaux… The idea that peaceful societies are ‘constructed’ is important to the analysis for the history shows that peacefulness can be the outcome of a process only of conscious human collective agency, requiring widespread deliberate social co-operation and so the conditions under which such co-operative agency can arise and be effective are central to the historical analysis. Such an analysis should also show that the basic conditions of peace can be undermined and even collapse. The trajectory between fragmentation and peace can go in each direction. 3 There have been significant cases of violent civil disorder even in advanced states with developed welfare regimes, such as Northern Ireland, and in Middle Income quasi-democratic states such as Yugoslavia. Austria had one of the most advanced welfare regimes of the 1930s but this did not prevent the outbreak of civil war. Of course Nazi Germany also had one of the most developed welfare regimes of its time, albeit violently excluding ethnic minorities. And having high average national income in the 21st Century does not necessarily ensure social peace, as some MENA states, such as Bahrain, testify. And, in 2015-2016 the spectre of social violence at the hands of national citizens practicing large-scale terrorist attacks has arisen in some Western states.

4(ii) What is the interconnection between economic development, democratisation, the interventionist modern state, welfare regimes, and social peace? (iii) How are the advanced, relatively socially harmonious and welfarist regions structurally related to the rest of the world historically and today? (iv) What are the prospects for catch-up, modernization, and peacefulness of the less developed regions within the present global context?

I Social Conflict, Social Integration, Uneven Development,

Modernization, and Welfare in the Long-Run: How can we Analyse this Complex Historical Interconnection?

The peaceful construction of the past century in some places was a very unusual development from the perspective of the long-run of societal history. The world has been riven with class, sectarian, and geopolitical conflict for millennia and especially in the era from the 16th Century onwards of global imperial competition, the emergence of ethno-nationalism, and violent formation of nation-states out of imperial states. The conflicts between the imperial, national, religious, racial, and class ideologies and collective affinities of people have prompted great violence down the centuries on all continents. Perhaps we could describe all this violence as the curse of the diversity (rather than commonality) of human collective consciousness and its material roots. That is, the motivations for participation in collective and organised violence have sprung ultimately from the deep and passionate commitments that many people have to forms of local, class, cultural, and ideological identity and affiliation, which, in turn, have reflected individual and collective interests (material and ethnic/linguistic) that are understood as competing and conflicting with those of others. This is not Hobbes’ war of all against all as a sort of primitive socio-biological impulse but of collectively motivated and organised violence, often at the behest and motivation of rulers, with greed and survival by both rulers and ordinary individuals at stake4. Of course, domination, subjection, competition, ruling class ambition, and popular struggles against these, have been a fundamental aspect of all societies for millennia (Tilly 1990). But it is quite a different matter to argue that violence is inherent within human nature. There is no empirical foundation for that claim. Rather, it is essential to understand that social fragmentation and violence are products of disordered, even dissipated, social and political structures, which, in turn, have roots in deep structures of economy, social relations, culture, and political organisation that have long-run path dependencies. The

4One of the best examples is provided by the English Wars of the Roses in the 15th Century in which two factions of the ruling dynasty and their allies fought an endemic conflict with many battles that had lasting consequences for the governance of the realm, economic activity, and the ownership of landed property. This was not a class but an internecine struggle. The seizure of the landed wealth of defeated nobles was a prime motivation for elite engagement in the conflict but with great inherent risks to life and limb. Another Medieval example is the ostensibly religious Albigensian Crusade of the 12th Century, which was in reality a land grab by northern French nobles against the territories of independent southern lords in SW France. The socio-cultural motivation of competitiveness of the medieval knightly class, with attendant sexual motivation, was also a factor in both cases. For the ordinary peasants who formed the soldiery the prospect of plunder was a motivation, notwithstanding coercion by their landlords. There are many other similar instances through, for example, Roman history (especially last Century CE), the so-called Barbarian invasions, the Dark Ages, Medieval Europe, Mughal India, and early modern Europe.

5overcoming of these path dependent structures has been an essential condition for the emergence of social peacefulness from co-operative rather than coercive roots. Trying to understand and ameliorate the endemic or generalised nature of social violence has exercised the greatest Western thinkers from Plato and Aristotle onwards. How the complex dialectics of human nature, social relations, ethnicity, culture, economy, and government intersect has always been the core issue. The ‘solution’ to social fragmentation has usually involved the contradictory institutionalisation of the state’s (or sovereign’s) monopoly coercive power (always in collaboration with the dominant social class) over violence, individual liberty, and collective social agency.5 But from the late 19th Century onwards the undermining of the coerciveness of the authoritarian state in some places was achieved through the emergence of a strong liberal ideology and rich civil society, centred on voluntary associations, co-operatives, churches, labour organisations, political parties, widespread literacy, and education. This opened the way to the development of social capital and then the construction of a socially democratic society that subordinated the state to the will of the majority (or almost the totality in fact) of the people, which was then in turn able to reinforce the peaceful, more or less co-operative, support of the people. This was the achievement of the various historic class and ideological settlements that began to be constructed in a few places from the late 19th Century. Social agency then developed through a range of new powerful state institutionalised forms that together worked in concert with civil society to achieve consensual social peace. These forms included social democratic state apparatuses of welfare and public ownership of productive enterprises, labour organisations, and non-government associations. (Fig 1 attempts to map these intersecting forces.) Together these agential forms produced a social construct that was widely accepted because it produced a result that was perceived as materially and culturally ‘fair’ or ‘socially just’ as well as peaceful. This outcome reflected, among other forces, pressure from new working class power, some ideological and material convergence of class interests in reinforcing trust and peace, sufficient economic surplus to permit redistribution from wealthy classes via high wages and progressive taxes, as well as social exhaustion from conflict and fear. All these were essential but there is even more to explaining this momentous shift, to be discussed in detail below. This remarkable process of class and ideological convergence and stability that began in a few places from the late 19th Century, started to spread more widely to other places from the late 1940s only after the terrible violence of the early 20th Century, or after what T J Clark (2016) has called “the terrible will to change of the earlier 20th Century”. The era from 1914 represented the collapse of the earlier movement to social consensus-building and international co-operation in the face of imperial rivalry and economic collapse with social regression to dehumanised violence. And it was not clear for some time after 1945 that peace would survive beyond the early 1950s. The consolidation of nationally-defined and stabilising state power in the developed world played a large role and the growing demand from the majority of the populace there for control of that state power was also important though not always resulting in peaceful co-operation, as the cases of Fascism in the interwar period had shown. And not only was there relative social peace and welfare in the advanced Western democracies from the late 1940s, there was relative and growing personal liberty and tolerance of thought, consciousness, behaviour, culture, and political ideology, despite the conservative hegemony of the Cold War. Universal and constantly

5 A good example of the sovereign imposition of peace was Tokugawa Japan from the early 17th Century until the mid 19th, so much so that the nation lost the social and technological capacity to wage war, which had been so prominent in the preceding era.

6extending liberal education played an essential role by opening ideological formation and social understanding to all members of society. The controversial concept of ‘modernization’ can still be useful as a summary of this fundamental process in the world social and political system of the past century or more. Fig 1.

Of course all these topics and related ones have been much discussed and argued about but what makes a re-examination urgent is the realization that the “global development agenda”, the related “catch-up agenda”, the “welfare state agenda”, and the “European social model and integration agenda” are all failing in the 2010s, due in large part to the ongoing global economic crisis and the mass movements of people caused by war and oppression in many peripheralised regions. The current crisis is pervasive and the agents of economic development, social integration, social equality, and social welfare, are all in trouble. Extending the paths out of poverty and social fragmentation to include more of the world is proving to be a much more difficult task for policy and political actors than thought in earlier decades. And, indeed, defending the peace in the erstwhile most peaceful societies, is proving difficult. Approaching the problem with anything less than a combination of historical, economic, social, political, and anthropological perspectives is bound to be inadequate. Seeing the multi-dimensionality and historicity of the problem is the place to begin, as is now well recognised by the United Nations Development Program (UNDP 2016). 6

6 Three seminal works from the mid-to-late-20th Century that attempted this rich interdisciplinarity and the historical specification and critique of market societies, and which are still highly significant contributions to the current discussion (but there is not the space here for a critique), are: Karl Polanyi, The Great Transformation (1944), Barrington Moore, Social origins of

7II

Digression: The Current Crisis of Integration in Long-Run Perspective It’s important to stress the relative rather than absolute nature of the characterisation of “advancement” in that there have always been serious deficiencies in these countries in the scale and character of integration of economies and societies, not least in social and gender equality and in the democratic character of the polities. The degree of integration should not be overstated, as it tends to be by nostalgic harmony liberals and social democrats looking back at earlier decades (eg Timmermans 2016). Nevertheless, compared with the preceding era of the 19th and first half of the 20th Centuries and with much of the rest of the world still, this construction was remarkable. But not much of the world has yet achieved the status of advanced peacefulness, democracy, and welfare. While social perfection has always been illusory, in the 2010s, however, all is not well in the ‘Western beacons’. This is a crisis decade rivalling the 1970s for long-term significance for the political economy of the Advanced West and in fact for the whole world. Global problems of economic growth and development, social integration, sectarian violence, forced mass movements of people, environmental degradation, and geopolitical rivalry, have all increased. Solutions to these local and global problems are not being found by official leaders, who have been captured or influenced by dark forces that have sprung back to life from the racial resentment and racist underground. The rising tide of social fragmentation and conflict is threatening the global economic and geopolitical structure. Pessimism abounds. What David Held (2016) has recently described as “the collapse of the politics of accommodation” is now threatening the post-war consensus. This is all a great contrast with the optimistic era (at least on the levels of economic and social integration) of the post-1945 Western ‘settlement’ and the 1950s and 60s ‘springtime of nation-states’ in the global periphery with their hopes for the engineering of economic prosperity. A new phase of hope, especially for liberal elites, emerged in the 1990s after the collapse of communist totalitarianism, the ‘liberation of markets’ and civil societies, and the globalisation of the new economic forces of the capitalist millennial boom. But that ended with the onset of the global crisis from 2008 and the more general weakening, which the crisis highlighted, of the consensus around the modern liberal state under the problematic globalisation and anti-democratic trajectory of capital’s domination and erosion of democracy ever since the 1980s. The coming to a more or less full completion of the hegemony of the market state with the elimination of remaining areas of democratic and public interested provision is eroding one of the fundamental forces of social integration. And in the 2010s the mass movements of refugees from violence and economic collapse towards the advanced states is posing the greatest crisis yet of the social cohesion of those states, based, as most have been, on ethnic cohesion or at least an ideology of ethnic integration. The fact of the current crisis of the Western socially-integrated society is a clear indication of the merely partial and flawed nature of the egalitarian, integration project of the post-war decades. Was it always doomed to weaken and even fail? Was violence merely temporarily suppressed and/or projected outwards? Perhaps so, depending on the extent of the desired outcome. But there is reason to be optimistic because the deep forces that led to social peace have not evaporated. While Western states have traditionally retained an independent capacity for social control and violence, in some cases (notably the Nordic

Dictatorship and Democracy (1969), and Charles Tilly Coercion, Capital, and European States, 990-1990. The agenda they helped establish of a social science history approach is still pertinent.

8Region, The Netherlands, Australia, New Zealand, Canada, Switzerland) the state itself became, over time, dependent on consensus and relative social classlessness and equality. While radical egalitarianism in the sense of social levelling (whether up or down) is ultimately impossible in a capitalist society, compromises, social agreements, and redistributions have proven to be more or less durable, in some cases for more than a century.7 The future of the advanced Western model is a topic for the mention at the end of this essay, however; for the present, the issue is of the ideational, economic and political forces that operated historically to bring them into being and their significance for the whole world today.

