The Formation of Power Structures
As discussed on a separate page, power comes in various forms: physical, personal, economic or material, social, cognitive, and institutional. Each form of power is linked to particular resources. While everyone has access to at least some resources, some can draw on a larger and varied pool of resources. The way power resources (of different kinds) in a society are distributed, interact, accumulate, and (more or less) concentrate produces the power structure of that society. In principle, the distribution of the various forms of power can differ significantly, from more or less egalitarian to highly accumulated and concentrated in a few hands. However, there is a tendency for power to accumulate across the different forms, as each form of power can be used to gain (more) power of a different kind. Consequently, the overall power structure is unequal in all societies, although much more so in some than others.
Mechanisms of building power
Therefore, understanding a society’s power structure requires looking at how the different forms of power in that society are distributed and how that distribution has come about. It involves analysing how power has been accumulated (by individuals or groups), within and across different forms, and how and to what extent this has led to the concentration of power. Power can be accumulated through various mechanisms, for instance, when individuals use their charisma (personal power) to build a following (social power), which in turn can be mobilised to obtain an official position (to acquire institutional power). The mechanisms by which power is accumulated can differ from society to society (related to existing socio-cultural, political, and economic systems). Still, there are good reasons for arguing that the type of economic system, in particular, plays a key role in how power is (and can be) accumulated. While all forms of power resources can be used to gain more power, economic power is arguably the most fungible form as it can be used to buy most other forms of power, including the knowledge of experts and the talents of all sorts of people (cognitive power, personal power), political-institutional power (political campaign funding for oneself or particular candidates, financial support for a political party, bribes or more subtle ways of buying influence), and paying people to threaten with or use violence to intimidate or eliminate opponents (physical power). Corporations may pay fake grassroots groups to air public demands in support of their interests (social power).
It is plausible that the opportunities for accumulating economic power in hunter-gatherer societies were much more limited than in agricultural societies. In the latter, rulers built wealth from the surplus produced by farmers, backed up by physical power (soldiers) and cognitive power (a belief in their divine status). In capitalist-industrial societies, the primary mechanisms for accumulating economic power lie in the ownership of capital (physical and financial). It is no secret that the more financial-economic power one accumulates, the easier it gets to make more money, and the greater economic disparities become.
Generally speaking, the distribution, accumulation, and concentration of economic power are the principal determinants of the power structure of a society. The dominance of economic interests is not just reflected in the choices and policies of governments but, more fundamentally, in how the needs of those (now predominantly capitalist) interests shape political and economic institutions. Agency plays a key role in this process. For instance, the creation of neoliberal economic institutions was not the result of capitalist imperatives imposing themselves upon governments, but of deliberate, well-organised, and well-funded political campaigns by particular economic interests and ideologues.1
Political Economy: Analysing the Dynamics of Power
Political economy is key to understanding the interactions between (high-impact) agency and the accumulation and concentration of power. Political institutions commonly work in tandem with the prevailing economic system to create conditions favourable to meeting the perceived economic imperatives of the dominant class. This does not imply economic determinism as governments always have a choice about how those imperatives are interpreted (also given the differences within that class) and weighed against other core functions of the state. States and governments differ in their approaches to these issues. The distribution of economic power is not the only determinant of the allocation and distribution of political-institutional power. Sometimes, political leaders and groups that gain the official seats of power are not the favourites of the economic elites.
As noted above, economic and political systems are closely intertwined. An economic system needs the power and support of the state to be established as the dominant (or hegemonic) system, while the institutions of the state, and the role and functions of governments, are strongly influenced or shaped by powerful economic actors and their (perceived) interests. The economic power accumulated by the latter often allows them to have their way in terms of the decisions and policies made by governments. Politics and economics influence or determine who gets what, when and how, giving an economic dimension to politics and a political dimension to economics. However, although economic and political systems are closely intertwined, distinguishing between them is valuable and essential.
The Power of States
As discussed on a separate page, states (presently the most important political institutions) have four core functions. The economic function (the protection and promotion of economic interests) is only one of these, and not necessarily consistently dominant. Moreover, although economic interests may disproportionately influence states and governments, they are not necessarily homogeneous and unified in their interpretation of economic imperatives. Political systems are ensembles of formal political institutions that assign official power to offices and organisations and lay down the rules by which decisions on behalf of a polity’s members (such as a state) are made. In principle, political institutions can cover any issue affecting the members of a polity. Therefore, states are (still) the most important ensembles of political institutions and have, in principle and also in practice, a degree of autonomy that can be used for different and even conflicting purposes.
