Policy Sciences 15 (1983) 225-246 225
Elsevier Scientific Publishing Company, Amsterdam Printed in The Netherlands
Competitive Party Democracy and
the Keynesian Welfare State:
Factors of Stability
and Disorganization*
CLAUS OFFE
Department of Sociology, Universio' of Bielefeld, Postfach 8640, D-4800 Bielefeld l, F.R.G.
ABSTRACT
This article addresses the question of what makes democratic political organization and capitalist economic
organization mutually compatible on the macro-sociological level, and what has, more specifically, led to
the absence of manifest tension between those two organizing principles in the post-World War il era in
Western Europe. A hypothetical answer is provided, namely that the organization of mass participation
through a competitive party system makes democracy safe for capitalism and that Keynesianism and the
welfare state makes capitalism safe for democracy. The question of the extent to which one can expect the
continuity of those arrangements under the conditions of political and economic crisis is then explored on a
theoretical level. As a skeptical answer to this question, a number of factors are systematically discussed
which seem to subvert both party competition as the dominant mode of mass participation and welfareKeynesianism
as the prevalent mode of economic policy.
I. Introduction
If we compare 19th century liberal political theory on the one side and classical
Marxism on the other, we see that there is one major point of agreement of the two.
Both Marx and his liberal contemporaries, such as J.S. Mill or de Tocqueville, are
* Paper presented at the Xllth World Congress of the International Political Science Association, Rio de
Janeiro, August 1982; the present version went through a number of earlier stages, each of which has
cumulatively benefited from the critique and helpful suggestions from colleagues in Brisbane/Australia,
Italy, and the United States. The author wants to express special thanks to David Abraham, Princeton
University, not only for making helpful criticisms, but also for helping in editing the original text.
0032-2687/83 / $03.00 9 1983 Elsevier Science Publishers B.V.
226
convinced that, in their contemporary societies, capitalism and full democracy (based
on equal and universal suffrage) do not mix. Obviously, this analytical convergence
was arrived at from diametrically opposed points of view: the classical liberal writers
believed that freedom and liberty were the most valuable accomplishments of societal
development which deserved to be protected, under all circumstances, from the
egalitarian threats of mass society and democratic mass politics, which, in their view,
would lead, by necessity, to tyranny and "class legislation" by the propertyless as well
as uneducated majority [I ]. Marx, on the other side, analyzed the French democratic
constitution of 1848 as a political form that would exacerbate societal contradictions
by withdrawing political guarantees from the holder of sQcial power while giving
political power to subordinate classes; consequently, he argued, democratic conditions
could bring the proletarian class to victory and put into question the foundations
of bourgeois society [2].
From the 20th century experience of capitalist societies, there is a lot of evidence
against this 19th century hypothesis concerning the incompatibility of mass democracy
(defined as universal and equal suffrage plus parliamentary or presidential form
of government) and bourgeois freedom (defined as production based on private
property and "free" wage labor). The coexistence of the two is known as liberal
democracy. To be sure, the emergence of fascist regimes in some of the core capitalist
countries testifies to the continued existence of tensions and contradictions that
prevail between the two models of economic organization and political organization,
and to the possibility of the outbreak of such tensions under the impact of economic
crises. But it is also true that most advanced capitalist countries have also been liberal
democratic states throughout most of the 20th century and that "all major advanced
bourgeois states are today democracies" [3]. In view of this evidence and experience,
ours is in some way aproblematique that is the reverse of what the classical writers of
both liberalism and Marxism concerned themselves with. While theyprognosticized
the incompatibility, we have to explain the coexistence of the two partial principles of
societal organization. More precisely, we want to know (a) which institutional arrangements
and mechanisms can be held responsible for the pattern ofcoexistence that
proved to be solid beyond all 19th century expectations and (b) what, if any, the limits
of such arrangements are. These limits, or failures of the working~of mediating
mechanisms, would be defined analytically as those points at which either capitalist
societies turn non-democratic or democratic regimes turn non-capitalist. It is these
two questions with which I will be concerned in this article. To put it schematically, the
course of the argument starts from the problem of how we explain the compatibility
[4] of the structural components of "mass polity" and "market economy," and then
goes on to focus, on the level of each of these two structures, on the factors contributing
to as well as those putting into question such compatibility. This is done in the
sequence of boxes (1)-(4) of the following schema:
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Factors maintainingstability Factors paralyzing stability
Mode of democratic mass participation (1) (2)
Mode of economic steering (KWS) (3) (4)
To pose this questions at all is to presuppose, in accordance with both Marx and
Mill, that there is some real tension between the two respective organizing principles of
social power and political power, market society and political democracy, a tension
that must be (and possibly cannot indefinitely be) bridged, mediated and stabilized.
This is by no means an undisputed assumption. For instance, Lenin and the Leninist
tradition deny that there is such tension. They assume, instead, that there is a
prestabilized harmony of the rule of capital and bourgeois democratic forms, the latter
mainly serving as a means of deception of the masses. Consequently, it does not make
sense whatsoever to ask the question of what makes democracy compatible with
capitalism and what the limits of such compatibility might be, because democracy is
simply seen to be the most effective and reliable arrangement of capitalist class
dominance. "What is central to Lenin's position is the claim that the very organizational
form of the parliamentary democratic state is essentially inimical to the interests
of the working class," as one recent commentator has succinctly stated [5]. Plausible
and convincing as this view can be taken to be if based on the constitutional practise of
Russia between 1905 and 1917, its generalization to the present would have, among
other and still worse political consequences, the effect of grossly distorting and
obscuring the very problematique which we want to discuss [6].
The reciprocal distortion is the one promulgated by some ideologists of pluralistelitist
democratic theory. They claim (or, more precisely, they used to claim in the
fifties and early sixties) that the tension between the principles governing capitalist
market society and political democratic forms had finally been eliminated in the
American political system. According to this doctrine, the class struggle on the level of
bourgeois society has been replaced by what Lipset calls "the democratic class struggle"
which is seen to make all social arrangements, including the mode of production
and the distribution of economic resources, contingent upon the outcomes of democratic
mass politics. The underlying logic of this analysis can be summarized in an
argument like this: "If people actually wanted things to be different, they simply would
elect someone other into office. The fact that they don't, consequently, is proof that
people are satisfied with the sociozpolitical order as it exists." Hence, we get something
like the inverse of the Leninist doctrine: democracy is not tied to capitalism, but
capitalism to democracy. Both of these perspectives deny major tensions or incompatibilities
between mass democracy and the market economy.
Thus, both the Leninist and the pluralist-elitist conceptions of democracy are
missing the point that interests us here. The one dogmatically postulates total dependence
of democratic forms and procedures upon class power, while the other equally
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dogmatically postulates total independence of class and democratically constituted
political power. The question that is at the same time more modest and more promising
in leading to insights of both intellectual and practical significance is, however,
this: which institutions and mechanism regulate the extent to which the two can
become incongruent in a given society, and what are the limits of such potential
incongruity, - limits, that is, which would constrain the range of potential variance of
class power and democratically constituted political authority?