III Human Sociality, Civility, and Social Integration and their Role in the

Emergence of Peaceful Social Democratic Societies The first force that must be examined is humanness and the possible existence of a shared instinctive impulse to peaceful sociality. A socially conflicted society is too dysfunctional to retain integral independence for long. (Of course societies can also cease to exist through conquest and absorption irrespective of their structural integrity) A certain degree of social order is necessary for social life and therefore individual life to flourish. Most violence (certainly severe violence) is socially pathological. But social order is not the same as social integration and civil peace. Peaceful and co-operative integration is a fundamental social good and is the normal desire of all except a few delinquent people. But civil peace has been difficult to achieve or sustain and has only recently emerged as an outcome of collective sociality, rather than from authoritarian imposition. The roots of socially-generated peace have to be found, in part at least, in the possibility of humans to live in harmony rather than in conflict, and if that possibility can arise and flourish from the natural capacity of humans. How an ordered, integrated, peaceful society could come into being has been an issue for millennia, especially given that it had not or rarely existed. The poles of possibility for engendering order are given by the contrast between the imposition of dictatorial sovereignty upon the masses and the arising of popular and co-operative sovereignty from the people collectively: peaceful but illiberal government by imposition of authority versus peaceful government by popular, conscious, co-operation. The latter can only arise from the innate capacities of people, of course; creating an organic solidarity of social capital and trust in order to create a society of civility if socio-political and ideological conditions allow. Such conditions are not a priori but can emerge from human collective agency if, in

7The extended discussion by Malcolm Bull (2005, 2006, 2007, 2011) of the possibilities of the egalitarian project from the French Revolution onwards, including the ideas of Marx, Nietzsche, and Gramsci, is revelatory for he shows how the topic has dominated political theory throughout the modern era and has a deep contradiction at its heart. But see the discussion below of how this contradiction might be transcended by recent scientific socio-biological theory (such as that of Bowles 2016). Earlier, Karl Polanyi (1944) argued for the concept of a ‘double movement’ within capitalist societies in which the tendency to exploitation and inequality was necessarily counteracted by democratic forces that acted as a kind of ‘feedback’ against the tendency for markets and commodification to become extreme.

9turn, conditions allow. The interpenetrating circularity of these intrinsic forces for peace is necessary, obviously, but it’s not explicable or predictable by some multifactorial equation or general theory although theorisation of the nature of the forces is necessary to make progress in explanation. We can imagine and conceptualise, then, an idealised peaceful social arrangement as a socially democratic society in the proper sense of the term, a society that espouses and practices equality and participation of all. In this idealised society there is no need for class/elite dominance of power, or for class subjection, or for a state apparatus as known hitherto, for social and power inequality do not exist. The state of class rule disappears and is replaced by co-operative administration. Co-operation and inclusion will be understood as functional for all participants8. This was a vision that emerged out of the class conflict and socialist theory of European industrialisation as well as new thinking about human natural sociality, and contrasted with the thinking of a prior era when the universality of humanity was not the basis for political thinking. Inclusive social democracy was not the vision of most bourgeois liberals, who opposed it as a new kind of social oppression of individualism and imposition of conformity by a majoritarian and authoritarian state at the behest of ‘the masses’, nor of conservatives who thought of society as naturally composed of elites and unruly masses who had to be ruled by monopolisation of power. In addition to these are those persons and groups who oppose racial and cultural tolerance through a largely instinctive form of tribalism and racism. From Aristotle to Social Democracy Early modern political theorists, idealising the pax romana perhaps, grappled with this problem of the necessary role of the educated and civilised ruler or sovereign against the supposed baser instincts and passions of ordinary people (the rabble or the multitude, likened by Plato to a ‘Great Beast’) to fight among themselves and to reduce those who would ‘tame’ them to being one of them. Aristotle had theorised that man is by nature a gregarious and political animal, endowed with moral judgement and moral qualities, and these characteristics make possible the household and the city state. As Malcolm Bull has argued, for Aristotle,

what makes gregarious animals political is a shared way of life to which all contribute, and what makes humans even more political is having logos, for rational communication permits common activity of greater social and moral complexity. Within the terrain mapped by Aristotle’s definition of the political animal, there would therefore appear to be two axes: one that extends from solitude to gregariousness, and from the private to the public, and another that extends from the voice to logos, or nature to culture. [Bull, 2007, 16]

8 State-directed allocation as the central or dominant mechanism of economic interaction is incompatible with social equality and justice, just as is monopolistic and oligopolistic market allocation of all social wants and needs. Radical market freedom and symmetrical knowledge of all participants, without exploitation, are essential to a free and just society. While this full social democratic (or democratic socialist) ideal is of course unrealizable within a capitalist society, the evolutionary democratic socialist movement from the late 19th century envisaged (optimistically) the gradual achievement of this outcome but was doomed to disappointment, as the Leninist and Trotskyite arguments predicted. Of course their alternatives of Fascism and Stalinism were even more unrealistic.

10This complex interconnection of nature, reason, sociality, culture, and governance that Aristotle began to theorise, has remained the site of much debate and ideological disputation ever since. Philosophical anthropology or theories of the deep nature and/or capacity of humans has always been at the centre of the debate for this is indeed a most important question. Are humans essentially socially co-operative beings, willing to subordinate their individual desires and needs to the maintenance of social integration, group advancement and/or peacefulness, and ultimately civilised society (in the sense of civil co-operation)? And if so, how far does their co-operativeness extend to other people, further removed from their own socially-integrated group? Indeed, it can plausibly be argued that the ancient origins of organised interstate warfare was a result of large-scale co-operation (rather than coercion), of an intense kind, among the members of kingdoms that emerged consequent upon the development of early agricultural wealth and social differentiation into ruling elites and commoners (eg. Spencer 2003, Stanish and Levine 2011). Social co-operation does not have to extend to all of humanity and the question of how far it extends (from local to global) has been a constant theme in political theory since ancient times. Peacefulness can be internally constructed by social organisation at the same time as violence can be directed at external, ideologically and materially-defined, enemies. For Aristotle, the family was the basic unit and from it grew the integrated city state, the polis, of fellow politically-defined persons (which did not extend, of course, to slaves or women). Beyond that small community with its structure of reasoned governance and in which there was universal communication and economic self-sufficiency within the state, there were barbarians who were essentially ungoverned and naturally enslaved by Greeks. Thus Aristotle’s social animal (zoon politikon) is a rational and gregarious animal but not a universal animal in that the fundamental characteristics were not shared with all ‘humanity’, a concept of much more recent provenance and one still of great controversy. The history of Western political theory after the Greeks until the Enlightenment reveals a constant theme of religiosity – the eternal reference to The Gods (Pagan and Christian) and the teachings of the Bible. It is from Christianity that the dominant discourse about passions, interests, and social rationality arose. Then, with the rediscovery of Aristotle’s works in the Latin West in the 12th and 13th Centuries, via Arabic scholars, much use was made of them by Thomas Aquinas to develop an Aristotelian interpretation of Christianity that paved the way for advancement in Western political thought about human passions, interests, and rationality over subsequent centuries. For Aquinas, following Aristotle, to be human was to be political, that is, social. But the problem of the emergence and maintenance of order remained. This problem was essentially the same for Renaissance and Enlightenment thinkers as the problem of the constitution and maintenance of the state in a world of endemic interstate conflict. Machiavelli proposed in the early 16th Century a radical theory of the politically beneficial effects for states of social conflict in overcoming corruption, which he rightly defined as the dominance of sectional and private interest over the public interest. He argued that dissent and tumult arise from the disadvantaged factions (gangs, classes, social orders) in unequal, corrupt societies and could have, under certain circumstances, the effect of removing corruption and restoring the social good. Extreme corruption could lead to extreme violence that could destroy the state. But corruption was inevitable and arose out of idleness so he seemed to imply a historical cycle of peace/idleness/corruption/ disorder/violence/ruin or renewal (Bull 2016, 35).

11Thomas Hobbes viewed the problem of social order through the lens of the English revolution and civil wars of the mid-17th Century and concluded on the necessity of a powerful sovereign ruler (Leviathan) who would have a contract with the people in order to prevent civil disorder and war. Without this there could be no sociality, “and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short” (Hobbes, paragraph 9) (cf Foucault Society Must be Defended, Pasquino 1993 ) John Locke’s radical (perhaps revolutionary) intervention in the 1680s and 1690s was to develop the concepts of natural law and natural rights of people against the idea of God’s bestowal of human characteristics or the necessity of the imposition of sovereignty. In the early 18th Century Bernard Mandeville rejected the Hobbesian idea of the necessity of Leviathan or the imposition of sovereign power, and started to grasp the theory of human individual rationality as an involuntary mechanism for social order. "Private Vices by the dextrous Management of a skilful Politician may be turned into Publick Benefits", he wrote. Here was the first articulation of the idea of the role of rational individual market behaviour in constructing an integrated society out of human self-interest. Social order would arise naturally, it was held, if it could be freed to do so. This was the emergence of the concept of ‘homo economicus’ that was to play such a powerful role in providing ideological support for possessive individualism and capitalist social relations. Thereafter, with the emergence of the question of economic and social change and Enlightenment materialist thought consequent upon the beginnings of industrialisation, a new theory began to take hold centred on the concepts of ‘progressive economic stages’, ‘dynamic social structure’, and the ‘hidden hand’ of the market in which all people interacted as self-interested individuals. Adam Smith’s profound contribution has been enormously influential and has an influential modern form in the work of Hayek. Hegel was also influenced by Smithian ideas. [references needed] This fundamentally important Enlightenment shift away from religiosity as the foundational philosophy of human nature began to prompt by the 19th Century the idea of the universality of human characteristics beyond the simple (or simplistic) rational individualism of bourgeois ideology. This new thinking was developed by democratic socialist reformers, theorists of working class solidarity and the role of socialised work experience (or praxis) in forming political and social consciousness; and in its most developed form it did indeed include all humanity. Karl Marx wrote in the 1844 Notebooks about the ‘species being’ of ‘man’ (humanity) as having a universal nature as a natural and social being.