In this context, it is crucial to keep in mind the formal sovereignty and primacy of political institutions over economic institutions. States are the sovereign political institutions (constituting the highest power within their boundaries) that formally represent all citizens and have the legitimate right and responsibility to shape economic institutions. In contrast, economic institutions have neither a formal right nor a responsibility to shape political institutions. In the literature, the hierarchical nature of the relationship between political and economic institutions is referred to as “embeddedness”: economic institutions are, or should be, embedded in the political system. Although the relationship and interactions between political and economic systems can be heavily influenced or even dominated by (highly) concentrated economic power, economic systems should be subordinate to and embedded within the political institutions that represent the whole of society, not vice versa.
Thus, from a political (in particular democratic) point of view, it is essential to emphasise the relative autonomy of the state and its potential to make decisions that may not be welcomed by, or that are perceived to go against the interests of, powerful economic actors. This is, of course, highly relevant to the discussion about the scope for the greening of political systems and the debate about the extent to which governments are capable of (or may develop the will to) alter economic systems. More strongly, if economic obstacles are inherent to the economic system, the question arises as to whether and how governments can transform the economic system into one that is compatible with long-term environmental protection.
Political-Economic Systems: A Classification
For these reasons, when analysing and discussing the interactions between political and economic systems, we need to look closely at the (kind of) economic system that prevails and the type of political system that is in place and its relative autonomy from, and actual or potential control over, the economic system. Theoretically, a large variety of political systems can be combined with an equally large variety of economic systems. In reality, the similarities between many political and economic systems make it possible to identify a handful of categories of political-economic systems.
The table below presents a classification of political-economic systems based on two main factors or criteria: first, the extent to which political systems are more or less democratic or authoritarian; second, whether their economic system can be characterised as capitalist, socialist, or a mixed or hybrid system. This leads to six types of (possible) political-economic systems, five of which have had counterparts in the real world.
Political-Economic Systems
Political systems | Capitalist | Socialist | Mixed |
| Democratic (more or less) | Liberal-democratic capitalist systems | Democratic-socialist | Social-democratic systems |
| Authoritarian (more or less) | Authoritarian-capitalist | Authoritarian-socialist | Authoritarian hybrids |
As noted above, although capitalism has become a globally dominant economic system, there are differences between countries in the way(s) capitalism has been practised and/or managed. This applies even within the two categories of capitalist systems identified above, as discussed in the “varieties of capitalism” literature.2 Socialist economic systems have been relatively uncommon, despite the countries where they were established (often through revolutions), including the Soviet Union and China, playing a significant role in the global political and economic arena during much of the 20th century. However, it is notable that all countries that have (had) a socialist economic system also have (had) authoritarian political systems. Whether this is necessarily so, perhaps related to an inherent logic of socialism, is a question I discuss below and on the socialism and the environment page. However, thus far, no country has had a democratic-socialist system (which must be distinguished from social-democratic systems). At this stage, whether and how such a system would operate remain open questions.
Given the demise of the Soviet Union and its socialist system in the early 1990s, the introduction of capitalism as the dominant economic system in Russia, and China’s embrace of capitalism at about the same time, it has been argued that the debate on which political-economic system is the “best” has been decided. Capitalism became a globally dominant economic system encompassing virtually all countries. While not all countries became instantaneously liberal democracies, it was thought and expected that the introduction of capitalism would also lead to the spread of liberal democracy, which was held up as the gold standard for political systems, for both normative and practical-political reasons. Liberal democracies were regarded as the most desirable and essential systems for the effective functioning of capitalism. It was thought that China’s political system would almost inevitably move towards a liberal democracy due to the emergence of a capitalist class and the achievement of a higher standard of living by much of the population, creating a large middle class that would want and demand political liberalisation. However, the actual political developments in China, especially since the rise of Xi Jinping as the supreme leader, have contradicted these expectations. The Chinese regime arguably has become more authoritarian than ever, backed up by a sophisticated surveillance system covering the whole population.
At the same time, in many countries, liberal democracy has come under threat, even in what can be considered the heartlands of liberal democracy, the United States, the United Kingdom, and many European countries. Liberal democracy may still be widely regarded as the gold standard of democracy. Still, in the eyes of many people, liberal democracy has failed them as it served foremost the interests of the elites (especially the 1%). The number of so-called illiberal democracies has been on the rise, while democracy has been steadily eroding with the adoption of anti-terrorism legislation and expansive surveillance tools and powers by many governments.