Marketization of Politics and Politicization of the Private Economy
In what follows, I will argue that the continued compatibility of capitalism and
democracy that was so inconceivable to both classical liberalism and classical Marxism
(including Kautsky and the Second International) has historically emerged due to
the appearance and gradual developments of two mediating principles, (a) political
mass parties and party competition and (b) the Keynesian welfare state (KWS). In
other words, it is a specific version of democracy, political equality and mass participation
that is compatible with the capitalist market economy. And, correspondingly, it is
a specific type of capitalism that is able to coexist with democracy. What interests us
here are those specificities of the political and economic structures, the way in which
their mutual "fit" is to be explained by the functions each of them performs, and
furthermore the strains and tensions that affect those conditions of "fit."
Historically, each of those two structural components of "democratic capitalism"
has largely taken shape in Europe either during or in the aftermath of the two World
Wars; democracy through party competition after World War I and the Keynesian
welfare state after World War I1. Each of these two principles follow a pattern of
"mixing" the logic of authority and the logic of the market, of "voice" and "exit" in
Hirschman's terminology. This is quite obvious in the case of the Keynesian welfare
state for which the term "mixed economy" is often used as a synonym. But it is no less
true for the political sphere of capitalist society which could well be described as a
"mixed polity" and the dynamics of which are often, and to a certain extent appropriately,
described as the "oligopolistic competition" of political elites or political
"entrepreneurs" providing public "goods" [7]. The logic of capitalist democracy is one
of mutual contamination: authority is infused into the economy by global demand
management, transfers and regulations so that it loses more and more of its spontaneous
and self-regulatory character; and market contingency is introduced into the state,
thus compromising any notion of absolute authority or the absolute good. Neither the
Smithean conception of the market nor the Rousseauan conception of politics have
much of a counterpart in social reality. Thus, one of the ways in which compatibility is
accomplished appears to be the infusion of some of the logic of one realm into the
other, i.e., the notion of "competition" into politics and the idea of "authoritative
allocation of values" into the economy.
Let us now consider each of the two links, or mediating mechanisms, between state
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and civil society in turn. Following the problematique developed before, we will ask
two questions in each case. First, in what way and by virtue of which structural
characteristics do political parties and the Keynesian welfare state contribute to the
compatibility of capitalism and democratic mass politics. Second, which observable
trends and changes occur within the institutional framework of both the "mixed
economy" and the "mixed pol!ty" that threaten the viability of the coexistence of
capitalism and democracy?
II. Stabilization through Competitive Party Democracy
The widespread fear of the German bourgeoisie during the first decade of this century
was that once the full and equal franchise was introduced together with parliamentary
government, the class power of the working class would, due to the numerical strength
of this class, directly translate into a revolutionary transformation of the state. It was
the same analysis, of course, that inspired the hopes and the political strategies of the
leaders of the Second International. Max Weber had nothing but sarcastic contempt
for both these neurotic anxieties and naive hopes. He was (together with Rosa
Luxemburg and Robert Michels who conducted the same analysis with their own
specific accents) among the first social theorists who understood (and welcomed) the
fact that the transformation of class politics into competitive party politics implies not
only a change of form, but a decisive change of content. In 1917, he stated that
"amongst us, organizations like the trade unions, but also like the social democratic
party, are a very important counterweight against the typically real and irrational
power of street mobs in purely plebiscitary nations" [8]. He expected that the bureaucratized
political party together with the charismatic and demagogic political leader at
its top would form a reliable bulwark to contain what he described as "blind mass
rage" or "syndicalist insurrectionary tendencies."
Rosa Luxemburg's account of the dynamic of political mass organization differs
only in its inverse evaluative perspective, not its analytical content. In 1906, she
observed the tendency of working class organizations (i.e., unions and the party) to
follow specialized strategies according to a tacit division of labor and of the organizations'
leadership to dominate rather than serve the masses of the constituency. The
tendency of the organizations' bureaucratic staff consists, according to Luxemburg, in
a "great trend of rendering itself independent", "of specializing their methods of
struggle and professional activity", "of overestimating the organization which becomes
transformed into an end in itself and the highest good", "a need for rest", "a
loss of general view of the overall situation," while at the same time "the mass of
comrades are being degraded into a mass which is incapable offorming ajudgment" [9].
Biographically, politically and intellectually, Robert Michels absorbs and integrates
the ideas of both Luxemburg and Weber by formulating, in 1911, his famous "iron law
of oligarchy" in which the observation of empirical tendencies of organizations is
transformed in the proclamation of an inexorable historical necessity [10].
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It is probably not too much to say that the 20th century theory of political
organization has been formed on the basis of the experience and the theoretical
interpretation of these three authors who, interestingly enough, arrived at widely
divergent political positions at the end of their lives: Luxemburg died in 1919 as a
revolutionary democratic socialist and victim of police murder, Weber in the same
year as a"liberal in despair," and Michels in 1936as an ardent admirer and ideological
defender of Mussolini and Italian fascism. In spite of the extreme diversity of their
political views and positions, there is a strong common element in their analysis. This
element can be summarized in the following way: as soon as'political mass participation
is organized through large scale bureaucratic organization (a type of organization,
that is, which is presupposed and required by the model of electoral party
competition and institutionalized collective bargaining), the very dynamic of this
organizationalform contains, perverts, and obstructs class interest and class politics in
ways that are described as leading to opportunism (Luxemburg), oligarchy(Michels)
and the inescapable plebiscitarian submission of the masses to the irrational impulses
of the charismatic leader and his demagogic use of the bureaucratic party "machine"
(Weber).
According to the common insight underlyingthis analysis, as soon as the will of the
people is expressed through the instrumentality of the competitive party striving for
government office, what is expressed ceases to be the will of the people and is instead
transformed into an artefact of the form itselfand the dynamics put into motion by the
imperatives of political competition.
More specifically, these dynamics have three major effects. First, the deradicalization
of the ideology of the party: to be successful in elections and in its striving for
government office, the party must orient its programmatic stance towards the expediencies
of the political market [11]. This means two things: first, to maximizevotes by
appealing to the greatest possible number of voters and consequently to minimize
those programmatic elements that could create antagonistic cleavages within the
electorate. Second, vis-a-vis other parties, to be prepared to enter coalitions and to
restrict the range of substantive policy proposals to those demands which can be
expected to be negotiable to potential coalition partners. The combined effectof these
two considerations is to dissolve any coherent political concept or aim into a"gradualist"
temporal structure or sequence, giving priority to what can be implemented at any
given point in time and with the presently available resources, while postponing and
displacing presently unrealistic and pragmatically unfeasible demands and projects.
Also, the fullydeveloped competitive party is forced by the imperatives ofcompetition
to equip itself with a highly bureaucratized and centralized organizational structure.
