THE SHIELD OF ACHILLES (44 page)

The State has proved itself to be a remarkably resilient institution, periodically transforming its structure. When faced with mortal threats, states have resorted to the expedient of constitutional change, remaking themselves when strategic innovations by their competitors threatened to overwhelm them or when internal stresses enlivened by these strategic developments threatened disintegration from within. In our own era we are witnessing the emergence of the
market-state
and the shift to that form from the constitutional order of the nation-state that has dominated the twentieth century. The strategic innovations by which the Long War was won have forced each of the great northern-tier powers to adapt. Some—like the states of former Nazi Germany and the former Soviet Union—have adapted so profoundly that we might say that constitutionally they were obliterated, to be replaced by different kinds of states.

The market-state is a constitutional adaptation to the end of the Long War and to the revolutions in computation, communications, and weapons of mass destruction that brought about that end. As the Long War made abundantly clear, the conception and production of the most qualitatively
superior forces required not merely an industrial society but a creative society, with the capital to exploit that creativity. Now that creativity and capital has been turned against the nation-state itself.

What are the characteristics of the market-state? Such a state depends on the international capital markets and, to a lesser degree, on the modern multinational business network to create stability in the world economy, in preference to management by national or transnational political bodies. Its political institutions are less representative (though in some ways more democratic) than those of the nation-state. The Open Markets Committee of the Federal Reserve and the electronic referendum (to take two extremes) are more characteristic of the market-state than the elegant electoral representative institutions envisioned by Hamilton and Madison or the mass election campaigns of Roosevelt and Johnson. Like the nation-state, the market-state assesses its economic success or failure by its society's ability to secure more and better goods and services, but in contrast to the nation-state it does not see the State as more than a minimal provider or redistributor. Whereas the nation-state justified itself as an instrument to serve the welfare of the people (the nation), the market-state exists to maximize the opportunities enjoyed by all members of society. For the nation-state, a national currency is a medium of exchange; for the market-state it is only one more commodity. Much the same may be said of jobs: for the nation-state, full employment is an important and often paramount goal,
²³
whereas for the market-state, the actual number of persons employed is but one more variable in the production of economic opportunity and has no overriding intrinsic significance. If it is more efficient to have large bodies of persons unemployed, because it would cost more to the society to train them and put them to work at tasks for which the market has little demand, then the society will simply have to accept large unemployment figures. Mark Tushnet has noted this development:

If the function of law in the nation-state is process-oriented, churning out impartial rules and regulations to promote desired behavior, the market-state pursues its objectives by incentive structures and sometimes draconian penalties, not so much to assure that the right thing is done as to prevent the social instability that threatens material well-being. The
market-state is classless and indifferent to race and ethnicity and gender; its yardstick for evaluation is the quantifiable. Indeed, to a far greater extent than the nation-state, the market-state is culturally accessible to all societies: the statistics and media images that carry its messages do not require proficiency in any particular natural language.

If the nation-state was characterized by the rule of law—and as we shall see in Book II, the society of nation-states attempted to impose something like the rule of law on international behavior—the market-state is largely indifferent to the norms of justice, or for that matter to any particular set of moral values so long as law does not act as an impediment to economic competition. The cliché “level playing field” captures this concern. Does this agnosticism make the market-state an ideal form for the varying states of the world, including the diverse Third World, where values differ greatly from those of the developed world and from each other, or is it ill-suited to states, like Iran or Saudi Arabia, that wish the State to embody the cultural values of the people (that do not want a “level playing field” for all competitors) ? In either case, the market-state's essential indifference to culture poses some difficulties for the operation of the State. Fore-most among these is the fact that it will be much harder to get the publics of such states to risk their lives and fortunes on behalf of a state that is no longer the champion of their cultural values. The sense of a single polity, held together by adherence to fundamental values, is not a sense that is cultivated by the market-state. This cultural indifference does, however, make the market-state an ideal environment for multiculturalism.

Operating through the state-nation, the State sought to enhance the nation as a whole. In the era of the nation-state, the State took responsibility for the well-being of groups. In the market-state, the State is responsible for maximizing the choices available to individuals. This means lowering the transaction costs of choosing by individuals and that often means restraining rather than empowering governments. Thus we see measures like the proposal to limit the percentage of GDP taken by government, and other forms of capping the tax rate, and actions by courts that have struck down affirmative action plans
²⁵
or limited the federal power to regulate commerce and disallowed certain criminal sanctions (like those against contraception or abortion).
²⁶

In the market-state, the marketplace becomes the economic arena, replacing the factory. In the marketplace, men and women are consumers, not producers (who are probably offshore anyway).

Some entrepreneurs will fail; all consumers will find their options limited, to varying degrees, by their resources. But both failure and limitation are necessary to choosing; there can be no real choices without the possibility of getting it wrong, and indeed choice itself is a consequence of scarcity.

Is governance easier in the market-state, because so much less is demanded of it, or more difficult because the habits of the good citizen are lost? Perhaps both. As is frequently pointed out, contemporary political reporting is not presented against an historical background of complex competing values, but increasingly in terms of the power relationships of the personalities involved, as if politics were like a simple sporting event—who's winning and who's losing, or, as shown by the little arrows in a popular news magazine, who's up and who's down. This is characteristic of the market-state, with its de-emphasis on the programmatic and legalistic aspects of governance.