Man is a species-being [gattungswesen] not only because in practice and in theory he adopts the species (his own as well as those of other things) as his object, but – and this is only another way of expressing it – also because he treats himself as the actual, living species; because he treats himself as a universal and therefore a free being. (Marx 1844)

The liberation and expression of co-operative consciousness emerged in specific conditions of capitalist industrialisation and bourgeois society, which was a ‘melted’ state of social relations for the majority of ‘common people’ that made it possible, even necessary, to think this way for the first time and which in turn engendered widespread social support to varying degrees in particular locations. Marx and Engels expressed it in the most dramatic terms:

Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of

12ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind. (Marx, Engels, 1848)

The emergent socialist theory was not a republican theory of individual citizenship, rights, and social peace [cf Pettit, 2012] but a theory of social integration in which the idea of individualism is made ‘organic’ in the sense that social obligation and co-operation are necessary for democratic society, social flourishing, and social peace. The rights of free and equal citizens to choose forms of individual action, social interaction, and social contracting are limited by the need for social integration and equality of access to social goods. Capitalism cannot provide such a social arrangement for it is based on dominance and subjection of workers to capital and the consequent inequality in wealth and power. Theories of republican government that do not take account of this fundamental political economy of inequality cannot grasp the historical process of class division. Bourgeois republicanism is limited by its inability to take account of economic coercion and the role of the state in enforcing inequality or equality. The ‘right to choose’ is a chimera if the limitations on that right are unequal and asymmetric. Real democracy and social peace require the widespread feeling of trust, social justice and fairness, and that in turn requires the widespread reality of material and cultural equality, which implies the diminution and eventual elimination of class, race, gender, and all other underpinnings of inequality and power. Against the Challenge of Nietzsche and Towards a Foundation for Universal Humanism The question of equality rests upon the question of the nature of humans. The long tradition of political philosophy and philosophical anthropology, ever since Plato and Aristotle in fact, that took as its starting point (its grounding) a concept of the ‘natural’ state of humans as selfish and uncivilised with only a small minority being able to raise themselves, by whatever means (often through an unacknowledged perpetual inheritance of wealth, culture, and educational access), to be above this state and so constitute a ruling, civilised, aristocratic class or sovereign. But these presuppositions or a priori foundations of ‘natural’ inequality have no real empirical roots in a science of human nature. They are based only upon prejudices derived from their locations within class societies and cultural/philosophical traditions. A very few (radically honest) thinkers (including Machiavelli and Nietzsche) have held that there is not even the possibility of an invariant foundation for socio-political order. Personal and collective strength is the only force that supposedly matters. As Malcolm Bull powerfully argued in a profound challenge to political theory via a new critique of Nietzsche,

Both Machiavelli and Nietzsche take seriously the idea that if political theory is ungrounded in the sense of having no foundation, it will also be ungrounded in the sense that it has no floor. If there is nothing that we can take for granted, there are no constraints on where politics might take us, no safety net at all. Politics, as Nietzsche imagines it, is not like building something up out of the earth, it is more like a formation of skydivers in the air: ‘Are we not plunging continually? Backward, sideward, forward, in all directions … straying as through an infinite nothing?’ [Nietzsche, The Gay Science, S125] We cannot help ourselves falling, but Nietzsche thinks there is an inegalitarian formation we can adopt in which a few of us will stop falling and start flying. And the rest? ‘Him

13you do not teach to fly, teach – to fall faster’ [Nietzsche Thus Spake Zarathustra, 1969, 226.] In Anti-Nietzsche [Bull’s critical text] it is different. We are, all of us, falling slowly through the air. (Bull 2014, 140)

Fortunately, this disturbing, negative, anti-presuppositional, philosophy, the limit philosophy of ultra-modernity in fact, which is the greatest challenge to universal egalitarianism, can now be countered scientifically. We now seem to be able to say (see below) that there really is a foundation for socio-political theory and social-democratic practice given by a very different empirical (rather than philosophical) conception of the universality of human nature and natural sociality, a foundation glimpsed by Tom Paine in the 1790s and Marx in 1844 but distorted and overridden, partly through Nietzschean influence, until recently. The idea of natural co-operativeness was present in Marx’s notions of ‘praxis’ and in the anarchist line of thinking, as expressed by Pyotr Kropotkin in Mutual Aid (1902) The idea of the universal class that absorbs all other classes and so does away with classes and class differences was the centre of the universalist theory of society in which conflict would no longer be engendered by the hitherto ‘natural’ class division of society between rulers and ruled. But Nietzsche was opposed to what he saw as the totalising power of modern social integration as debasing of all humanity and advocated the consequent necessity of a future socio-biological distinction between debased humans and super-humans. On the other hand, Emile Durkheim envisioned industrial modernity positively as the emergence of organic solidarity, employing also a biological or ecological concept of society. The rise of modern sociological theory, from Durkheim and Weber onwards, influenced by the older ideas of Smith, Ferguson, and Marx on the nature of society and social relations as a new field of enquiry, was based on a new foundationalism for socio-political theory: an assumption of natural sociality and solidarity, rather than natural competitiveness. The problem of explaining this emergence of modern socially-integrated societies was the leitmotif of sociology. This conception grew out of the fundamental transformation of actual social relations brought about by industrialisation. The material structures and experience (praxis) of industrial society and industrial work required a completely new approach to understanding this new social-industrial world. The emergence of a majoritarian public interest and general, shared, consciousness and ideological understandings, with public education for all …… Social integration since Durkheim – Parsons, Lockwood, et al Issue of decline of religion and rise of secularism in the West Universality and the limits of socio-cultural differences

14Universal Humanism and the new Anthropology Thus the modern (since the mid-19th Century) idea of universal humanism is an outcome of several intersecting forces – secularist thought and its rejection of religious dogma and autocacy; industrialisation as a process of stripping away all social presuppositions of existence; socio-political movements that rejected the power of authoritarianism; experience and knowledge of other cultures; and so on – epitomised by Thomas Paine’s argument in the 1790s (Paine 1793) and later by Comte’s secular religion of humanity, the Post-Hegelian materialists in Germany, particularly Feuerbach and Marx, the ethical socialists of the late 19th Century and their anarchistic allies. Of course humanism and social integration fell apart and were eclipsed by racism and terror in the 1914-45 era but in the wake of the Second World War’s horrors the founding impetus of the United Nations was the principle of humanistic universalism, reflected in the Universal Declaration of Human Rights, which states that the “recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world.” The English writer H G Wells played a significant role influencing the idea of ‘the human family’, particularly in his text The Rights of Man (1940) (cf Smith 2016). Marx’s vision of the future, although very understated, in which there would be no need or possibility for class-based allocation for the material satisfaction of wants or needs, was one of abundance but this does not mean a limitless exploitation of the earth, leading to the tragedy of the commons, as some have supposed from an individualistic perspective, for there is also the power of universal, shared, co-operative consciousness and agency rather than private greed and from that framework of sociality can arise solutions to any such problems. In such a way, it is reasonable to assume that the idealised, open-ended, democratic society can solve the problem of the tragedy of the commons through co-operative restraint. The pessimistic views of Bull and others that universal society will ultimately result in radical levelling down or levelling out has no real empirical merit for it fails to account for universal consciousness, praxis, and co-operative agency. On the other hand, Hardt and Negri’s (2001, 2004) reassertion of the spontaneous, non-institutionalised agency of the multitude within ultra-modernity provides no comfort for it takes no account of the residual power of elites within capitalist society. And Streeck’s (2014a, 2014b) pessimistic Post-Polanyian reading of the completion of the capitalist commodification process in the 21st Century also fails to grasp the latent agency within the universally wired and educated society of the advanced West. The idea of humans as positive social agents is now central to social and educational thought and allows for an open-endedness in sociality that is not sufficiently captured by pessimistic structuralism. That is, unlike in the Nietzschean pessimism, levelling up and social reconstruction can result from human collective resistance and agency, the outgrowth of human impulses for altruistic reciprocity, co-operation, and equality. Following Darwin’s powerful insights in the 1870s about the necessary emergence of human conscious morality and altruism (Boehm 2012), the ‘discovery’ in recent years of the universal significance of these impulses as fundamental characteristics of the human species has been a major development within socio-political theory. This kind of empirical work into human socio-biological nature has been within two broad streams of research.

15-------------------------------------------- Details needed in this section Firstly, the new scientific socio-biological anthropological theory [Brown, Boyd, Richerson, Bowles, Gintis, Hinrich, et al, ……. + other references Samuel Bowles and Herbert Gintis (2013) have argued at length that the basic instinctual human motivation in social interaction are fairness, reciprocity, and co-operation, and much inter-cultural research using games has confirmed this. ……….. Secondly, the new ecosystem thinking about humanity’s socio-natural connectedness. This kind of argument has been developed and extended in different ways by Frijtof Capra (……) and others ……… Maturana and Verala (…….)………. Clifford Geertz’s concentration on local knowledge was an early precursor of the theory of human socio-natural connectedness. His fundamental orientation to understanding the social world was to build it up from a close affinity with the multi-layered nature of the embodiment of local knowledge or local understandings of social interaction and the shared consciousness and unconsciousness of ordinary (rather than scholarly or elite) actors (Lloyd, 1993, Ch 3). There is great significance for social explanation of the new extended evolutionary synthesis that elevates epigenetic and ecosystem thinking to the centre of neo-Darwinian theory. …….. In a similar way, the anthropologist Christoph Antweiler has made a persuasive case for the failure of cultural humanism to move beyond the problematic of understanding local differences to grasping the deeper, shared, cross-cultural dimensions of all humanity, dimensions that are intrinsic to being human and which not just make possible local variation but enable the understanding and appreciation of those local differences by outside actors. Inter-cultural understanding and acceptance is the biggest test of the universal humanism in the 21st Century. As Antweiler wrote,

What is at stake here is to develop a form of humanism which emphasises cross-cultural unity and whatever cultures have in common while not neglecting the differences that are indispensable for the formation of identity. To this end … concepts of cultural diversity that are constantly invoking some kind of universal quality will prove to be the most suitable ones. They are more fruitful than the usual focus on cultural difference and interculturality, with its tendency to posit cultural difference as an absolute given, and at the same time they are more realistic than the total denial of any limits currently en vogue in cultural studies. Figuratively speaking, this amounts to the question of how to visualise the world in its entirety, thereby regarding it less as a globe, which would be to emphasise difference, but more as a planet, which would open up the perspective of commonality. (Antweiler, 2013, 37-38, emphasis added)

16The universality of these new understandings is central to explaining the emergence of peacefulness when social relatedness is freed from social oppression and demagogic manipulation. Social resentment rather than co-operation becomes more powerful under specific circumstances of social failure and demagogy. As Plato argued, those who ‘descend’ to the level of the multitude in order to manipulate crowds end up being no different from those who try to tame a great beast but become a beast themselves. The foregoing, then, provide the reasons for optimism against the Nietzschean pessimism and anti-foundationalism for together these lines of argument can help provide a new foundation for the concept and possibility of social integration. The new developmental socio-biology and evolutionary historical anthropology are providing (through scientific discovery and reasoning), a new empirical foundation for social knowledge. That is, co-operativeness, reciprocity, and empathy, and their limitations, are the most important and influential of human natural characteristics, irrespective of cultural and economic location. Universal humanism on this kind of scientific foundation assists the construction of a social science history approach to both the possibilities of and barriers to peacefulness. Furthermore, the material foundations of social advancement are also necessary for overcoming hostile fragmentation through, among other processes, the promotion of tolerance of differences of sectarian and class kinds and the redistribution of income through social democratic welfare processes in order to raise up those who are disadvantaged and marginalised so that they can take their places as full and equal citizens. This kind of content of ‘universal humanness’ still requires explication beyond the ‘discovery’ of the universality of reciprocity and co-operation, a task best undertaken from within the discourse of historical socio-anthropology, pursued by, among other thinkers, Clifford Geertz. The planetary perspective of Antweiler is a necessary addition to this perspective for it does not accept the globalised structure of ‘necessary’ inequality and the ‘necessary’ processes of a structure that is based on the power and dominance of global institutions (most notably global corporations and the global imperial/legal integument of those corporations). Accepting the commonness of humanity and the universal foundations of all culture and sociality is necessary in order to move beyond all distinctions of race, culture, gender, and class; to see these as epiphenomenal expressions of fundamental humanness. Such thinking would seem to be necessary to constructing a sustainably integrated society. This is still far from being achieved, unfortunately. Foundations of the Social Democratic State All of the foregoing discussion, then, feeds into the problem of how to achieve the condition of social equality, justice, and peace, which became the dominant problem for social reformers in the late 19th Century. A split developed between evolutionary and revolutionary theories of class conflict and the mass movement of workers towards ending exploitation and the achievement of social co-operation and equality. Overcoming the hegemony of capitalist inequality and exploitation with or without a violent revolutionary upheaval of the kinds that spread across Europe in the 1917-23 (Gewarth 2016) period became the central issue for socialist theorists. Universal humanism is implicit within the development of social democratic thought in the late 19th century. Early, half-formed, social democratic regimes first appeared in the beginning of the 20th Century with certain “state experiments” (Reeves 1902), such as Australia, New Zealand, and Denmark. Really existing social democratic societies emerged by the 1940s, epitomised in the post-war decades by the Nordic countries and the UK and later with other