The objective ofthis organization is to be present continuouslyon the political market,
just as the success of a business firm depends in part upon the size and continued
presence of its marketing and sales organization. The bureaucratic organization of the
modern political party performs the tasks of (a) collecting material and human
resources (membership dues, other contributions and donations, members, candi-
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dates), (b) disseminating propaganda and information concerning the party's position
on a great number of diverse political issues and (c) exploring the political market,
identifying new issues and monitoring public opinion and (d) managing internal
conflict. All of these activities are normally executed by a professional staff of party
officials who develop a corporate interest in the growth and stability of the apparatus
that provides them with status and careers. This pattern of internal bureaucratization
that can be found in parties of the right and the left alike, has two important traits.
First, the social composition (as measured by class background, formal education,
sex, occupation, age, etc.) of the party leadership, its officials, members of parliament,
and government becomes more and more at variance both with the social composition
of the population in general and the party's electoral base in particular. And second,
the professionalization of party politics leads to the political dominance of professional
and managerial party personnel who typically come, by their training and professional
experience, from such backgrounds as business administration, public administration,
education, the media, or interest organizations.
A second major consequence of this bureaucratic-professional pattern of political
organization is the deactivation of ordinary members. The more the organization is
geared toward the exploration of and adaptation to the external environment of the
political market in what can be described as a virtually permanent electoral campaign,
the less room remains for the determination of party policies by internal processes of
democratic debate and conflict within the organization. The appearance of internal
unanimity and consensus is what any competitive party must try to cultivate in order
to become or remain attractive to voters, as a consequence of which internal division,
factionalism and organized conflict of opinion and strategy are not only not encouraged,
but rather kept under tight control or at least kept out of sight of the public in a
constant effort to streamline the party's image and, as it were, to standardize its
product. (It is tempting to compare, in this respect, the practise of some social
democratic parties to the theory of the Leninist party, and I suspect we would find
some ironic similarities.) The highly unequal importance of external and internal
environments frequently becomes evident when the results of public opinion surveys,
which today are routinely commissioned by the party leadership, suggest positions
and strategies which are in conflict with declared intentions of party members who
then, in the interest of"winning the next elections," are called upon to yield to political
"reality."
The third characteristic of what Kirchheimer has called the modern"catch-all-party"
is the increasing structural and cultural heterogeneity of its supporters. This
heterogeneity results from the fact that the modern political party relies on the
principle of"product diversification" in the sense that it tries to appeal to a multitude
of diverse demands and concerns. This is most obvious in the case of social democratic
and communist parties who have often successfully tried to expand their base beyond
the working class and to attract elements of the old and new middle classes, the
intelligentsia and voters with strong religious affiliations. The advantage of this
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strategy is quite obvious, but so is its effect of dissolving a sense of collective identity
which, in the early states of both socialist and Catholic parties, was based on a cultural
milieu of shared values and meaning.
It is easy to see why and how the three consequences of the organizational form of
the competitive political party that I have discussed so far - ideological deradicalization,
deactivation of members, erosion of collective identity - contribute to the
compatibility of capitalism and democracy. Each of these three outcomes helps to
contain and limit the range of political aims and struggles, and thus provides a virtual
guarantee that the structure of political power will not deviate so far from the structure
of socio-economic power as to make the two distributions of power incompatible with
each other. "The party system has been the means of reconciling universal equal
franchise with the maintenance of an unequal society," McPherson has remarked [12].
The inherent dynamic of the party as an organizational form which develops under
and for political competition generates those constraints and imposes those "non-decisions"
upon the political process which together make democracy safe for capitalism.
Such "non-decisions" affect both the content of politics (i.e., what kinds of issues,
claims, and demands are allowed to be put on the agenda) as well as the means by
which political conflicts are carried out. The constraints imposed upon the possible
content of politics are all the more effective since they are non-explicit, i.e., not based
on formal mechanisms of exclusion (such as limitations of voting rights, or authoritarian
bans on certain actors or issues), but rather constituted as artelacts and byproducts
of the organizational forms of universal political inclusion. This conclusion,
of course, is strongly supported by the fact that no competitive party system so far has
ever resulted in a distribution of political power that would have been able to alter the
logic of capital and the pattern of socio-economic power it generates.
To avoid misunderstanding, I should emphasize that what I intend here is not a
normative critique of the organizational form of the political party which would lead
to the suggestion of an alternative form of political organization. Rather than speculating
about the comparative desirability of anarchist, syndicalist, council-democratic,
or Leninist models of either non-party or non-competitive party organization, let us
now look at the future viability of this organizational form itself - its potential to
construct and mediate, as it did in the post-war era, a type of political authority that
does not interfere with the institutional premises of the capitalist economy. The
question is, in other words, whether the institutional link that in most advanced
capitalist countries has allowed capitalism and political democracy to coexist for most
of the last 60 years is likely to continue to do so in the future. How solid and viable are
the organizational forms that bring the"iron law" to bear upon the process of politics?
One way to answer this question in the negative would be to expect political parties
to emerge which would be capable of abolishing the above-mentioned restrictions and
constraints, thus leading to a challenge of class power through politically constituted
power. I do not think that there are, in spite of Eurocommunist doctrines and
strategies that have emerged in the Latin-European countries in the mid-seventies, and
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in spite of the recently elected socialist/communist government in France, many
promising indicators of such a development. The other possibility would be a disintegration
of thepolitiealparty as the dominantform ofdemocratic massparticipation and
its gradual replacement by other forms which possibly are less likely than party
competition to lead to "congruent" uses of state power. As we are concerned with the
prospects of competitive party democracy in the eighties, it might be worthwhile to
explore this possibility a little further.
Causes of the Decline of the Party System as the Dominant Form of Mass Participation
It is well possible today to argue that the form of mass participation in politics that is
channeled through the party system (i.e., according to the principles of territorial
representation, party competition and parliamentary representation) has exhausted
much of its usefulness for reconciling capitalism and mass politics. This appears to be
so because the political form of the party is increasingly bypassed and displaced by
other practices and procedures of political participation and representation. It is
highly doubtful, however, whether those new and additional practices that can be
observed in operation in quite a number of capitalist states will exhibit the same
potential of reconciling political legitimation with the imperatives of capital accumulation
that has been, at least for a certain period, the accomplishment of the competitive
party system. Again, three points - referring in an highly schematic fashion to new
social movements, corporatism and repression as phenomena - tend to bypass,
restrict, and subvert the party system and its political practices and their reconciling
potential.
First, in many capitalist countries, the new social movements which have emerged
during the seventies are, for a number of reasons, very hard to absorb into the
practices of competitive party politics. Such movements include ethnic and regionalist
movements, various urban movements, ecological movements, feminist movements,
peace movements, and youth movements. To a large extent, all of them share two
characteristics. First, their projects and demands are based not on a collective contractual
position on either goods or labor markets, as was the case, for instance, with
traditional class parties and movements. Instead, their common denominator of
organization and action is some sense of collective identity (often underlined by
ascriptive and "naturalistic" conceptions of the collective "self" in terms of age,t
gender, "nation" or"mankind"). Closely connected with this is a second characteristic:
they do not demand representation (by which their market status could be improved
or protected) but, autonomy. In short, the underlying logic of these movements is the
struggle for the defense of a physical and / or moral"territory," the integrity of which is
fundamentally non-negotiable to the activists of these movements. For the purpose of
this defense, political representation and parliamentary politics are often considered
unnecessary (because what is requested of the state, as can be illustrated in the issues of
abortion or nuclear energy, is not to "do something" but to "stay out"), or even
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dangerous, because the state is suspected of attempting to demobilize and disorganize
the movement. To the extent such movements attract the attention and the political
energies of people, not only individualpolitical parties, but the traditionalcompetitive
party system as a whole will lose in function and credibility because it simplydoes not
provide the arena within which such issues and concerns can possibly be processed.