And is this not what politics is—not simply how it is reported—in the market-state? When the publics of nation-states, to say nothing of their leading individuals, believed wholeheartedly in the mere materiality of their history—that they were in the grip of vast causal forces, economic, psychological, sociological, over which they had no control—then politics for the public, like ethics for the individual, became mainly a matter of protecting the interest of the group within which one found oneself. When the publics of market-states come to believe that their histories are chosen, a matter of interpretation, deconstruction, and sometimes cosmetic reconstruction, then politics, again like ethics, becomes a matter of insurance—quantifiable and probabilistic. On the other hand, a meritocracy where no one can remember what the moral bases for merit were, but where it can be measured and ruthlessly assessed nonetheless, promises a competitive dynamism that few nation-states could match today.

Recent movements in American jurisprudence—law and economics, feminism, critical legal studies—all agree on this first principle: power is the basis for legal decisions. Whatever the intellectual merits of such movements, a society that is strongly influenced by them is going to have a hard time finding nurses or teachers or soldiers without devoting vastly more financial resources to their recruitment and retention. And yet the diversion of more resources to the human services sector by the State is far
less
likely in a society that values entrepreneurial, material success above all. “The market is not a good setting for mutual assistance, for I cannot help someone else without reducing (for the short term at least) my own
options.”
²⁸
On the other hand, teamwork and harmony are far better indicators of an organization's long-term prospects for success than many other indices, and so such a society may well excel at encouraging those institutions that are best able to motivate persons to cooperate.

Long before the time of princes, long before there were states, “everywhere was an America,” John Locke wrote. By this he meant a world entirely free of any civilized institutions, as he believed America to have been when Columbus discovered it for European society, a world, that is, of opportunity, a world to be made. Perhaps we now stand at a similar moment of discovery.

The market-state is, above all, a mechanism for enhancing opportunity, for creating something—
possibilities
²⁹
—commensurate with our imaginations. The rocket technology developed to deliver weapons in the Long War has propelled man into a perspective from space; his communications technology, also developed for strategic reasons, has sent back an image from that perspective.
³⁰
I am inclined to think that something of the market-state's indifference to fate and sensitivity to risk is related to this reorientation, where the illusion of limitless opportunity meets the reality of choice.

Similarly, the decoding of human genetic material will change the way we look at excellence and achievement. We are inclined to forget that the doctrine of the divine right of kings rested on an admiration amounting to awe for the fatalistic assumption of chance; it was discredited when Enlightenment thinkers shifted the basis for the evaluation of that doctrine from one of the grateful acceptance of divine providence (for who could know better than God who should rule), which is actually confirmed by the apparent randomness of inherited merit, to a more self-confident, huma-istically centered basis in the rational assessment of ability. We are at present undergoing a similar shift as the basis for human assessment in the various competitions of the meritocracy shifts from a passive acceptance of inherited abilities to a quest for the enhanced, or engineered, faculties made possible by molecular biology. Here, too, the market-state's apparent indifference to the state's role in ensuring justice fits the new, wide open landscape of apparent opportunity. A State that tried to sort out who should be allowed to grow taller or be endowed with perfect pitch would soon find itself hopelessly overcommitted financially or the center of group warfare; in other words, it would find itself in the situation of the nation-state at present. The market-state, with its sublime indifference to such questions and its refusal to guarantee outcomes, is more survivable in the new world of genetic technologies. These technologies have the power to enhance autonomy as never before, freeing men and women from their own genes, and providing choices only dreamt of until now.

In each of the phase transitions that we observed in the history of the modern state, a new form of strategic vision emerged to accompany the new constitutional order. As the State moved to state-nation from territorial state, for example, arguments derived from the premises of collective security arose to accompany those arguments that derived from the balance of power that, in a previous transition, had emerged to dominate other, earlier strategic arrangements. In this way, states added to the array of available strategic programs, as earlier strategic visions were replaced and decayed into mere policies.

What strategic motto will dominate this transition from nation-state to market-state? If the slogan that animated the liberal, parliamentary nation-states was to “make the world safe for democracy” (the security paradigm that decayed into the policy of democratic enlargement, among others), what will the forthcoming motto be? Perhaps “making the world available,” which is to say creating new worlds of choice and protecting the autonomy of persons to choose.

Universalizing opportunity, however, does not mean making every state rich; nor does it even mean making sure no state becomes poorer. Rather, it means the opening up of opportunities on the largest scale possible in the expectation that this will maximize the growth of wealth generally. It may require that every state refrain from steps that would make any other state poorer to a degree greater than the gain in enrichment taken as a whole, but this is not as onerous as it may at first appear. For example, the state that develops a substitute for oil may well make another state, one that produces oil, poorer. But the gain in the total enrichment of the global environment is greater than the loss, because there are now two sources of energy supplies where before there was only one. A state need not be required to subsidize the growth of other states—as perhaps the oil-producing states once did when oil prices were artificially low—even if a rise in prices may harm some states while benefiting others, and even if the total balance sheet of world wealth is static, i.e., only a transfer of wealth is accomplished, one without net growth to the world taken as a whole. For in this case, the state that became poorer is not poorer than it would have been had the subsidy never occurred. Some states are going to be poorer in a world of market-states, but they need not be poorer than they would have been absent the emergence of the market-state; indeed, within the world of nation-states, the poorest states are already getting poorer.