This is Part 2 in my series about different theories of power. My previous article in this series, Theories of Power: Part 1, Pluralism, addresses the pluralist view of power. Pluralism, very briefly, is the view that power is held by various groups in society. It is like the theory of free markets applied to the political realm because both are based on competition. In free markets, capitalists compete with one another for the “votes” of consumers; similarly, in pluralism, there is competition among various interest groups for votes.  G. William Domhoff,  in his article Who Rules America: Alternative Theoretical Views, succinctly summarizes what pluralism stands for when he writes, “who controls the state”:

the American public through political parties, elections, interest groups, lobbying, and the force of public opinion as pluralists claim.

The “trick” to make society work, according to pluralists, is to make sure that power is dispersed among many groups. As Domhoff tells us:

Most of these “society-centric” analysts have been pluralists. That means the control of the state by private interests was not to be deplored because many different groups were involved.

Now in this article, I move on to another theory of power, namely, the State Autonomy Theory. The plan for this paper is simply to:

  1. Summarize the major points of the State Autonomy Theory based on G. William Domhoff’s article Who Rules America: Alternative Theoretical Views
  2. Apply the insights of the State Autonomy Theory to the Right Wing Libertarian or Austrian School views on the government and state, because I think there is some noticeable overlap here

The Major Points of State Autonomy Theory

My general impression of the State Autonomy Theory is that it views the state as some sort of super alien being with its own dominant will that is detached from the rest of society. It is as if there is society in one corner of the room and the state in another corner.  Power is not in the hands of the general citizenry, nor is it in the hands of a dominant social class. Instead, the government has “independence from the rest of society” or is considered an “autonomous” entity. Domhoff, echoing what John Taylor Gatto wrote in Dumbing Us Down: The Hidden Curriculum of Compulsory Schooling, tells us that under the State Autonomy Theory, “the state can and does act in its own interests, which are stability and expansion.” Gatto said a similar thing when he writes that “nearly a century ago a French sociologist wrote that every institution’s unstated first goal is to survive and grow, not to undertake the mission it has nominally staked out for itself” (58). In fact, the State Autonomy Theory seems to even echo some of the ideas coming from a book you can download for free at the Mises Institute, Gunter Reimann’s The Vampire Economy: Doing Business Under Fascism. In Reimann’s book, he mentions how the state seems to take on a “mind of its own” when it gets away from its original architects. Reimann explains how the original big business architects of Nazism had intended to create a Nazi state as their tool; unfortunately for these Nazis, their tool got out of hand and the Nazi state developed a mind of its own:

It was their hope that the Nazi party would serve as their tool. Especially was this the belief of the important industrialists who had feared the loss of their monopolies, and of the big agrarians who could not survive the crisis without fresh State subsidies. Both eagerly sought political power in order to safeguard their positions–not merely against social revolutionary forces, but also against business competitors who attacked their monopolist privileges. They invested huge amounts of money in the Nazis. They did this, or had to do it, on too large a scale. For the power they helped create all too soon became the master of its creators–“authoritarian,” independent of their will and regulation. (291-292, bold emphasis mine)

Since the state is this independent and autonomous unit with its own will, according to the State Autonomy Theory, then “government officials can enter into coalitions with groups in society, whether business, labor, or political parties, if they share the same goals as the state” (Domhoff, Who Rules America: Alternative Theoretical Views). When asked “who controls that state,” Domhoff replies:

elected officials, appointed officials, and career employees as the state autonomy theorists claim.

Domhoff tells us that there are three major reasons that explain how the state becomes this independent monster with its own will (with bold emphasis mine):

  1. its monopoly on the legitimate use of force within the country
  2. its unique role in defending the country from foreign rivals
  3. its regulatory and taxing powers

Finally, the last point I want to mention about the State Autonomy Theory is that it stresses the autonomy or independence of the state from corporate or capitalist power. In other words, the state and capitalism are two distinct entities. We see this very clearly when Domhoff writes the following about how the state and capitalism interact under the State Autonomy Theory:

In a capitalist world, the state’s leaders do their best to keep capitalism healthy because that is in their own interests in terms of state revenues and a happy civilian population, not because they are first and foremost concerned with capitalism and capitalists. (bold emphasis mine)

Applying the State Autonomy Theory to Austrian Economic Views of the State

My sneaking suspicion is that the Austrian School approach to the state and the State Autonomy’s approach to the state share some noticeable points of overlap. Let me explain why I think this overlap exists.

First, notice that the State Autonomy Theory creates this separation between the state and capitalism. This, of course, is the essence of the Austrian school anarcho-capitalism–this view that we can separate capitalism from the state and we can abolish the state while keeping capitalism.