These "new social movements" are not concerned with what is to be created or
accomplished through the use of politics and state power, but what should be saved
from and defended against the state, and the considerations governing the conduct of
public policy. The three most obvious cases of such movements, the peace movement,
the environmental movement and various movements centered on human rights (e.g.,
of women, of prisoners, of minorities, of tenants) all illustrate a "negative"conception
of politics trying to protect a sphere of life against the intervention of state (or
state-sanctioned) policy. What dominates the thought and action of these movements
is not a "progressive" utopia of what desirable social arrangements must be achieved,
but a conservative utopia of what non-negotiable essentials must not be threatened
and sacrificed in the name of "progress."
Second, many observers in a number of capitalist states have analyzed an ongoing
process of deparliamentarization of public policy and the concomitant displacement
of territorial forms of representation through functional ones. This is most evident in
"corporatist" arrangements which combine the function of interest representation of
collective actors with policy implementation vis-a-vis their respective constituencies
[13]. The functional superiority of such corporatist arrangements, compared to both
parliamentary-competitiveforms of representat!on and bureaucratic methods of implementation,
resides in their informal, inconspicuous, and non-public procedures
and the "voluntary" character of compliance that they are said to be able to mobilize.
Although the dynamics and limits of corporatist forms of public policymaking,
especially in the areas of economic and social policies, are not of interest to us here,
what seems to be clear is that there has been a trend toward such arrangements, most
of all in countries with strong social democratic parties (such as in Europe, Sweden,
the UK, Austria, and Germany) which has worked at the expense of parliament and
the competitive party system. A number of Marxist and non-Marxist political scientists
have even argued that "parliamentary representation on the basis of residence no
longer adequately reflects the pro.blems of economic management in a worldwide
capitalist system," and that "a system of functional representation is more suited to
securing the conditions of accumulation" [14].
Third, a constant alternative to free party competition is political repression and the
gradual transformation of democracy into some form of authoritarianism. In an
analytical sense, what we mean by repression is exclusion from representation. Citizens
are denied their civil liberties and freedoms, such as the right to organize,
demonstrate, and express certain opinions in speech and writing. They are denied
access to occupations in the public sector, and the like. The expansion of police
apparatuses and the practice of virtually universal monitoring and surveillance of the
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activities of citizens that we observe in many countries are indications of the growing
reliance of the state apparatus upon the means of preventive and corrective repression.
More importantly, in our context of discussing the limits of competitive party democracy,
is one other aspect of the exclusion from representation. It isthe de facto and/or
formal limitation of competitiveness within the party system: be it by strengthening of
intra-party discipline and the sanctions applied against dissenters; be it in the election
campaigns from which substantive alternatives concerning the conduct and programmatic
content of public policy often seem to be absent; be it finally on the level of
parliament and parliamentary government where the identity of individual (and only
nominally "competing") parties more and more often disappears behind what occasionally
is called the "great coalition of the enlightened," inspired by some vague
"solidarity of all democratic forces." Referring back to the economic methaphor used
before, such phenomena and developments could well be described as the "cartelization"
of political supply and the closure of market access.
IfI am correct in assuming that the displacement of the role and political function of
the competitive party system, as indicated by the emergence of new social movements,
increasing reliance on corporatist arrangements, and self-limitation of the competitiveness
of party systems is a real process that could be illustrated by many examples in
numerous advanced (and not so advanced) capitalist states; and ifI am also correct in
assuming that the organizationalform ofthe competitive political party plays a crucial
role in making democratic mass participation compatible with capitalism, then the
decline of the party system is likelyto lead to the rise of less constrained and regulated
practices of political participation and conflict, the outcomes of which may then have
the potential of effectivelychallenging and transcending the institutional premises of
the capitalist form of social and economic organization.
I have so far focused only on those limits of the "reconciling functions" of the
organizational forms of mass democracy which consists in the weakening and more or
less gradual displacement of the dominant .role of political parties as mediators
between the people and state power. But the picture remains incomplete and unbalanced
as long as we concentrate exclusivelyon cases in which the "channel" of political
participation that consists of party competition, elections and parliamentary representation
is bypassed (and reduced in its legitimacyand credibility) by the protest politics
of social movements or corporatist negotiations among powerful strategic actors, or
where this channel is altogether reduced in significanceby"repressive" mechanisms of
exclusion.
The other alternative, alluded to before, consists not in a process of displacement
and loss of relevance of the organizational form of political parties, but in the
successful strategy of "self-transcendence" of the party moving from "political" to
"economic" democracy. All models and strategies of economic democratization (beginning
in the mid-twenties in Austria and Germany and continuing through the
current Swedish concepts of wage earner funds and the Meidner plan [15]) rely on the
notion that the tension between the democratic principle of equal mass participation
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and the economic principle of unequal and private decisionmakingpower could be put
to use by instituting, by the means of electoral success and parliamentary legislation,
democratic bodies on the level of enterprises, sectors of industry, regions, cities, and so
on. The central assumption that inspires such strategies is that "democracy would
explode capitalism (and) that the democratic state, because it could be made to
represent the people, would compel entrepreneurs to proceed according to principles
inimical to their own survival... The working class, as the spokesmen for the great,
non-capitalist majority, would enforce the primacy of politics throughout the economy,
as well as in politics per se" [16].
Although this alternative course of suspending the compatibility of democracyand
capitalism is part of the programmatic objectives of almost all social democratic/socialist
(and, increasingly, communist) parties in Europe (and even of some forces in
North America), it has nowhere been carried out to the point where the private
character of decisions concerning the volume, kind, point in time and location of
investment decisions would have effectivelybeen transformed into a matter of democratic
control. In the early eighties, the European Left seems rather to be divided as to
the strategic alternatives of trying to overcome the constraints of political democracy
and its oligarchic organizational dynamics, either by supporting those "new social
movements" and engaging in their politics of autonomy and protest, or to stick to the
older model of economic democratization. Both tendencies, however, provide sufficient
reason to expect a weakening of these organizationaland politicalcharacteristics
which so far have made democratic mass participation safe for capitalism. The extent,
however, to which it becomes likely that competitive party democracy is either
displaced by social and political movements and corporatist arrangements or is
complemented by "economic democracy" will probably depend on the stability,
growth and prosperity the economy is able to provide. Let us, therefore, now turn to
the question of the organization of production and distribution and the changes that
have occurred since Andrew Shonfield's classic Modern Capitalism came out in 1965
[17].