17Continental exemplars. The Nordic models were certainly democratic and peaceful but also statist in the sense of having strong, interventionist, states; impatient with markets that had to be circumscribed. Corporatist agreements between organised labour, capital, and the state were limiting of the autonomy of private market behaviour and of capital accumulation. The Swedish Folkhemmet was the most developed form of the so-called ‘Nordic Model’ that aspired to abolish class differences or at least establish a tightly constructed class compromise that achieved social peace through welfarist distribution and, ultimately, it was planned by Rehn and Meidner, the peaceful socialist transformation that would displace the inequality and class exploitation of capitalism through collective ownership of all the means of production. An earlier, more statist and less corporatist, version was implemented in the Britain by the Attlee government of 1945-52 that nationalised much of the “commanding heights” of the economy. Joseph Schumpeter (1943-49), saw a strong possibility of democratic state socialism in the West (in ‘mature’ countries) and believed the immediate postwar British government was moving resolutely in that direction, closely imitated by the rest of north west Europe. He thought it was possible to have democratic socialism under certain conditions although he believed it inferior to bourgeois democracy. Indeed, the postwar British Labour government, strongly influenced by Fabian socialism and Keynesianism, was leading the way in the ‘socialization’ (state ownership) of much of the economy and social services, albeit without threatening the fundamentals of capitalism, and the rest of the West was closely following this development. For a period of time at least it seemed that Schumpeter’s judgement was justified. It is now ironic, however, that Britain in the 2010s is one of the leaders of privatization and marketisation of erstwhile non-profit, public-sector services such as healthcare, pensions, education, and social security generally. This is a new, possibly epochal, development that has been presaged for decades but has not really occurred in a significant way until about 2015. The “state experiments” are ending in much of the West despite trenchant criticism that this neoliberal ‘medicine’ for economic stagnation is threatening to kill the patient. This new post-war social formation was not envisaged by the social democratic thinkers as a levelling down or a debasement of the elite to the level of the masses but a levelling up of the masses, of the society, as an integrated ‘family’. Universal education, a raised standard of material and social life, freedom from fear and want, social security of a form never before envisaged or possible, were the means to a new kind of society that would be free from fear. The building of social capital from older roots in small-scale agricultural village society, religion, ethnicity, class co-operation, and the reciprocity inherent in human nature, required organised political agents to carry out this construction, usually in the face of vehement opposition from entrenched, elitist, interests. Thus social democratic society had an implicit philosophical anthropology within the theory and ideology of working class solidaristic co-operativeness and cross-class compromise, which arose, if not entirely innately, from the praxis of agricultural, proto-industrial, and then large-scale industrial, work. The development of the new scientific anthropology, eclipsing and displacing philosophical anthropology in more recent times, has opened new perspectives on the nature of humans as a socially-oriented species that helps to articulate a theory of social democratic society and a social democratic state

18IV

Uneven and Evolving Processes of Transformation and Class Compromise: From Humanistic Thinking to the

Material Conditions of Integration. The emergence of universal humanism is a necessary but insufficient component of an explanation of social peace. Indeed, practical humanism (rather then the philosophical or socio-biological variants out of which it has grown) should be understood mainly as a consequence of the desire and political movement for peace, even if the dialectic of humanity and peace cannot be unravelled from the material conditions of peacefulness. But hesitation is necessary here for there is no necessary connection between economic prosperity and peaceful social co-operation. High levels of average wealth, prosperity and peace are certainly compatible with social oppression, as can be seen in certain Gulf states, and while there might be the appearance of stability and peacefulness it can be achieved sometimes only through social segmentation, inequality, exploitation, and repression. This is not the state of peaceful co-operation that overcomes fragmentation for, indeed, it rests upon a hidden and pervasive fragmentation. Returning now to the economic conditions of really existing, socially integrated, peacefulness, we see that the main drivers of the enormous transformations in economies and societies that produced the new social-industrial world since the early 19th Century have been, firstly, capitalism: which is that system of labour transformation and capital accumulation from exploitation and plunder that then drove industrialisation as a wholesale transformation of the relations of humans to nature and to each other. Secondly, the eventual raising of standards of living and expectation in the core regions (including, especially of universal education – a requirement for the skilling of industrialised labour), particularly in the Western Europe/North America/Australasia zone, prompted, thirdly, organised class pressure from below within these advancing regions. This working class pressure can be understood as the first emergence into political effect of the consciousness, liberation, and cohesion of universal (if still not fully realised) humanness (as discussed above). Here was the deepest contradiction of capitalism – through its massive transformation and raising of the intellectual, social, and material conditions of labour while at the same time exploiting labour for capital’s own reproduction and accumulation – that produced its own internal opposition, an opposition that, as it turned out, eventually remained more or less loyal to the system in most places despite the hopes of the radical opponents of capital (Streeck, 2014a, 2014b). (More on this below) Having come into being, the social class effects and outcomes then evolved along with the evolution of the transformation process itself. As stated earlier, the compromises between capital and labour at various times from the late 19th Century onwards and especially from the late 1930s in some places and more generally from the late 1940s, were crucial. Industrialisation, democratisation, and class compromises: despite many complexities and varieties in the paths followed and much conflict along the way these produced outcomes by the late 1940s and the 1950s that are generally described as peaceful welfare states, comparatively devoid of significant class, sectarian, and ethnic conflict. This has been a contingent, non-linear, and historically-determined process of construction by social agents that has evolved very significantly as it has occurred in its many sites and in multi-layered geopolitical, economic, socio-political, and ideological, ways ever since, including with the sources of mass immigration, which has posed in the 21st Century a major threat to the social peacefulness of the earlier period.

19 At certain moments, then, the Western transformations changed in such a way as eventually to make the intersection of elite and popular agency in the advanced states more integrated within the process. Historic compromises in the interests of the sharing and promotion of greater prosperity have been characteristic of these states. General prosperity was essential as a pre-condition. The leaders and ideologies of social democratic/labourist parties have been crucial to this process of channelling class anger and seeking compromises with capital [Brenner in Jacobin 2016, more…..]. That is, popular shared consciousness was constructed into more or less consensual forms that attempted to transcend the old sources of conflict in more humanistic, egalitarian, and redistributive ways9. This was a social development made possible only by the process of economic prosperity that generated sufficient social surplus and a sufficiently increased standard of living for workers through their organisational pressure and universal education while at the same time not threatening the returns to capital. Mass working class organisations and comparative solidarity were essential drivers, even in the US in the 1934-36 period of New Deal compromises. Of course these working class pressures failed in the short term in many places in the 1920s and 30s, which were highly conflicted decades in many Western countries, due in large part to the failures of economic prosperity. The defeat of Fascism and militarism was essential for the further advancement of socially solidarisitic and peaceful outcomes. Just as important was economic prosperity from socio-economic development. Prosperity has always been and is still essential to the compromise. Having relied so strongly on the emergence of strong democratic states, the spread of prosperity, however, has become far less possible with the evolution of the global system since the 1980s. The original primordial capitalist character of the transformation and the continuing role of the old elites in the process was such as to ensure the maintenance of some degree of class power and inequality, which have become exacerbated in recent decades with rising inequality within advanced states and between the advanced and the poorest peripheral regions of the world. The close interconnection between advanced country and peripheral capitalist elites has acted to make much more difficult the institutionalisation of developmental states in the periphery. From Positive to Negative Modernization: The Non-linearity of Capitalist Development Indeed, the development and modernization within the world system of the past century or so also has its dark and degrading side in the periphery. As all the world became ‘modernized’ (in a general sense) since the 19th Century, the globally-systemic integration through the capitalist transformation affected all parts and people of the world in multiple ways so that a great unevenness of the development became a chief characteristic of the process. The economic development of the core, the rise of the new global imperialism, and the eventual emergence of advanced peaceful states (out of earlier violent imperialistic states) came at the great cost, perhaps even as a systemic necessity, of inequality within the system as a whole. Backwardness and peripheralisation was certainly a central

9 Of central significance to these settlements was the fact of ethnic homogeneity in most of the advanced states (except the US, where the settlement did not fully develop and did not outlive the 1940s), not yet subject to mass immigration from outside the core regions. Once large-scale immigration from non-core areas occurred, the settlements began to be threatened and in the 2010s this ethnic ‘issue’ is a major cause of crisis in the advanced states.

20characteristic of the system. Parts of the world were zones of extreme plunder and exploitation, including large-scale trade in slaves [Collier, et al…]. Thus the question of whether or not and how the backward (undeveloped) regions and zones of the world would be able to participate in development and modernization by catching up became a fundamental problem for state-focused economic and intellectual actors from the early stages of the process once it began in the United Kingdom. Britain’s leadership in industrialisation was the only case of ‘first mover’. All other states, classes, and regions have been required to catch up if they wish to share in the benefits (as well as power) of economic development and its flow-on effects in geopolitical and social structures. All the advanced states have indeed caught up (which makes them ‘advanced’) and there has been a high degree of convergence in their incomes per capita if not always in their political development.10 The Problem of Development: the Historical Centrality of Rent and the Recent Strengthening of Monopoly Capital through the New Generalised Extractivism An essential component of an understanding of the uneven global structure of capitalism as it has evolved since the 19th Century is the changing ways in which the capitalism of the core states and global corporations has extracted rents from the periphery. [section to be expanded] [Marshallian rent?] [Stiglitz on monopoly, Ramos in SMH 17 June 2016] [Lees on neo-Ricardian rent] [Lloyd 2016]

10 Commodity-rich exporting countries with high average incomes but low socio-political and human development cannot be considered as advanced modern states. The issue of whether partially-democratic or undemocratic but economically-developed states in Asia with weak welfare regimes can be considered modernized is a relevant point that we don’t need to debate at this stage.

21Can Catch-up, Modernization, and Integration Occur Under 21st Century Conditions? Given the foregoing discussion, there is good reason to doubt that most of the rest of the world’s countries and regions can catch up in the present context and by which processes they could possibly converge with the advanced countries, not only in economic development but also in modernization, with all it implies for relative social consensus and peace.11 In the foreseeable future of the structural processes that presently exist, given the great shift in local and global geopolitical institutionalisation that has occurred as a consequence of the ways in which the advanced states developed, catch-up is increasingly difficult. That is, the world system of the first great transformation that produced the advanced states by the early post-war decades has been replaced by a different global system that is much more structurally hostile to further socio-economic transformation in peripheral zones but more conducive to the advancement (ie wealth accumulation) of the new corporate main actors within the core regions and their dependent (usually rentier) elites of the backward zones. While the original processes of advancement produced at first a world system of imperial and trade power that did eventually transform by the 1950s into an international system in which interventionist states became the main actors, those states, however, were very differentiated in their agency within the system. The hope, then, that all peripheral states would develop and become advanced through globalisation has been thwarted, however. This is notwithstanding the Chinese partial success so far, which is perhaps an exception that is proving the rule of growing unevenness within the world system and within each state12. Many peripheral states were and are weak institutionally and dominated by external forces, as well as by internal comprador, rentier, and exploitative elites that have made it very difficult for them to develop the social agency to institute development strategies, assuming they wish to do so.13 Thus the most pressing issue in describing and analysing the global system of political economy and geopolitics today concerns the old question of a catch-up process in the poorest, ‘backward’, regions and countries of the world. Despite the great transformation of North East Asia in recent times (the second great transformation), much of the world remains impoverished and conflicted. About 1 billion people live below the barest measure of poverty of $2 per day and about 3 billion are now wage workers, dependent on selling their labour time rather than producing their own livelihoods through self employment. [Collier, other refs…] The efflorescence of capitalist accumulation after 1989-92 is

11 Samuel Huntington (1968) famously argued, which was a representative view of certain Western conservatives, that many developing (mostly postcolonial) states risked chaos by educating their citizens in advance of economic development, which would produce great political instability. Of course, this fails to take account of class pressure from below for education and social advancement within those states and of the globalization of information and hence the demonstration effect of the advanced societies on the whole world as the 20th Century progressed. 12The Chinese case shows clearly the effects of the Communist revolution in sweeping away the old order of landlordism and feudalism and instituting a powerful, centralised, developmental state with a concerted catch-up agenda (see below). Which other countries are able to do that in the 21st Century? 13The exploitative elites of many backward states are not truly interested in development for to do so would require policies of equality and social investment that would encourage lower class consciousness and erosion of their own power. This seems clearly the case throughout the MENA states, most of South Asia, and Sub-Saharan Africa [cf Owen Bennett-Jones LRB 2016]

22proletarianising the rest of the people of the world but not improving their quality of life14. Most of these new wage workers are located in the poorest regions. The much-vaunted rhetoric of ‘lifting billions from poverty’ through development is a hollow promise. During this process inequality has grown rapidly almost everywhere. [refs: Galbraith, Piketty, et al] In addition to these structural problems of political economy, are two equally or even more significant interconnected problems of the global system: climate change and demographic change. As Mark Blyth (2016, p 11) recently summarised the situation:

The world cannot burn 60 to 80 percent of remaining known carbon fuel stocks without causing catastrophic warming. But under capitalism, this is exactly what the world will do. Carbon taxes will do little to change this reality. Add to this … an aging developed world with huge pension liabilities and a climate-shocked developing world of young people who have nowhere to go, and it’s little wonder that the Organisation for Economic Co-operation and Development has forecast stagnant growth for the global economy for the next 50 years and an almost 40 percent rise in inequality in the world’s rich countries.