Questioning the Logic of Political-Economic Linkages
These developments raise fundamental questions regarding the links between economic and political systems, particularly between capitalism and liberal democracy. Capitalism and liberal democracy developed hand in hand, with liberal democracies creating and serving the institutions necessary for or conducive to the development of capitalism. At the same time, the development of capitalism created a wealthy and powerful class, or elite, that formed the social basis for liberal democracy. However, this does not mean that non-democratic systems cannot create and uphold capitalist institutions. Numerous historical and global examples support the argument that capitalism can function effectively without the need for democracy. Fascism, dictatorship, and capitalism have been happy bedfellows in many countries around the world, with China after the death of Mao only being a spectacular example of how successful such a combination can be.
On the other hand, although all countries with socialist economic systems have also had authoritarian political systems, legitimate questions can be asked about whether this is a necessary or logical relationship. Arguably, there is no logical connection between socialist ideology and authoritarian political systems, even though many political theorists and commentators would like people to believe so. On the contrary, there is a strong case for arguing that socialist ideology is compatible with and forms a basis for advocating stronger and more meaningful forms of democracy. One main reason socialist systems have been combined with authoritarian political systems is mainly historical, linked to their precariousness in the face of hostile and more powerful capitalist political-economic systems and interests.
In line with the logic of my argument, meaningful democracy is only possible if power, particularly economic power, is distributed far more equally than has been the case in liberal democratic political-economic systems. There can be no real political democracy without economic democracy. The accumulation and concentration of economic power leads logically and almost inevitably to authoritarian (oligarchical) political systems, even under the guise of liberal democracy.3 Recognising this link, a strong case exists for creating democratic socialism systems. But, of course, given the enormous discrepancies in power within and between countries, doing so poses a big challenge.
The Imperative of Political-Economic Change
Societies have little choice but to pursue fundamental political-economic change to enhance the chances of humanity’s continued existence on this planet. The governments of all existing political-economic systems have been unable and/or unwilling to make the fundamental political, institutional, and economic changes necessary to put them on a less unsustainable path. The institutional features of these political and economic systems raise serious doubts about whether they can be made sustainable or “greened”. This also applies to the actual (industrial) production systems established in most countries, which have become increasingly globalised.4 Accompanied by its own socio-cultural beliefs and power basis, industrial development created industrial societies hooked on industrialism. Industrial production systems have been common to all five types of actually existing political-economic systems, but their environmentally unsustainable nature has often been ignored or downplayed. Yet, intertwined with the development of science and technology, industrialism arguably poses the most insidious environmental and social threats, making the environmental challenge even more formidable. While there has been much debate about the relative (de-) merits of capitalism and socialism and their ability to effectively address the environmental challenge, the “small” matter of industrial production has received, by comparison, much less attention.
References
- MacLean, Nancy (2017, e-book ed.), Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. Scribe Publications. ↩︎
- Soederberg, Susanne, et al., Internalizing Globalization: The Rise of Neoliberalism and the Decline of National Varieties of Capitalism. Basingstoke, UK: Palgrave Macmillan; Prevezer, Martha (2017, 1st Edition), Varieties of Capitalism in History, Transition and Emergence: New Perspectives on Institutional Development. London: Routledge; Busch, Andreas (2005), “Globalisation and National Varieties of Capitalism: The Contested Viability of the ‘German Model’”, German Politics, Vol . 14, No.2, 125-139. ↩︎
- Winters, Jeffrey A., Oligarchy. Cambridge: Cambridge University Press. ↩︎
- In Bolivia and Ecuador, “the environment” has been integrated into the political constitutions. Still, it is debatable to what extent the economic systems in these countries have moved towards socialism and/or have been greened. See Zimmerer, Karl S. (2015), “Environmental Governance through “Speaking Like an Indigenous State” and Respatializing Resources: Ethical Livelihood Concepts in Bolivia as Versatility or Verisimilitude?”, Geoforum, Vol.64, 314-324; Webber, Jeffery R. (2012), “Popular Movements, Political Economy, and the State in Bolivia: An Interview with Oscar Olivera and Freddy Villagómez”, Capitalism Nature Socialism, Vol.23, No.3, 6-19; Grugel, Jean and Pía Riggirozzi (2012), “Post-Neoliberalism in Latin America: Rebuilding and Reclaiming the State after Crisis”, Development and Change, Vol.43, No.1, pp.1-21; Charman, Karen (2008), “Ecuador First to Grant Nature Constitutional Rights”, Capitalism Nature Socialism, Vol.19, No.4, 131-133; Gallegos, Franklin Ramìrez (Translated by Krystina Horko) (2018), “Ecuador Veers to Neoliberalism”, Le Monde Diplomatique (English edition), December, 7; Mariette, Maëlle (Translated by George Miller) (2018), “In the Name of the Mother”, Le Monde Diplomatique (English edition), April, 14-15. ↩︎