II1. The Keynesian Welfare State and Its Demise
Let me now try to apply the analogous argument, in an even more generalized and
schematic fashion, to the second pillar upon which, according to my initial proposition,
the coexistence of capitalism and democracy rests, namelythe Keynesianwelfare
state (KWS). The bundle of state institutions and practices to which this concept
refers has been developed in western capitalism since the Second World War. Until the
decisive change of circumstances that occurred after the mid-seventies and that was
marked by OPEC price policies, the end of dbtente, and the coming to power of
Thatcher in the UK and Reagan in the US (to mention just a few indicators of this
change), the KWS has been adopted as the basic conception of the state and state
practice in almost all western countries, irrespective of parties in government, and with
237
only minor modifications and time lags. Most observers agree that its effect has been
(a) an unprecedented and extended economic boom favoring all advanced capitalist
economies and (b) the transformation of the pattern of industrial and class conflict in
ways that increasingly depart from political and even revolutionary radicalism and
lead to more economistic, distribution-centered and increasingly institutionalized
class conflict. Underlying this development (that constitutes a formidable change if
compared to the dynamics of the capitalist world system during the twenties and
thirties) is a politicallyinstituted class compromise or"accord" that Bowles has described
as follows:
[The accord] represented, on the part of labor, the acceptance of the logic of profitability and markets as
the guiding principles of resource allocation, international exchange, technological change, product
development, and industrial location, in return for an assurance that minimal living standards, trade
union rights, and liberal democratic rights would be protected, massive unemployment avoided, and
real incomes would rise approximately in line with labor productivity, all through the interventionof the
state, if necessary [18].
It is easy to see why and how the existence of this compact has contributed to the
compatibility of capitalism and democracy. First, by accepting the terms of the
accord, working class organizations (unions and political parties) reduced their
demands and projects to a program that sharply differs from anything on the
agenda of both the Third and the Second Internationals. After the physical, moral
and organizational devastations the Second World War had left behind, and after
the discredit the development of the Soviet Union had earned for communism, this
change of perspective is not entirely incomprehensible. Moreover, the accord itself
worked amazingly well, thus reinforcing a deeply depoliticized trust in what one
leading German Social Democrat much later came arrogantly to call the "German
Model" (ModellDeutschland)[19]: the mutual stimulation of economic growth
and peaceful class relations. What was at issue in class conflicts was no longer the
mode of production, but the volume of distribution, not control but growth, and
this type of conflict was particularly suited for being processed on the political
plane through party competition, because it does not involve "either/or" questions,
but questions of a "more or less" or "sooner or later" nature. Overarching this
limited type of conflict, there was a consensus concerning basic priorities, desirabilities
and values of the political economy, namely economic growth and social (as
well as military) security. This interclass, growth-security alliance does in fact have
a theoretical basis in Keynes' economic theory. As applied to practical purposes of
economic policymaking, it teaches each class to "take the role of the other." The
capitalist economy, this is the lesson to be learnt from Keynesianism, is a positivesum
game. Therefore, playing like one would in a zero-sum game is against one's
own interest. That is to say, each class has to take the interests of the other class into
consideration: the workers profitability, because only a sufficient level of profits
and investment will secure future employment and income increases; and the
238
capitalists wages and welfare state expenditures, because these will secure effdctive
demand and a healthy, well-trained, and well-housed working class.
The welfare state is defined as a set of legal entitlements providing citizens with
claims to transfer payments from compulsory social security schemes as well as to
state organized services (such as health and education) for a wide variety of defined
cases of need and contingencies. The means by which the welfare state intervenes
are thus bureaucratic rules and legal regulations, monetary transfers and professional
expertise of teachers, doctors, and social workers. Its ideological origins are
highly mixed and heterogeneous, ranging from socialist to Catholic-conservative
sources; its character of resulting from ideological, political and economic interclass
compromises is something the welfare state shares with the logic of Keynesian
economic policymaking. In both cases, there is no fast and easy answer to the
zero-sum question of who wins and who loses. For, although the primary function
of the welfare state is to cover those risks and uncertainties to which wage workers
and their families are exposed in capitalist society, there are some indirect effects
which serve the capitalist class, too.
This becomes evident if we look at what would be likely to happen in the absence
of welfare state arrangements in a capitalist society. We would probably agree that
the answer to this hypothetical question is this: first, there would be a much higher
level of industrial conflict and a stronger tendency among the proletariat to avoid
becoming wage workers. Thus, the welfare state can be said to partially dispell
motives and reasons for social conflict and to make the existence of wage labor
more acceptable by eliminating parts of the risk that result from the imposition of
the commodity form upon labor. [20] Second, this conflict would be much more
costly in economic terms by its disruption of the increasingly complex and capitalintensive
process of industrial production. Therefore, the welfare state performs the
crucial function of taking part of the needs of the working class out of the class
struggle and industrial conflict arenas, of providing the means to fulfill their needs
more collectively and hence more efficiently, of making production more regular
and predictable by relieving it of important issues and conflicts, and of providing, in
addition, a built-in stabilizer for the economy by partly uncoupling changes in
effective demand from changes in employment. So, as in the case of Keynesian
doctrines of economic policy, the welfare state, too, can be seen to provide a
measure of mutuality of interest between classes that virtually leaves no room for
fundamental issues and conflicts over the nature of the political economy.
The functional links between Keynesian economic policy, economic growth and
the welfare state are fairly obvious and agreed upon by all "partners" and parties
involved. An "active" economic policy stimulates and regularizes econemic
growth; the "tax dividend" resulting from that growth allows for the extension of
welfare state programs; at the same time, continued economic growth limits the
extent to which welfare state provisions (such as unemployment benefits) are
actually claimed. And the issues and conflicts that remain to be resolved within the
239
realm of formal politics (party competition and parliament) are of such a fragmented,
non-polarizing, and non-fundamental nature (at least in the areas of economic
and social policy) that they can be settled by the inconspicuous mechanisms of
marginal adjustments, compromise and coalition-building.
If all of this were still true, today's ubiquitous critiques and political attacks
directed at Keynesianism, the welfare state and, most of all, the combination of
these two most successful political innovations of the post-war era, would be
plainly incomprehensible. They are not. As in the case of competitive political
parties, these innovations and their healthy effects seem to have reached their limits
today. While the integrative functions of the party system have partly been
displaced by alternative and less institutionalized forms of political participation,
the Keynesian welfare state has come under attack by virtue of some of its less
desireable side effects and its failure to correct some of the ills of an economic
environment that has radically changed, compared to the conditions that prevailed
prior to the mid-seventies. Let us look at some of the reasons why there are very few
people remaining - be they in academia or politics, on the Left or the Right - who
believe that the Keynesian welfare state continues to be a viable peace formula for
democratic capitalism.