Given these conditions of the global system, the problem of how the rest of the world can escape from poverty, social fragmentation, and endemic conflict, and achieve development, modernization, and social peace, requires not only a combination of new and old historical knowledge, theorising, and critical thinking but, moreover, new forms of collective social action by the ‘losers’ in all parts of the global system. The agency of subordinate classes and non-state actors in their resistance to local and global domination within peripheral states is central to this question, as are existing and new global institutions of justice, human development, and climate mitigation that can perhaps provide a space for state-based advancement. Some degree of conflict on the road to socio-economic advancement may be unavoidable, as the historical experience of all the advanced states has revealed, but avoiding or ameliorating that conflict and establishing the rule of law and strong state institutions that are focussed on development, more or less free from rentier compromise with advanced capital, is essential to the future. The current situation throughout much of the less developed world is not promising and, indeed, is worsening. 15

14The question of the character of the political economy of the former communist countries is a topic that is still hotly debated. One conceptualization is that these countries were actually state capitalist and when the regimes collapsed the erstwhile Party elites were able to transform themselves easily into private rather than state capitalists. This is most clearly seen in Russia and China, which are now the leading examples of this more developed form of state capitalism.15Violence and state collapse has greatly increased in large parts of the Middle East and Africa in the past decade, as Patrick Cockburn (2016, p19) has summarised recently:

The failure to create a truly independent secular Kurdish state is part of a pattern that has emerged in the Middle East and North Africa over the last 25 years. The history of the KRG is simply a recent and dramatic example. Secular nationalism is an ebbing force. … From north-east Nigeria all the way to north-west Pakistan, states are weakening or collapsing. This great diamond-shaped zone – largely Islamic, mostly Arab and containing some of the world’s biggest oil producers – has become a vast battlefield in which seven wars and at least three serious insurgencies are currently raging. Afghanistan, Iraq, Syria, south-east Turkey, Yemen, Sinai, Libya, Somalia, South Sudan, north-east Nigeria and its neighbouring states, including Cameroon, where Boko Haram sends its suicide bombers and death squads, are all affected…. Commentators often refer to ‘failed states’, a misleading phrase which conveniently implies that the failure is self-inflicted, and avoids putting any of

23V

States, Development, and Catch-Up In the Long Run Quite obviously, then, the further spread of social peacefulness requires, among other forces, the spread of socio-economic transformation, which means the escape from backwardness. States were always central to this process, as Karl Polanyi (1944) argued long ago: the development of modern market economies was inextricably linked to the modern state, since the state was needed to enforce changes in social structure and human thinking that allowed for a competitive capitalist economy. ‘There was nothing natural about laissez-faire; free market could never have come into being merely by allowing things to take their course’, he wrote. ‘Laissez-faire was planned. It was enforced by the state’ (Polanyi….). This process began at the dawn of capitalism with the capture and building of state power, increasing particularly from the 17th Century in The Low Countries and Britain, by emergent capitalist class interests. Modern states began to develop by then in northern Europe, focused on promoting the interests of law-governed contracts and national capital and opening the way to the new institutions of capitalist finance. The convergence of merchant, finance, agrarian, and military-bureaucratic interests was epitomised by the British state after the outcome of wars and revolutions of the 17th Century (Moore,…Hoffman 2016 ???). From the early 18th Century the British/French rivalry created a global system of empires of capital, commodities, and slavery, and in 1756-63 the British vanquished much of the French power in Europe, North America, and India in the first world-wide war. Industrialisation from the late 18th Century, at first a revolution in labour organisation and exploitation more than technology or energy, which then facilitated new technologies in a virtuous cycle of productivity, led to an integrated and zonal world economy by mid-19th Century (Wallerstein…). But this interstate system evolved by the 1980s and 1990s, through technology and geopolitical power, into a global system in which the dominant actors changed from being interventionist states to global firms and to today’s hegemonic hybrid interconnected structure of powerful interstate and corporate elites, centred on corporations and their inter-governmental institutional supporters, based in Washington, New York, London, Brussels, Paris, Berlin, Tokyo, Shanghai, and Beijing. These have interests opposed to not just the social justice, welfare, and democracy of the citizens of their own countries but also the peoples of the less developed parts of the world. This new globalisation of the system has removed much of the agency from local class actors and states so that now the issue of the interconnection of states, elites, markets, and social classes has shifted to a new framework in a manner never encountered by the advanced states in their catch-ups and developmental trajectories. Having created the system, the rulers of the advanced states and the interstate system and their elite ‘allies’ in the periphery have evolved their roles to retain their power, especially after 1989-92, but to thwart local agency. Indeed, the long-run continuities (especially since the late 18th Century) of elite economic and political power holders in both the core and the periphery of the system is remarkable.16 All this has made catch-up more difficult.

the blame on external agencies…. A better name for what’s happening in such places might be ‘Somalification’, since Somalia was one of the first victims of this process.

16On the maintenance of class power see…..

24The Uneven Trajectory of Catch-Up During the first great transformation, in the century up to the 1960s, the backward areas of the Western core region were able to catch up to the leaders largely through the agency of state power. In the second great transformation, in NE Asia from the 1950s, the backward areas have either achieved or are at least seemingly (in the case of China particularly) moving towards catch up with the Japanese leader, also through concentrated state power. (Japan itself had undergone a special form of catch-up in the immediate post-war decades thanks to the strength of the interventionist Japanese state.) The dynamics of these two catch-up processes were different both internally and from each other but some basic similarities existed and there is of course a historical structural connection between them. That is, the production of an integrated and differentiated world economic system by the first great transformation eventually enmeshed all the world in locally positive and negative particular ways, a process that was impelled by the revolutionary era of 1989-92 that touched off the new efflorescence of global capital accumulation in the erstwhile communist states. Henceforth backwardness, proletarianisation, impoverishment, and the possibilities of catch-up transformations, were all causally interrelated within the complex world system of capitalism with its local and global class and institutional structure. But very few states have managed to achieve the rapid development needed to effect catch-up in recent decades. Catching up to the advanced world remains the essential task of economic and social development. Sometimes this is called ‘convergence’, which doesn’t really capture the sense of an urgent race. To fail to catch-up is not just to lose the race but in a globalised world it is to be ‘condemned’ to backwardness with much that flows from that in economics, politics, and society. Without more or less catching-up a country is likely to suffer a multileveled endemic crisis, especially in the 21st century with the globalisation of information and the demonstration effects from knowledge of the core attractions. The realisation of local and national ‘failure’ is one of the fundamental causes of social conflict and mass migration. The conflicts within the MENA states, South Asia, Latin America, and in many parts of Africa in the 2010s, touched off by but not fundamentally caused by the Great Recession of 2008 onwards, are one large manifestation of the continuing and worsening social fragmentation from failure. The compromised rentier elites of these states have little incentive to promote development, equality, and modernization within their countries. Catching-up was easier in the early stages of the first great transformation. The earliest industrialisation processes were gradual when compared with later processes but the social and political demonstration effect of economic transformation began to seem profound by the mid-19th Century to those regions that had not yet begun to experience the process. The spread of large-scale factories, railways, and heavy engineering by then was having an enormous impact on social and political consciousness as well as economic transformation. State regimes were naturally being determined by the desire to catch-up for geo-political as well socio-political reasons. (Gerschenkron 1952, Rosenberg 1996) Catching up required rapid social and economic reorganisation and re-alignment with the major sources of global capital, which naturally produced increasing levels of social discontent as capital penetrated and transformed traditional agrarian society. The sources of capital accumulation are thus crucial in this process. Every country undergoing rapid industrialisation requires a vast increase in investment and structural change, including rapid mass urbanization, and the later the catch-up process begins the greater the investment that’s required to build the industries, cities, and infrastructure of an industrial society that has to leap to the latest forms of technology, industrial organisation, and mass transportation systems. China has

25shown this in a vast and breathtakingly impressive way during the last 30 years but so far has only reached an intermediate stage with average incomes only about one third of the advanced world. And Chinese modernization in certain vital socio-political and welfare aspects has not yet begun. Backwardness and Development Policy: Can there be Development Without the State? The recognition of socio-economic backwardness as a basic description and characteristic of certain regions and countries could occur only once development and transformation had become a topic for observation and analysis. There could be no discourse of development until development had become manifest. The ‘problem of backwardness’ could only be relative in comparison with other regions and countries. And ‘backwardness’ has always been, in certain senses, a situation of both negative and positive ideologies of socio-economic change. Indeed, a specific stream of conservative thought has always praised and defended ‘backwardness’, a state sometimes understood as ‘traditional’ society. Another stream has seen it as advantageous, in a sense (“the late-comer effect”), because, if certain institutional barriers can be overcome, being backward enables the avoidance of the problems and rigid path dependencies of early movers. The majority view of ‘backwardness’, however, has viewed is as undesirable and detrimental to individual, regional, and national prosperity and social stability. Backwardness contrasts with advancement. The concept is certainly redolent with pejorative, judgemental, implications of the causes of failure of economic development and modernization. Overcoming backwardness has been a central theme in political economy and public policy since the mid-19th Century. Debates about backwardness really began with Adam Smith. The Wealth of Nations and its underlying theory of the stages of history is fundamentally about the problem of advancement and backwardness and how nations and sub-national regions can achieve advancement. At bottom, the solution was to allow the ‘natural structural order’ of the stages of development from agriculture to industry to commerce unfold more or less naturally without significant state intervention except for defending the rule of law and social order. The fate of Venice, which had inverted the natural order of stages by becoming a trading and entrepot state without a significantly productive agricultural and industrial hinterland, was instructive. While prospering for a time through trade and transport services, Venice faded and lost its political independence and its source of wealth to competitors and to militarily more powerful states. Ultimately, industrial transformation passed the lead to the erstwhile backward periphery of the North Atlantic region. The problem was then apparent for all backward countries and regions – how to achieve catch-up through industrialisation. The most important contributions to the backwardness debate in the 19th Century, after the early British Classical School, were made by German and Russian thinkers. This is not surprising when it is considered how economically less developed were Germany and Russia in the early to mid 19th Century, compared with Britain, France, and souther Belgium, and how uneven was development within the these territories in the 19th Century, something that became a central topic for debate and disputation from the 1820s and 30s onwards Most of the important German economists, political economists, economic historians, sociologists, and political theorists – including List, the German Historical School, Marxists from Marx and Engels to Kautsky, Max Weber and the Verein für Socialpolitik – became concerned with this issue in the century before the Great War and

