Class and State

The state in any society represents, first and foremost, the material interests of the ruling class. It is false to say that the state is impartial. At best, the state will try to defuse conflicts between the interests in play, such as when it offers arbitration in a labor dispute, or when it mildly regulates the worst excesses of capitalism so as to better defend the system as a whole. But this managing role is secondary to the state's main task, which is lubricating the motor of the profit system, at home and abroad, in the interests of the 1 percent.

The politicians and state bureaucrats favor the corporations and entrepreneurs. They praise them as essential 'risk takers.' They plow billions of public dollars into the military-industrial complex, safeguarding offshore profits -- and then they quibble over social welfare costs at home, while subsidizing big pharma and the health insurance industry.

When profits are multiplying, the state is inclined to stay out of the way. 'Government must not interfere in the economy. The free market knows best!'

But when a market crises develops, as in 2008, the song sheet is switched as fast as a game of musical chairs. The government falls over itself to intervene in the economy. It goes so far as to bail out big banks, insurance conglomerates, and industrial monopolies, creating trillions in public debt.

One might justly ask, 'Where are the risk takers now? Where is the wisdom of the free market? Should the banks not be allowed to sink or swim? Didn't you say government should stay out of business?'

Well no, not really. Under the circumstances, that would never do. Instead, the mantra becomes: 'The banks are too big to fail!'

Come hell or high water, in a crises, the capitalist state will rescue the monopolies. The working people will foot the bill. Living standards will fall. There will be claw backs of social benefits and pensions will shrink. Long-term fiscal austerity will be the order of the day. For while it is feasible to compensate bankers for billions of dollars worth of fraudulent mortgages, it is somehow out-of-the question to give relief to homeowners under water with crippling debt.

Such is the class logic, we should realize, of the capitalist 1 percent.