My thesis, in brief, is this: while the KWS is an excellent and uniquely effective
device to manage and control some socioeconomic and political problems of advanced
capitalist societies, it does not solve all those problems. And the problems that can be
successfully solved through the institutional means of the welfare state no longer
constitute the most dominant and pressing ones. Moreover, this shift of the socioeconomic
problernatique is in part an unintended consequence of the operation of the
KWS itself. The two types of problems to which I refer are the production/exploitation
problem and the effective demand/realization problem. Between the two, a
trade-off exists: the more effectively one of the two is solved, the more dominant and
pressing the other one becomes. The KWS has indeed been able to solve, to a
remarkable extent, the problem of macroeconomic demand stabilization. But, at the
same time, it has also interfered with the ability of the capitalist economy to adapt to
the production/exploitation problem as it has emerged ever more urgently since the
mid-seventies. The KWS, so to speak, has operated on the basis of the false theory that
the problems it is able to deal with are the only problems of the capitalist political
economy, or at least the permanently dominant ones. This erroneous confidence is
now in the politically and economically, equally painful process of being falsified and
corrected.
To the extent the demand problem is being solved, the supply problem becomes
wide open. The economic situation has changed in a way that lends strong support to
conservative and neo-laissez-faire economic theory. Far from stimulating production
any longer, the governmental practice of deficit spending to combat unemployment
contributes to even higher rates of unemployment, by driving up interest rates and
making money capital scarce and costly. Also (and possibly even worse), the welfare
240
state amounts to a partial disincentive to work. Its compulsory insurance schemes and
legal entitlements provide such a strong institutional protection to the material
interest of wage workers that labor becomes less prepared and/or can be less easily
forced to adjust to the contingencies of structural, technological, locational, vocational
and other changes of the economy. Not only wages are "sticky" and "downwardly
inflexible," but, in addition, the provisions of the welfare state have partly "decommodified"
the interests of workers, replacing"status" for"contract," or"citizen rights"
for "property rights." This change of industrial relations that the KWS has brought
about has not only helped to increase and stabilize effectivedemand (as it was intended
to), but it also has made employment more costly and more rigid. Again, the central
problem on the labor market is the supply problem, how to hire and fire the right
people at the right place with the right skills and, most important, the right motivation
and the right wage demand. Concerning this problem, the welfare state is justifiably
seen by business not to be part of the solution, but part of the problem.
As capital (small as well as big) has come to depend and rely on the stimulating and
regularizing effects of interventionist policies executed on both the demand and
supply sides, and as labor depends and relies on the welfare state, the parameters of
incentives, motivations, and expectations of investors and workers alike have been
affected in ways that alter and undermine the dynamics of economic growth. For
capital and labor alike, pressures to adjust to changing market forces have been
reduced due to the availability of state-provided resources that either help to avoid or
delay adaptation or due to the expectation that a large part of the costs of adaptation
must be subsidized by the state. Growth industries such as defense, civilian aircraft,
nuclear energy, and telecommunications typicallydepend as much on markets created
by the state (and often capital provided by the state) as stagnant industries (such as
steel, textiles, and, increasingly, electronics) depend on state protection and subsidized
market shelters. Economic growth, where it occurs at all, has become a matter of
political design rather than a matter of spontaneous market forces.
The increasing claims that are made on the state budget both by labor and capital,
and both by the growing and the stagnant sectors of the economy, cannot but lead to
unprecedented levels of public debt and to constant efforts of governments to terminate
or reduce welfare state programs. But economic growth does not only become
more costly in terms of budgetary inputs that are required to promote it, it also
becomes more costly in terms of political legitimation. The more economic growth
becomes "growth by political design," and the more it is perceived to be the result of
explicit political decisions and strategies of an increasingly "disaggregated" nature
(i.e., specified by product, industry, and location), the more governments and political
parties are held accountable for the physical quality of products, processes and
environmental effects resulting from such industrial policies. The widespread and
apparently increasing concern with the physical quality of products and production,
and the various "anti-productivist" and environmentalist political motives and demands
that are spreading in many capitalist countries have so far mostly been
241
interpreted in the social science literature either in objectivist terms ("environmental
disruption") or in subjectivist categories ("changing values and sensitivities"). In
addition, I suggest, these phenomena must be analyzed in terms of the apparent
political manageability of the physical shape and impact of industrial production and
growth, a perceived area of political decision- and non-decisionmaking that gives rise
to a new arena of"politics of production." The outcomes of the conflicts in this arena,
in turn, tend to cause additional impediments to industrial growth.
The strategic intention of Keynesian economic policy is to promote growth and full
employment, the strategic intention of the welfare state to protect those affected by the
risks and contingencies of industrial society and to create a measure of social equality.
The latter strategy becomes feasible only to the extent the first is successful, thus
providing the resources necessary for welfare policies and limiting the extent to which
claims are made on these resources.
The combined effect of the two strategies, however, has been high rates of unemployment
and inflation. At least, economic and social policies have not been able to
check the simultaneous occurrence of unemployment and inflation. But one can safely
say more than that. Plausible causal links between the KWS and today's condition of
"the worst of both worlds" are suggested not only by conservative economic policy
ideologues advocating a return to some type of monetarist steering of a pure market
economy. They are equally, if reluctantly, accepted by the practice and partly by the
theories of the Left. The relevant arguments are:
(1) The Keynesian welfare state is a victim of its success. By (partly) eliminating and
smoothening crises, it has inhibited the positive function that crises used to
perform in the capitalist process of "creative destruction."
(2) The Keynesian welfare state involves the unintended but undeniable consequence
of undermining both the incentives to invest and the incentives to work.
(3) There is no equilibrating mechanism or "stop-rule" that would allow us to adjust
the extension of social policy so as to eliminate its self-contradictory consequences;
the logic of democratic party competition and the social democratic alliance
with unions remains undisciplined by "economic reason."
While the latter argument is probably still exclusively to be found in the writings of
liberal-conservative authors [21], the other two can hardly be contested by the Left.
Let me quote just one example of an author who clearly thinks of himself as a social
democratic theoretician:
It is unfortunate that those wish to defend the welfare state.., spend their energies persuading the public
that the welfare state does not erode incentives, savings, authority or efficiency... What the Right has
recognized much better than the Left is that the principles of the welfare state are directly incompatible
with a capitalistic market system.... The welfare state eats the very hand that feeds it. The main
contradiction of the welfare state is the.., tension between the market and social policy [22].
242
It must not concern us here whether such blames and charges that today are ever more
frequently directed against the KWS are entirely "true," or, in addition, partly the
result of paranoic exaggerations or a conscious tactical misrepresentation of reality on
the part of capital and its political organizations. For what applies in this context is a
special version of a law known to sociologists as the "Thomas theorem": what is real in
the minds and perceptions of people will be real in its consequences. The structural
power position of the owners and managers and associational representatives of
capital in a capitalist society is exactly their power to define reality in a highly
consequential way, so that what is perceived as "real" by them is likely to have very real
impacts for other classes and political actors.
Without entering too far into the professional realm of the economist, let me suggest
two aspects of a potentially useful (if partial) interpretation of this change. One is the
idea that the Keynesian welfare state is a"victim of its success," as one author has put it
[23]: the side-effects of its successful practice of solving one type of macro-economic
problems have lead to the emergence of an entirely different problematique which is
beyond the steering capacity of the KWS. The familiar arguments that favor and
demand a shift of economic and social policymaking toward what has been named
"supply-side economics" are these: the nonproductive public sector has become an
intolerable burden upon the private sector, leading to a chronic shortage of investment
capital; the work ethic is in the process of being undermined, and the independent
middle class is being economically suffocated by high rates of taxation and inflation.