26continuing in the Weimar period, but from quite varying perspectives. In the Russian case the significant theorist and historian of backwardness was Leon Trostsky in his post-facto analysis of the significance of the Russian Revolution (Trotsky???). The backwardness debate became integrated with concerns over political modernization, the role of the state, and the geopolitical rivalry between Germany, Britain, and France for mastery in both Europe and the world economic-geopolitical system. The culminating work in the whole debate came from the Russian-Austrian-American scholar Alexander Gerschenkron whose influential article on “Economic Backwardness in Historical perspective” (1952) supported the quasi-non-stages argument about development and modernization, which subsequently became the dominant (even common sense) view of economic development theorists and historians17. While sharing important fundamental methodological and theoretical assumptions with ‘liberal’ or neoclassical free market economic theory, he diverged from this view including especially on the role of the state. The locus classicus of the structural stages and non-state theory was Rostow’s Stages of Economic Growth (1960) but in Germany a different, ordo-liberal, tradition of state activism had emerged in the 1920s.18 Gerschenkron argued that

in a number of important instances industrialization processes, when launched at length in a backward country, showed considerable differences, as compared with more advanced countries, not only with regard to the speed of development (the rate of industrial growth) but also with regard to the productive and organizational structures of industry which emerged from those processes. Furthermore, these differences in the speed and character of industrial development were to a considerable extent the result of application of institutional instruments for which there was little or no counterpart in an established industrial country. In addition, the intellectual climate within which industrialization proceeded, its “spirit” or “ideology”, differed considerably among advanced and backward countries. Finally, the extent to which these attributes of backwardness occurred in individual instances appears to have varied directly with the degree of backwardness and the natural industrial potentialities of the countries concerned. (Gerschenkron 1952, 7)

Since Gerschenkron’s original argument of 1952 and his elaborations and applications over the following decade (Gerschenkron 1962) there has been a great deal of debate about the structures of economic development, linerarity versus non-linearity, globalization, and role of the state in development generally. Indeed, the issue of the role of the state has come back to centre stage due to the new (from the 1990s) globalization discourse and the success of the North East Asian and now Chinese transformation. Moving beyond the Gerschenkronian and Rostowian contributions, it’s quite clear now that the process of development (or catch-up) is one that arises fundamentally within political economy and

17Gerschenkron was influenced by Trotsky but his main influence came from German Historical Economics, including Liszt (Cf Selwyn 2014, Ch 4)18Stages theory has a long history, beginning with Adam Smith and famously including Karl Marx, against whom Rostow thought he was arguing. Gerschenkron (and Rostow) mistakenly attributed a linear stages view of development to Marx from a misunderstanding of a sentence in the preface of the first edition of Das Kapital. Marx’s most developed and considered view (expressed in The Grundrisse) was that there was a great variation in developmental trajectories. His most general conception was that there are abstract ‘historic states’ that encompass the long-run global history of the relationship of individuals to social structure and property in the means of production. These states delineate the possibilities of the great dialectic of human social organisation from communalism in various forms to capitalism to the future socialism.

27societal structure rather than within orthodox economic analysis and policy. That is, the interconnection of the socio-economic structure and the political regime of countries are the chief determinants of the possibilities of rapid industrial transformation. Economic and socio-political development and modernization can be hindered, delayed, thwarted, by governmental failure and that in turn can be understood as the result of certain more general forces of institutional and social structural inheritance 19. In addition is the related problem of resource curse that arises within certain contexts.20 The comparative historical political economies of various regions of the world since the 1950s is very instructive in this overall regard. The great success of North East Asia and some parts of South East Asia compared with Latin America, South Asia, Africa, and MENA, has to be understood through a prism that conceptualises and analyses the regimes of socio-economic structure and political economy that have been crucial in all these regions and the consequent possibilities of the emergence of developmental states. And, in turn, these regimes have to be seen as emerging from deeper and longer historical backgrounds of structural continuity and contingent disruption (cf Easterly, et al)

VI The Rise of Developmental States and Social Integration:

From Conflict to Peacefulness Thus the rise of developmental states in a context of backwardness has to be seen within the history of the varying processes of the emergence of modern nation states, which are a relatively new institutional form. It is a remarkable fact that multi-ethnic, multi-racial empires have been the dominant institutional form of the world for thousands of years in most places. The imperial process of class-ethnic conquest, domination, and exploitation encompassed almost the whole world by the second century AD and only a few remote, relatively unpopulated, and inhospitable regions were immune to imperial absorption. Over time, some of these empires grew to encompass whole continents and sub-continents and eventually others came to circle the globe and violently compete for global domination. The ethnic-class base of these regimes of subjugation, domination, and exploitation was always the fundamental driver and revolts against this domination have occurred locally for millennia. Despite the widespread success of revolts, empires have not entirely disappeared in the 21st Century but today the imperial form has largely evolved into either an informal but still powerful quasi-imperial form (USA and China) or become coterminous in some cases with modern multi-ethnic states (India); or, indeed, have remained as de facto empires (Russia). But the force of nationalism and nation-state formation has replaced imperialism as the dominant institutional process of the global geopolitical system. At the same time the rise of global corporations have overlain and to some extent conflicted with the state formation process. The emergence and strength of nation states as the dominant form in post-imperial contexts of the 19th and 20th centuries was very uneven, even if, perhaps, being the entelechy of the West, in Perry Anderson’s perceptive argument (Anderson 2015). The strongest states at first were most of the Western European imperial powers themselves (Britain, France, Germany, Italy, The Netherlands, Sweden), which, in the process of shedding (or having

19Brief critical discussion to be added here of Acemoglu and Robinson’s limited institutionalist approach, a la North.20 Recently examined at length in Badio-Miro, M, Pinilla, V, and Willebald, H (eds) 2015, Natural Resources and Economic Growth, Routledge, Abingdon and New York.

28them confiscated) their imperial possessions, were able to concentrate on building socially-interventionist state structures under conditions of and driven by democratic pressure. The global conflicts between them in the 1914-45 era greatly impelled the process of imperial reduction and of building public sectors, first as military states and then as social states responding at first to the devastating effects of those wars and then the powerful demands of their democratised populations. The state formation process spread to the former colonial regions in the post-war period and in North East Asia and then South East Asia the process produced some of the strongest post-colonial states. This was largely because these regions had very long histories of their own of state formation and rich civilisations that could be the foundations for new institutional organisation. Thus developmental states were not just a product of uneven capitalist industrial transformation since the late 18th Century, with its social fragmenting and transforming consequences, but just as much a geopolitical imperative in a world of competing empires. Catch-up proved to be possible for a time and under very particular circumstances, circumstances that have changed in the 21st Century. As argued earlier in this chapter, the connections between industrialisation, modernization, and social peacefulness are highly problematic and cannot simply be taken at face value just because there seems to be a contiguous correlation. The causal interconnections have to be uncovered. And in which direction does the causal connections primarily run? The development of trust and social capital seems to be essential but are certain societies and cultures inherently more integrated and stable and so more likely to contain higher degrees of trust? How essential is cultural background? And how essential is industrial development? There have been fundamentally peaceful societies (such as Renaissance Venice and Tokugawa Japan) without economic development. Clearly, the contention that some societies and cultures are inherently peaceful due to something in their ethno-racial substrate is unwarranted. All societies have been conflictual to a greater or less extent at various times during the long-run of their histories. And the deep characteristics of humanness are universal. And, furthermore, the boundaries and constitutions of today’s national societies have not always been as they are (extensively delineated by Norman Davies on lost Kingdoms) All societies of today (more or less well defined by their linguistic/political boundaries) have been at various times in their histories conquered/colonised by empires and/or themselves been conquerors and colonialists. The commonness of humanity and the long-run shifting histories of social and political boundaries denies any attempt to single out societies as being somehow ‘special’ cases of violence or peacefulness. Since it is also clearly the case that social peacefulness has spread with economic development the questions are of how much economic advancement is required, how much prosperity has to be achieved through development, how evenly it has to be spread within a state, what is the role of the state in promoting peacefulness through social policies, and how responsive (via the political and justice systems) the state must be to citizen’s demands for equality and justice. Conspicuous failures by Fascist, Communist, and Militaristic states in promoting development and peacefulness without responsiveness and with authoritarian repression have pointed up the negative effects of undemocratic state power. On the other hand, why such states arose in certain societies and not others during the economic development process of catch-up is an important question. Obviously, peaceful or violent states and societies are not simply correlated with the development process. Certain advanced Anglo and Nordic states (northeast USA, UK, Australia, Canada, New Zealand,

29Sweden, Norway, Denmark, Finland, and also The Netherlands) experienced more or less peaceful transitions to modernization from the mid-to-late-19th Century (after episodes of severe violence in many of them prior to that time), even though they still had a good distance to travel on their developmental trajectories, while other states (such as Germany, Italy, France, Japan) that achieved advanced peaceful outcomes in the second half of the 20th Century, experienced severe conflict in the 19th and early 20th Centuries. Others that became peaceful more recently, from the late 20th Century (such as Singapore, South Korea, Taiwan) were also highly conflicted earlier in the mid-to-late-20th Century. Of course, overall, it is a highly varied picture of societies around the world if they are compared on an index of peacefulness. Trying to move beyond this complex picture and away from simple assertions of causal correlations, then, requires theorisation of the possible mechanisms of social integration and peacefulness. Obviously, a multi-causal argument is required that tries to understand the set of interconnected economic, social, political, and cultural forces and their magnitudes that have to come together over time. All may be necessary but none sufficient. They include economic development, social integration, and political inclusiveness. At the centre of this complex structure have been interventionist, developmental states, but not necessarily welfare states of the Western type. The rise of the public sector, so characteristic of the Western state, has not simply been replicated elsewhere. Models of Developmental States: From State Capture to State Strength As argued in the foregoing, throughout the history of discussions and debates about backwardness, ever since the mid-18th Century in fact, the role of the state in its various manifestations within economy and society, on local and global levels, has been a central issue with a wide range of doctrines purporting to defend or reject a central role for state intervention. Laissez faire, A French liberal concept central to the 18th Century Physiocratic School of political economy and defended by Adam Smith in the 1770s, became influential but never really dominant, except in the British Empire, from the mid-19th Century and into the early 20th Century under British ideological and geopolitical influence. Elsewhere, including in the erstwhile British Dominions, the USA, France, and Germany, forms of protectionism and state intervention reigned in the early 20th Century. It was only in the 1920s and 30s in the advanced Angloworld and then in the late 20th Century and into the early 21st Century that free market liberalism, or neo-liberalism (or neo-laissez-faire), became the dominant economic doctrine in global policy debates. Theories of the capitalist state, especially in the Marxist tradition, were too fixated for some time on conceiving the state simply as an instrument of capital rather than as a powerful, quasi-independent, agent of socio-economic change. Today, this long-running debate is still reflected in, firstly, the current dispute over austerity and public finance in the on-going Western economic crisis, now centred on Europe; and, secondly, the extensive discussion about the doctrine of the developmental state, especially as used in relation to the East Asian economic development pattern, and its possible applicability to both other less developed regions as well as to understanding the earlier economic history of certain developed countries and regions. In other words, the problem of backwardness has become in recent times once more closely connected with arguments for and against the interventionist state in the development process.