We have the state as this independent will that can enter into “coalitions” or alliances with different groups in society. Domhoff mentioned a few of these possible “alliance partners” with the state: business, labor and political parties. Let’s translate a few of these into “Austrian” lingo:

  1. Let’s say that the independent and autonomous state forms an alliance with labor. Then all these “socialist” type laws will be passed–welfare, unemployment insurance, occupational health and safety laws, minimum wage laws and so on. Then, the reaction will come in the form of Austrian books such as Hans-Hermann Hoppe’s Democracy: The God that Failed. Democratic states are just monsters out there ruining the economy by distorting time preference and looting the productive assets of the economy. Or as Hoppe puts it, “it must be regarded as unavoidable that public-government ownership results in continual capital consumption. Instead of maintaining or even enhancing the value of the government estate, as a king would do, a president (the government’s temporary caretaker or trustee) will use up as much of the government resources as quickly as possible, for what he does not consume now, he may never be able to consume” (24).
  2. Let’s say instead that the independent and autonomous state is thinking about forming an alliance with business. Now we have the textbook Austrian School distinction between the “market” entrepreneur and the “political” entrepreneur coming into play. Because capitalism is separated from the state, according to the State Autonomy Theory, then we can have the Austrian “market” entrepreneur scenario, i.e., the story of the entrepreneur who gets rich by only engaging in free market transactions and by never getting any state assistance. The “market” entrepreneur is the “good guy” who totally separates his capitalist enterprise from the state. If, on the other hand, an alliance is actually formed between the autonomous state and business, then we have the textbook Austrian “political” entrepreneur scenario. In the “political” entrepreneur scenario, the “bad” capitalist (unlike the “good” Austrian capitalist) is running to the government for some nefarious alliance, maybe a subsidy or a bailout or protection from foreign competition and so on.  I have written more about this Austrian distinction between the “good” market entrepreneur and the “bad” political entrepreneur in my articles Doubting the Right Wing Libertarian Robber Baron Revisionism and More on James J Hill: Putative Market Entrepreneur Extraordinaire.

The last point I will make is to simply point out that there is some obvious overlap between the Austrian theory of the state and what is offered by the State Autonomy Theory when it comes to the issue of what constitutes “state independence”? In the State Autonomy Theory we are told that “state independence, usually called ‘autonomy’ is said to be due to several intertwined factors.” I listed those three major factors above, but let me reproduce them again. This time, however, keep in mind that I am trying to illustrate the overlap with the Austrian theory of the state:

  1. its monopoly on the legitimate use of force within the country
  2. its unique role in defending the country from foreign rivals
  3. its regulatory and taxing powers

Now let’s go pull out Hans-Hermann Hoppe’s book Democracy: The God that Failed in order to show that all three of the above issues from the State Autonomy Theory are pretty much what Austrians obsess about when it comes to the state.

Chapter 2 in Hoppe’s book begins by saying that

a government is a territorial monopolist of compulsion [sounds like “force” to me]–an agency which may engage in continual, institutionalized property rights violations and the exploitation–in the form of expropriation, taxation and regulation–of private property owners. Assuming no more than self-interest on the part of government agents [the State Autonomy Theory!], all governments must be expected to make use of this monopoly and exhibit a tendency toward increased exploitation. (45, bold emphasis mine)

Well, the overlap isn’t exact, since Domhoff tells us that the state would try to keep capitalism going by keeping capitalism healthy, while Hoppe tells us that the complete opposite will happen when he writes about the “increased” exploitation.  But notice the overlap. Both Hoppe and Domhoff mention that the state is a (1) monopolist, (2) of force or compulsion, with the power to (3) tax and regulate. And notice how Hoppe specifically states that there is “self-interest on the part of government agents.” That is precisely what we find in the State Autonomy Theory: “for the state autonomy theorists, then, the state can and does act in its own interests.“

I don’t want to belabor this, but one could find relatively easily Hoppe bemoaning the fact that the state is the monopoly defense provider as well. This, of course, would demonstrate that Hoppe–our Austrian school economist–is in conformity with point 2 of the State Autonomy Theory. This is the topic of Hoppe’s chapter 12, where he begins this chapter by stating that

I will demonstrate that the idea of collective security is a myth that provides no justification for the modern state, and that all security is and must be private (239).

And finally, to conclude my article, I want to point out the significance of linking the Austrian school’s views about the state to those offered by the State Autonomy Theory. This is because it provides for some new approaches to criticizing the Austrian School of Economics. The criticisms that are leveled at the State Autonomy Theory could possibly be turned around and leveled at the Austrian School as well.  If you read Domhoff’s article, it is fairly obvious that he strongly dislikes the State Autonomy Theory; Domhoff is quite convinced that the State Autonomy Theory is wrong mainly because it just does not apply to the United States. I will end my article by citing Domhoff on this very important point:

Even with the idea of potential autonomy available as a way to concede that there is corporate dominance in the United States, they insist on giving the American state considerable autonomy. However, there are many reasons why this potential does not manifest itself in the United States. State autonomy is only possible when a state is unified and relatively impermeable to the employees and representatives of private organizations. But the American government is neither. (bold emphasis mine)