The other set of arguments maintains that, even in the absence of those economic
side effects, the political paradigm of the KWS presently is in the process of definitive
exhaustion due to inherent causes. The relevant arguments, in brief, are two. First,
state intervention works only as long as it is not expected by economic actors to be
applied as a matter of routine, and therefore does not enter their rational calculations.
As soon as this happens, however, investors will postpone investment because they can
be reasonably sure that the state, if only they wait long enough, will intervene by
special tax exemptions, depreciation allowances or demand measures. The spread of
such ("rational") expectations is fatal to Keynesianism, for to the extent it enters the
calculations of economic actors, their strategic behavior will increase the problem load
to which the state has to respond or at least will not contribute, in the way it had been
naively anticipated, to resolving the unemployment (and state budget) problem. This
pathology of expectations, of course, is itself known to (and expected by) actors in the
state apparatus. It forces them to react either by ever higher doses of intervention or,
failing that possibility for fiscal reasons, to give up the interventionist practice that
breeds those very problems that it was supposed' to solve. This would lead us to
conclude that state intervention is effective only to the extent it occurs as a "surprise"
and exception, rather than as a matter of routine.
A further inherent weakness of the KWS resides in the limits of the legal-bureaucratic,
monetarized and professional mode of intervention. These limits become
particularly clear in the areas of personal services, or "people processing organiza-
243
tions," such as schools, hospitals, universities, prisons and social work agencies.
Again, the mode of intervention generates the problems it is supposed to deal with.
The explanation of this paradox is well-known: the clients' capacity for self-help - and,
more generally, the system of knowledge and meaning generating such capacity - are
subverted by the mode of intervention, and the suppliers of such services, especially
professionals and higher level bureaucrats (who are in neo-conservative circles
referred to as the "new class"), take a material interest in the persistence (rather than
the solution) and in the continuous expansion and redefinition of the problems with
which they are supposed to deal [24].
Thus, for reasons that have to do both with its external economic effects and the
paradoxes of its internal model of operation, the KWS seems to have exhausted its
potential and viability to a large extent. Moreover, this exhaustion is unlikely to turn
out to be a conjunctural phenomenon that disappears with the next boom of economic
growth. For this boom itself is far from certain. Why is this so? First, because it cannot
be expected to occur as the spontaneous result of market forces and the dynamics of
technological innovation. Second, it apparently cannot be generated and manipulated
either by the traditional tools of Keynesianism nor by its "monetarist" counterpart.
Third, even to the extent it does occur either as an effect of spontaneous forces or state
intervention, the question is whether it will be considered desirable and worthwhile in
terms of the side-effects it inevitably will have for the "quality of life" in general and the
ecology in particular. This question of the desirability of continued economic growth
is also accentuated by what Fred Hirsch has called the"social limits to growth" and by
which he means the decreasing desirability and "satisficing potential" of industrial
output, the use-value of which declines in proportion to the number of people who
consume it.
IV. Conclusion
We have seen that the two institutional mechanisms on which the compatibility of the
private economy and political mass participation rests - namely the mechanism of
competitive party democracy and the paradigm of the Keynesian welfare state - have
come under stress and strain, the order of magnitude of which is unprecedented in the
post-war era. Limitations of space do not allow me to explore in any detail the
interactive and possibly mutually reinforcing dynamics that take place between the
two structural developments that I have sketched here.
One plausible hypothesis is that, as the political economy turns from a growth
economy into a "zero-sum society" [25], the institutional arrangements of conflict
resolution will suffer from strains and tensions. These tensions are probably best
described, using the conceptual paradigm of"organized capitalism" as a referent [26],
as threats of disorganization. Such threats are likely to occur on two levels: (a) on the
level of interorganizational"rules of the game" and (b) on the level of the organization
of collective actors. Under positive-sum conditions, it is not only a matter of legal
244
obligation or traditional mutual recognition, but of the evident self-interest of each
participant to stick to the established rules of interaction and negotiation. As long as
one participates, one can be at least sure not to lose, to receive future rewards for
present concessions, and to have one's claims respected as legitimate, since the process
of growth itself provides the resources necessary for such compensation. Stagnation,
and even more recession or expected no-growth conditions, destroy the basis for
cooperative relations among collective actors; confidence, mutual respect, and reciprocity
are put in question, and coalitions, alliances, and routinized networks of
cooperation tend to be seen as problematic and in need of revision by the organizational
elites involved. Crucial as these "social contracts" - i.e., subtle "quasi-constitutional"
relations of trust, loyalty, and recognition of the mutual spheres of interest and
competence are in a complex political economy [27] - the interorganizational relations
that are required for the management of economic growth tend to break down under
the impact of continued stagnation. This is illustrated by growing strains within party
coalitions, between unions and parties, employers' associations and governments,
states and federal governments, all ofwhich find the principle of"sich aufdie eigene
Kraft verlassen" (i.e., to engage in uncooperative strategies either because nothing
appears to be gained from sticking to the rules and/or because relevant others are anticipated
to do the same) increasingly attractive in a number of Western European
political systems, including the European Community itself.
The second type of disorganization that follows from stagnation has to do with
intraorganizational relations within collective actors such as trade unions, employers
associations, and parties. Such organizations depend on the assumption shared by
their members that gains achieved by collective action will be achieved at the expense
of third parties, not at the expense of groups of members and in favor of other groups
of members. As soon as this solidaristic expectation is frustrated, the representativeness
of the organization is rendered questionable, and "syndicalist,""corporativist" or
otherwise particularistic modes of collective action suggest themselves. The consequences
of this internal disorganization of collective actors include either increasing
"factionalism" of political and economic interests within the organization and/or a
shrinking of the social, temporal, and substantive range of representation the organization
is able to maintain [28]. The political and economic variants of the interclass
accord that have gradually developed in all advanced capitalist states since the First
World War and that have helped to make capitalism and democracy compatible with
each other are clearly disintegrating under the impact of these developments and
paradoxes.
Does that mean that we are back in a situation that supports the convergent views of
Marx and Mill concerning the antagonism of political mass participation and (economic)
freedom? Yes and no. Yes, because we have numerous reasons to expect an
increase of institutionally unmediated social and political conflict, the expression of
which is not channelled through parties or other devices of representation, and the
sources of which are no longer dried up by effective social and economic policies of the
state. But no, because there are strict limits to the analogy between the dynamics of
"late" and "early" capitalism. One important limit derives from the fact that the forces
245
involved in such conflicts are extremely heterogeneous, both concerning their causes
and socioeconomic composition. This pattern is remarkably different from a bipolar
"class conflict" situation which involves two highly inclusive collective actors who are
defined by the two sides of the labor market. But, in spite of this highly fragmented
nature of modern political conflict, its outcomes may well involve fundamental
changes of either the economic or the political sphere of society, changes that have, for
just a limited and short period of time, been inconceivable under the unchallenged
reign of competitive party democracy and the Keynesian welfare state.