30All the forms of developmental states examined here are actually forms of the co-ordination and regulation of regimes of capitalism that, while sharing general characteristics of the type, have nationally-specific features that are closely tied to the socio-cultural-historical evolution of particular societies. These are societies that have over time produced specific, organised state structures out of nation-forming processes. (C Allen 2010) The broad developmental state concept covers at least three interpretations and corresponding models and applications: (i) Social democratic welfare state model (ii) Ordo-liberal capitalist model (iii) Strong state (sometimes authoritarian) capitalist model. 21 Each of these models has a descriptive-analytical conceptualisation of the role of the state in developing and applying a strategy for industrial and social co-ordination and transformation aimed at achieving not just high average incomes and living standards within a dynamic economy but a form of modernization, however that is defined. Moreover, the strategy was premised on achieving convergence with the economically, socially, and geopolitically dominant nations of the time. The old idea of advanced and backward nations, while perhaps not expressed as such, was always a context for development policy but in the case of these models the active state was placed at the centre of the strategy. That is, it was held that convergence and catch-up could not be achieved by free, unregulated, markets alone. Protection of domestic markets and tolerance or even promotion of market distortions (such as public monopolies and private cartels) were necessary. Industrialising states in the North Atlantic and Australasian regions came under democratic pressure from the late 19th Century to not just achieve catch-up with Britain but to provide social welfare as part of that process. As the US grew in strength it began to move towards free markets in the early 20th Century but many other industrialising countries in the Anglo and Hispanic Settler category, the Continental European region, and East Asia (especially Japan) resorted to protectionism and state intervention. A key variable in all cases was the role of public pressure for democratisation and hence state activism for socio-economic objectives versus top-down state social activism to achieve national strength for military strength and social stabilisation, a process typified by Bismarckian welfare measures in the 1870s. Thus there are several important interconnected questions about developmental states: (i) Are all developmental state trajectories driven by the same imperatives in the long-run? If so, what are those imperatives, apart from the more obvious elements of social dislocation, class conflict, threats to capitalist survival, and social justice? To what extent is elite corruption and monopolisation of power an imperative? (ii) What is the role of democratic pressure from below? How does that pressure become expressed, suppressed, diverted, accepted, and so on?

21Two other possible candidates for state-centred development models are, firstly, Communism, especially the Soviet Union in the 1920s and 30s, but which differs very significantly in that all the others are resolutely capitalist and it was opposed to private accumulation of capital, private profits, and private investment; and secondly, Middle Eastern oil-state development but in this case the state-connected elite are essentially rentiers and conspicuous consumers without a strong program of actual development and modernization. Wage labour is provided there mainly by semi-servile imported workers with few rights.

31(iii) How are state processes of finance and administration developed to respond to developmental state imperatives? As Ben Fine (2013) has pointed out, the economic and political dimensions of the developmental state literature has separated economic and political issues. The economic aspect concentrates on the economic policies that the state should pursue in order to bring about rapid development and catch-up, such as state and market-co-ordinated investment of scope and scale, elimination of negative externalities and market imperfections, promotion of efficiencies, rejection of market fundamentalism, and so on. The very close interconnection between leading economic, intellectual, and bureaucratic actors is a key feature. Looking in more detail at the three models it can be seen that the separation of economics and politics varies considerably. The Social Democratic Developmental State It can be argued that the social democratic welfare state model of capitalist development (Social Democratic Welfare Capitalism – SDWC) emerged as a quasi-democratic engineered response to fundamental problems or contradictions within the capitalist industrialisation trajectory of the advanced countries from the late 19th Century. These problems of boom-bust cycles, underconsumption, falling rate of profit, and relative impoverishment of workers, had been identified by Karl Marx and his social democratic and communist followers and also by certain Liberals and Conservatives (but with less theoretical specificity) with differing national agendas of geopolitics and maintenance of class privilege. The state/socialisation remedy (abolition of private ownership) of Marxist political parties had initially been one of anti-capitalist revolution. But by the early 20th century the Socialist movement had split into reformers (or evolutionists) and revolutionaries. The reformers (or Social Democrats and Labourists) became associated with the reform of capitalism, not its abolition, by democratic, working class political mass mobilisation within liberal democratic constitutions. The reforms essentially involved state intervention in markets to curb private monopoly power and overcome charitable and market failures in the provision of social welfare. In the analyses given by Otto Bauer, Ernest Wigforss, J M Keynes (see Block and Somers 2015, p24), Karl Polanyi (1944), and Joseph Schumpeter (1946), the implicit strategy was to ensure the embedding of markets (to use Polanyi’s term) within democratic societies such that market processes served social purposes of equality of consumption, social integration, social peace, and welfare, rather than private accumulation of wealth and the widening inequality that had been the consequence of capitalist development in the 19th century. The social democratic state once it had emerged22 became a social investment and regulation state with the aim of providing

22The first, rudimentary, forms of the SDWC model of state intervention were in Australia and New Zealand in the last years of the 19th Century and first decade of the 20th century where radical social liberal and labour political parties first rose to prominence and captured state power in order to implement significant policies (including state-centralized industrial relations and new protectionism) that we can describe as social democratic developmental states. The materialist foundations of these developments were resource export wealth and the capacity for democratic state-directed rent transfers in the interests of maintaining social and political stability. (Cf Reeves, 1902, Lloyd, 2010). After the Great War the first major SDWC structure was developed in “Red Vienna” by the Austrian Social Democratic Party, led by prominent Austro-Marxists who had taken the reformist route to socio-economic transformation. Karl Polanyi was active in the Party before fleeing Austria and Hungary for exile in the UK. This example never achieved state-wide acceptance in the majority Catholic-Conservative Austrian state and, unfortunately,

32a wide range of infrastructure, services, and essential goods that should not be within the realm of private profit making, and a regulatory structure that included state monopolies, toleration of cartels, organised labour markets, and, in general, forms of corporatist co-ordination. (cf Touwen 2014). As such the state became the key agent of economic development within these advanced states, especially in the postwar, Bretton Woods, context of a world economy with strong state boundaries. The SDWC model of the combination of capitalist prosperity and accumulation and extensive state development of public infrastructure, services, and welfare provision, and the regulation of markets for socially-desired outcomes, had the consequence by the 1960s of highly regulated economies and societies in which the state owned more than half of all productive capacity through state enterprises and state services and regulated by fiat or through the market power of state enterprises almost all markets. But of course this was still a a model of capitalism, not socialism as such. The public sector had come to represent Polanyi’s hoped-for economic embedding of markets within societies. These advanced states had become large transfer and productive agencies in so-called ‘mixed economies’. Keynesian economic policies of business cycle interventions added to the ideological framework in many countries. Social democracy, like the backwardness concept, was originally a product of German thought and, indeed, the first welfare state regime (but not a social democratic one) was developed in rudimentary form by Chancellor Bismarck in the 1870s, as a deliberate counter to the radical development of Marxism and socialism that threatened the future of German capitalism, conservatism and geopolitical revanchism. The Nazi regime of the 1930s and 40s was also a type of (racially based) state-centred welfare regime, provided for the German volk but which had the opposite of welfare provision for non-volk peoples.

was crushed in the Austrian civil war of 1934 and replaced by the peculiar Austro Fascism, which was resistant to incorporation by German Fascism but was replaced by the relatively peaceful Anschluss of 1938. After the end of the war and especially after the occupation ended in 1955, the new Austrian social democratic party revised much of the Red Vienna program.

33Fig 2: Concept Map of Historical Emergence of The Social Democratic Developmental State

The Ordo-Liberal Developmental State A second form of state interventionist ideology emerged in Germany in the 1920s – ordo-liberalism. This doctrine favours markets but there has to be an orderly form of market development. Free markets are apt to become disorderly, and laissez faire cannot achieve a stable social and economic outcome, according to the Freiburg School that developed the policy of state intervention to ensure orderly markets with a Christian ethic of social stability and moral-behavioural conformism (refs). Ordo-liberals were against state ownership and Keynesian demand management, preferring to see free markets and sound state finances as the solution to problems of economic allocation. But the state did have to play a central role in welfare provision and policing the rules of free competition. “Rules’, set by the state and not the market, were the governing force of this social-market economic model, which was far from being socialist and not openly social democratic although there was some overlap in social policy and social ownership. Indeed, the ordo-liberalism of the post-war West German state, largely developed through the co-operation of German and Occupation administrations in the British and American zones, was centred on a strong state policy that lay at the centre of a form of corporatist compromise between capital, organised labour, and state institutions. The Marshall Plan and the 1950s debt restructuring and forgiveness agreement greatly aided the Bonn regime to build a welfare and state investment structure in the 1950s and 60s. The ‘economic miracle’ of those years reinforced the ordo-liberal ideology, which has persisted until the present. The Merkel/Schauble regime’s response to the Greek Eurozone crisis is very much in keeping

34with the ordo-liberal principles as robustly defended by Schauble, an intellectual product and heir of the Freiburg School (on Schauble’s ideology see Denord, et al, 2015) Fig 3: Concept map of the Historical Development of the Ordo-Liberal State

Ordo-liberalism can be understood as an early form of the regulatory state capitalism that developed in a different way elsewhere in the advanced capitalist countries in the 1980s and 90s (Braithwaite, ) as a response to the economic crisis of stagflation of the 1970s and early 80s, widely perceived as a failure of the Keynesian/social democratic model within the SDWC countries. Privatisation and de-regulation in the sense of removal of state monopolies and private cartels and the institutionalisation of a host of independent regulators, combined with a large growth of household debt, became the dominant model in the 1990s advanced West. State ‘capture’ was reduced. Regulatory capitalism transformed into a more complete form of neo-liberalism, especially with the attacks on organised labour and collectively-bargained wage systems in the millennial era and then gave way to an extreme form of anti-state neo-liberal austerity in response to the on-going great recession after 2010, following a short-lived re-Keynesianisation strategy in 2009-2010 involving economic stimulus and bank bailouts. By 2012 the dominant Western model of political economy became neo-liberal, anti-state austerity, aimed at removing the power of organised labour, the driving down of wages, and the instituting of unregulated markets to allow the free reign of global corporate interests. The future of democratic accountability of the state/corporate elite has become a pertinent issue (Crouch, Streeck, et al) The Asian Authoritarian Developmental State The third main form of developmental state structure emerged in the postwar decades in NE Asia, first in Japan and later spreading to South Korea, Taiwan, Singapore, and further afield. While Fine’s analysis (see above) does describe to some extent the situation in some

35Western SD states in the early post-war decades (such as Sweden and France), in Asia, unlike the West, this was not a welfare agenda. The governance aspect is about how the state develops the independent capacity to drive a national development agenda, whatever the details of that might be. In general, development was about catch-up in a post-colonial context, first in Japan under the post-war occupation; then South Korea, recovering from Japanese occupation followed by devastating civil war, then attempting to catch-up to Japan, and also avoid invasion again from the North; and in Taiwan, also attempting to catch-up to Japan (again the old colonial power) and at the same time establishing the material base for avoiding invasion from the People’s Republic of China. But the place of democracy in the process makes a crucial difference. Japan’s democracy was imposed by the Occupation and then took root in a particularly co-ordinated way in which capital, labour, and the state were developmentally focused through public and private large bureaucratic institutions Initially the Asian states were politically and wage repressive and many still are. The lack of democracy prevented, for a time, the assertion of labourist and social democratic interests. From the mid-1940s most advanced Western states had been captured by social democratic political forces. Of course they were “mature” industrialised economies and societies in comparison with the Asia states. In the rapidly developing Asian states in the 1960s-80s (particularly South Korea, Taiwan, Thailand, and Indonesia) the problem of extensive corruption, elite rent seeking, and repression led to democratic revolts by organised labour and social movements. Many states were forced to democratise formally (eg South Korea, Taiwan, Thailand, Malaysia, Indonesia) but repressive tolerance means the democratic substance and civil society development are lagging and authoritarianism still lurks nearby (eg Thailand, Malaysia, Singapore)23 In the 21st century a welfare agenda has become more central in some high income states (South Korea and Taiwan), which follows the Japanese experience. The emergence of a welfare state has happened but still in a limited way compared with OECD averages. In other places (eg Singapore and Hong Kong) there has been no development of a welfare state as such and the state policy has concentrated on compelling private provision of welfare, such as housing, education, and pensions, and the promotion of family networks of social support and employment (refs: Boyer, et al, Estevez-Abe, Kwon).