Notes
1 For instance, J. S. Mill's argument on the necessary limits of the extension of equal voting rights as
developed in Ch. 8 of his Considerations of Representative Government. Oxford: Oxford Univ. Press.
2 This idea is stated in all three of Marx' major political writings on France, namely Die Klassenkiimpfe in
Frankreich yon 1848 1850 (1850), Der achtzehnte Brumaire des Louis Bonaparte (1852) und Der
Biirgerkrieg in Frankreich ( 1871).
3 G. Therborn (1977). "The rule of capital and the rise of democracy," New Left Review 103: 28.
4 This procedure is followed on the basis of the rather trivial, if not uncontroversial, idea that compatibility,
stability, continuity or "self-reproductiveness"of any social system is not sufficiently accounted for in
terms of its "inertia" or its presupposed "adaptive capacity," but can and must be explained as aproeess
of reproduction in which integrative tendencies outweigh those of change or disruption. Cf. C. S. Maier
(1981). "The two postwar eras and the conditions for stability in twentieth century Western Europe,"
The American Historical Review 86:327 352.
5 B. Hindess (1980). "Marxism and parliamentary democracy," in A. Hunt (ed.), Marxism and Democrat3',
London: Lawrence and Wishart.
6 Lenin writes in State and Revolution: "The democratic republic is the best possible political shell for
capitalism, and therefore capital, once in possession.., of this very best shell, establishes its power so
securely, so firmly, that no change of persons, of institutions, or of parties in the bourgeois democratic
republic can shake it." Having in mind the Leninist tradition of thinking of the state as a mere reflection
of socioeconomic power structures and the corresponding theorem of the eventual withering away of
the state after the revolution the Italian political theorist Norberto Bobbio has rightly asked the
question whether there is at all something like a "Marxist theory of the state" which would be
conceptually equipped to grasp the "specificity of the political." Cf. N. Bobbio's contributions to 11
Marxismo e lo Stato, Mondo Operaio Edizioni Avanti, Roma 1976; quoted after the German translation
Sozialisten, Kommunisten und der Staat, Hamburg: VSA (1977), pp. 15 61.
7 It is only on the basis of real assimilation of the practices of political parties to market behavior that the
"economic paradigm" in democratic theory (as formulated in the famous works of Schumpeter, Downs
and Olsen) could become so plausible and influential.
8 Max Weber (1958). Gesammelte politische Sehriften. Ttibingen: Mohr, p. 392.
9 R. Luxemburg(1924). Massenstreik, ParteiundGewerkschaften, Gesammelte Werke Vol. If, 163-165,
Berlin: Dietz.
10 Cf. R. M ichels (1925). Soziologie des Parteiwesens, Stuttgart: W. J. Mommsen (1981). "Max Weber and
Robert Michels," Arch. Eur. Soc. 22:100 116; D. Beetham (1977). "From socialism to fascism: the
relation between theory and practice in the work of Robert Michels," Political Studies, 25: 3-24,
161 181.
11 See the brilliant analysis of this problem by A. Przeworski (1980) "Social democracy as a historical
phenomenon," New Left Review 122.
12 C. V. M cPherson (1977). The Life and Times of Liberal Democracy. London: Oxford University Press,
p. 69.
13 The most ~omprehensive account of recent theorizing and discussion on"corporatism" is P. C. Schmitter
and G. Lehmbruch (eds.) (1979). Trends Toward Corporatist lntermediation, London: Sage.
246
14 B. Jessop (1980). "The transformation of the state in post-war Britain," in R. Scase (ed.) The State in
Westprn Europe. London: Croom Helm, on. 23 93.
15 Cf. for a detailed account of current Swedish debates on these plans and the debates surrounding them;
U. Himmelstrand et al. (1981). Beyond Welfare Capitalism? London: Heinemann, es!b. pp. 255-310.
16 D. Abraham (1982). "'Economic Democracy' as a Labor Alternative to the "Growth Strategy" in the
Weimar Republic." Unpublished manuscript, Princeton, 16 ft.
17 A. Shonfield (1965). Modern Capitalism: The Changing Balance of Public and Private Power. Lond on:
Oxford University Press.
18 S. Bowles (1981). "The Keynesian Welfare State and the Post-Keynesian Political Containment of the
Working Class." Unpublished manuscript, Paris, 12ft.
19 This slogan has since become a technical term, in comparative politics; c.f. A Markovits (ed.) (1982). The
Political Economy of West Germany. Modell Deutschland. New York: Praeger.
20 For a detailed formulation of this argument see G.Lenhardt, and C. Offe (1977). "Staatstheorie und
sozialpolitik - politisch-soziologische erkl~irungsans~itze ftir funktionen und innovationsprozesse der
sozialpolitik," in: C. v. Ferber/F. X. Kaufmann (Hrsg.) Sonderheft 19, der KOlner Zeitschriftfiir
Soziologie und Sozialpsychologie: pp. 98-127.
21 See N. Luhmann ( 1981). Politische Theorie im Wohlfahrtsstaat. Miinchen: S. Huntington (1975). "The
United States," in M. Crozier et al., The Crisis of Democracy, New York: NYU Press, pp. 59-118; B.
Cazes ( 1981). "The welfare state: A double bind," in OECD, pp. 151-173. See also the powerful critique
of the The Welfare State in Crisis, Paris: OECD, "economic reason vs. political irrationality' argument
by J. Goldthorpe (1978). "The current inflation: Towards a sociological account," in F. Hirsch, and J.
Goldthorpe (eds.L The Political Economy of Inflation. London: Martin Robertson.
22 Quoted from a paper by G. Esping-Anderson, "The incompatibilities of the welfare state," Working
Papers for a New Society, Jan. 1982.
23 See J. Lggue (1979). "The welfare state - victim of its success," Daedalus 108 (4): 69 87; also R. Klein
(1980). "The welfare state - a self-inflicted crisis?" Political Quarterly 51: 24-34.
24 On this problem of the new "service class" and its (partially converging) critique from the Left and the
Right, see I. lllich (ed.) (1977). Disabling Professions. London: Marion Boyars; a penetrating and
influential economic analysis of the rise of"unproductive" service labor is R. Bacon and W. Eltis (1976).
Britain's Economic Problem: Too Fen, Producers. London: Macmillan.
25 See L. Thurow (1980), The Zero-Sum Socieo'. Distribution and the Possibilities for Economic Change.
New York: Basic Books.
26 See J. Kocka. "Organisierter kapitalismus oder staatsmonopolistischer kapitalismus. Begriffiiche
vorbemerkungen," in H. A. Winkler (ed.), (1974). Organisierter Kapitalismus. G6ttingen: Vandenhoek.
27 Cf. E. W. Bi~ckenf/~rde (1976). "Die politische funktion wirtschaftlich-sozialerverb~inde," Der Staat 15:
457-483.
28 See, for the case of German and Italian unions, R. G. Heinze et al. (1981). "Einheitsprobleme der
einheitsgewerkschaft (1982)," in: Soziale Welt 32: 19-38; and M. Regini (1982). "Repr~isentationskrise
und klassenpolitik der gewerkschaften," Leviathan 10 (in press).