23 Of course authoritarianism also remained viable in many Western states in the early 20th Century and succeeded in capturing the state in many places in the 1920s-30s (eg Italy, Austria, Germany, Hungary, almost in France), largely as a consequence of the immature democratisation that had recently occurred and the social fragmentation of the Great Depression. In other cases (eg USA, Scandinavia, The Netherlands, UK, Australia, New Zealand, democratisation had deep social roots and was not threatened internally.)

36 Fig 4: Concept map of the Historical Emergence of the Asian Developmental State

Economic backwardness has certainly been or is being overcome through rapid development in these Asian states. But the middle income trap is still a problem for some countries. What is the future of the public sector and its connection to development in East and SE Asia? And, by contrast, the situation of the South Asian region is one of a bare emergence of a growth agenda at this time. Social dislocation, fragmentation, and violence are still endemic in South Asia and the role of developmental policies are yet to bear lasting fruit. Ethnic and religious conflict is endemic in South Asia and highly destabilising and also present to a lesser extent in SE Asia where social fragmentation is of both class and ethnic origin. Wealthy postcolonial/ethnic elites are deeply embedded in most SE Asian states and social tensions swirl around their socio-economic power. The place of China under the rubric of Asian developmental state is not straight forward but it clearly fits within this characterisation for the authoritarian state has been and remains fundamental. …….[to be continued] Lessons from Some Failed Developmental States When viewed in comparison with successful developmental states in Europe and East Asia, attempts to construct developmental states in other regions have been markedly less successful. These less successful (and even disastrous) cases, along with the successful ones, are highly instructive for theorising the future of socio-economic development and social peacefulness. The widespread desire for develomentalism in the post-1950s, particularly in the new states of the former imperial periphery, had many failures and few successes. [to be continued]

37VII

Globalisation, Backwardness, and Democracy in the 21st Century: Beyond Developmental States Towards a Planetary Perspective?

The usages of development state concepts has become widespread in recent decades as paths out of underdeveloment and social fragmentation have been sought. [Harrison on Rwanda, …Latin America……..other references]. But how realistic is this today? Perhaps the China case is the exception that is proving the rule. Only Vietnam seems to be following the NE Asia path. No other similar new developmental state is emerging in the rest of Asia or elsewhere in the less developed world. In Latin America states are in crisis and the Middle East and Africa are experiencing state erosion in most places. The global commodities crisis is one significant cause of this but the causes are more globally systemic. Can developmental states still emerge in a world of globalisation and the quasi-official erosion (under the Washington consensus) of state power? Indeed, the possibility of new sovereign, powerful, developmental states emerging has withered in the context of globalisation and international integration. The Eurozone crisis also shows this problem. Neo-liberal (small state) ideology, the “official” ideology of globalisation, has prevailed there even in the face of the absolute failure of austerity to solve the crisis (Crouch 2011, Krugman, 2014, Wren-Lewis 2015, Varoufakis……). The EU super state institutions have not achieved developmental capacity. The peripheral Eurozone states are struggling to survive their loss of economic sovereignty within the Eurozone and to achieve convergence (ie overcome their backwardness). Is loss of national sovereignty (in the forms of, among others, independent currency, public finances, immigration control, and protected industrial development policy), itself a recently hard-won situation for many European countries after the collapse of the Soviet bloc, going to be compensated adequately by membership of a quasi-federation with a monetary union, a weak central bank, and no transfer system? The Greek case would seem to indicate the unsustainability of that. Since the collapse of the Soviet bloc and Yugoslavia, the “EU Project”, epitomised by the Euro creation, switched from being a Western European integration project of more or less similar countries to being a “rescue” project to overcome Central European backwardness. Unfortunately, the history of such unifications, including federations, shows that their early effects are not benign for many weaker members.24 Without a fully-developed transfer system federations always seem to be imperilled because they struggle to overcome the problem of regional backwardness. In the European case, the issue of uneven development is the core of the problem – some areas are much more advanced economically and financially than others and the issue of further integration is foundering on this problem of backwardness. This has been exacerbated greatly by austerity. Indeed some federations fail completely from their inability to solve the uneven development problem, most notably in recent time the case of Yugoslavia. But, as that case also shows, this inability is exacerbated severely if there are historically-derived sociocultural differences and enmities. The EU case today has worrying similarities to Yugoslavia. How to overcome the consequences of uneven development within federations (as well as within unified but regionalised nations) is a crucial issue, as the United States found in the 1860s and as even

24 As discussed further below, the German case of federation post-1870 was one of uneven development that prompted much policy and political discussion, including the founding of the Verein für Socialpolitik, through which Max Weber made his earliest contributions; much debate in the German Social Democratic party by, among others, Karl Kautsky; and one of the canonical texts of the backwardness literature, by Alexander Gerschenkron (1952). All were concerned with the political consequences of uneven development.

38experienced by the peacefully-formed and socially but not economically homogenous Australian federation in the late 1920s and 1930s.25 And the EU federal problem can be seen as just an extreme example of the problem faced by all backward countries and areas in a globalising world. Overcoming backwardness without a strong state may turn out to be impossible, thereby denying the Hayekian neoliberal and market-fundamentalist prescription for development. Globalisation was ideologically implicated within neo-liberalism and instituted through a combination of the “Washington Consensus” between the main global regulatory institutions, the US government and Federal Reserve, and the ramped-up Cold War pressure that led to the collapse of the Communist regimes of Eastern Europe. Globalisation was accompanied by financialisation in the West in order to maintain standards of living (Crouch’s ‘Privatised Keynesianism’). But this was and is unsustainable, which led to austerity and the consolidation state policy, a la Streeck’s analysis. ………………… The most remarkable consequence and development of the early globalisation turn, in the late 1980s and early 1990s, was the internal transformation of China under Deng from a rather orthodox communist regime to an authoritarian state capitalist regime that produced the most rapid industrial transformation process the world has yet seen (refs). This mirrored, in a sense, earlier developments in other East Asian states in the post-war era that had earlier produced “economic miracles” through developmental state action. As indicated above, these developmental states pursued a policy of wage repression, exchange rate suppression, infrastructure investment, and industrial export expansion. The Bretton Woods system of fixed exchange rates and international trade management was crucial to the “miracles” of Japan, Hong Kong, and Singapore; and after the liberalisation of international trade from the 1980s the markets of the world became more open to East Asian exports, thus allowing the rapid development of Taiwan, South Korea, and lastly China. The East Asian catch-up strategy was enormously successful (refs to China’s rapidity of development) But the enormous surplus funds from Asian trade had to be re-cycled through the world’s financial systems, fuelling a massive household debt expansion in the West and a vast imbalance between Western debtor nations and Eastern creditor nations. ………… The ideological and institutional attack on the socio-economic roles of the state and public sector in the advanced West today, in a manner and degree not seen since the pre-1940 era of laissez faire, has come as the culmination of a growing trend towards marketization, anti-state ideology, economic liberalisation, and growing inequality of the past few decades and has been accelerated by the public fiscal crisis consequent upon the bailouts of the Great Recession. So far, however, this recent development has not succeeded in any great degree in reducing the scale of public sectors and the interventionist roles of states to anything near the kind of political economy that ruled before the war. Indeed, a longer-term perspective,

25 The Australian case is interesting because of the solutions that were found for a severe problem of uneven development and core/peripheralisation in a peaceful society; viz: centralization of public financial and debt power and far greater horizontal fiscal equalization through extensive de-politicised transfers in order to enable equal provision of public services. The transfer mechanism of the Commonwealth Grants Commission operates to this day.

39such as developed by Edward Nell (1988), Peter Lindert (2004), and others, sees the rise of the public sector as a highly significant global phenomenon of the past century, which is still continuing in some newly-industrialising countries (Sanderson, et al). Taxation and public spending, as well as regulatory intervention (for and against free markets) has empowered many national governments to become chief actors and structural determinants in the lives of their people. Economic transformation, public expenditure, and high standards of living seem to have formed a symbiotic socio-economic system of capitalism in advanced Western and some other OECD countries. The details of the particular routes of state formation and state-democracy/autocracy relationships are crucial to understanding how this occurred. And the nature of states within differing social formations in terms of their class composition and interests and their allegiances/connections with their wide societies, that is their forms of social embeddedness or otherwise, are all basic issues that should be examined, as Barrington Moore argued in 1966.

VIII Towards a Possible Future: Social Investment, Integration,

and Post-Carbon States? The threat of global climate change is now finally starting to move to the centre of public concern but can there be solutions within the present global capitalist regime? Is the trade-off being faced by many advanced Western states today over this issue and others one of internal cohesion versus global co-operation? The failure of neoliberal austerian policy to overcome the Great Recession of the West must eventually produce an ideological and policy shift within political economy. Environmental policy may take longer and be more painful for nothing short of the rapid abandonment of the fossil-fuel economy will be required. Such shifts always take time, however, as Keynes knew full well when struggling to overcome the disastrous grip of lasissez faire in the 1930s. The mounting economic evidence and the growing political discontent on both the far right and populist left will together push policy-makers towards new strategies of socio-economic reconstruction. Just as the surprising and transformative Roosveltian New Deal grew out of the failure of the Hoover austerian policies in the 1930s and the social democratic hegemony erupted in the 1940s, so it is possible that another turning point could arise, particularly in Western Europe, in which social (and green) investment states are re-created as a new kind of post-industrial, post-carbon, regime of social inclusion and social reconstruction that aims at diverting or subverting and overcoming global capitalism’s disdain for local democratic control. That is, the post-democratic power of global corporations, including especially the power of pharmaceutical, financial and fossil fuel corporations and their client states, a power structure that has operated against the interests of most people and throughout the world and the local and global environment, has produced a dangerous situation whereby international trade policy and geopolitics, and thereby domestic policy and law, are determined by these corporations. Nowhere is this more clearly seen than with the recently announced ‘breakthrough’ with the Trans Pacific Partnership (TPP) trade negotiations, under which global corporations have been granted greater power than states to determine trade and social rules. Subsidised medicines, high labour standards and wages, and welfare are all threatened by American-based global corporations in the interests of so-called ‘free trade’, which is actually highly managed trade (Stiglitz, 2015). Even Hilary Clinton is critical. This agreement could be described as a new form of ‘free trade imperialism’, echoing the imposition of British goods (especially textiles) on the Indian market in the 19th century to the severe detriment of Indian producers.

40 Developmental states can be understood as 20th Century forms of local capitalist resistance to global capitalist power, free trade imperialism, and geopolitical imperialism. The question for the advancing 21st Century is whether states can regain a degree of the power they have lost under globalisation in order to rediscover the possibility of social investment if not trade protection. Socio-political and environmental backwardness is becoming increasingly more important than economic backwardness in a world of global technologies, global environmental destruction, and global movements of people. The role of states in building viable and prosperous societies will be necessary as the world becomes increasingly economically integrated via corporations that have no interest in social construction or environmental restoration but do have interests in wage repression. In 2016, unfortunately, the trend seems negative in these respects but economic and environmental structural developments can have a powerful material effect on politics and institution building, just as the global crisis of 1929-45 had an enormous and lasting effect of a progressive kind.

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