Does Capitalism and the Nation-State Go Hand-in-Hand?

Does Capitalism and the Nation-State Go Hand-in-Hand?
by Ryan Setliff

Generally, conservatives of all stripes accept the idea that production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system—but some question the necessity of leaving that market economy unbridled. Russell Kirk reminds us:

"Capitalism gave the world what it needed," Ludwig von Mises writes sturdily in his Human Action, "a higher standard for a steadily increasing number of people." But it turned the world inside out. Personal loyalties gave way to financial relationships. The wealthy man ceased to magistrate and patron; he ceased to be neighbor to the poor man; he became a mass-man, very often, with no purpose in life but aggrandizement. He ceased to be conservative because he did not understand conservative norms, which cannot be instilled by mere logic—a man must be steeped in them. The poor man ceased to feel that he had a decent place in the community; he became a social atom, starved for emotions except envy and ennui, severed from true family-life and reduced to mere household-life, his old landmarks buried, his old faiths disspated. Industrialism was a harder knock to conservatism than the books of the French egalitarians. To complete the rout of traditionalists, in America an impression began to rise that the new industrial and acquisitive interests are the conservative interest, that conservatism is simply a political argument in defense of large accumulations of private property, that expansion, centralization, and accumulation are the tenets of conservatives. From this confusion, from the popular belief that Hamilton was the founder of American conservatism, the forces of tradition in the United States never have fully escaped. ¹

The development of capitalism disturbed traditional social unities, and this was particularly exacerbated by the state-instigated economic dirigisme aimed at hastening the process of economic expansion and industrial development. The artificial systems of patronage and privilege particularly disrupted social bonds and pressed down heavily upon cultural allegiances. But nonetheless, the framework of the modern market economy is nigh on impossible to conceptualize without acknowledging the nation-state. Robert Nisbet observes,

The State's development of a single system of law, sanctioned by military power, to replace innumerable competiting laws of guild, Church and feudal principality; its deliberate cultivation of trade in the hinterland; its standardized systems of coinage, weights and measure; its positive subsidies and protections to those new businessmen who were seeking to operate outside the framework of guild and Church; its creation of disciplined state workhouses—all provided a powerful stimulus to the rise of capitalism. ²

Capitalism is literally inconceivable without the nation-state. The nation–state, along with the consumers, laborers, and entrepreneurs comprise the essential elements of the culture of capitalism. It is with the civil and legal framework of the nation–state, (or its states and provinces,) that the market economy can prosper. A market economy thrives with a civil framework that upholds and protects the right to private property, makes provision for the enforcement of contracts, deterring and prosecuting acts of force and fraud, while providing the means of disciplining the work force. "In its early stages, Robert Nisbet suggests, fluidity of capital, mobility of labor, and the factory system—relied upon the stability provided by the 'continued existence of institutional and cultural allegiances which were, in every sense, precapitalist.'" To maintain its health, capitalism needs what only traditional associations and communities can bring to civil society—namely moral capital and cultural order. The state also provides and maintains the economic infrastructure—judicial systems, public works, and some social infrastructure, and so on—integral to the growth and continuity of capitalist production. "As important as the state was to the emergence of capitalism, ironically, the continual distension of state power undermines and threatens capitalism," notes Brad Stone.³

So, for readers what do you think of the nation-state and its relation to the market economy? Is globalization even tenable without world government? Do we even want globalization if world government is the price of admission? Is unbridled capitalism a solvent of cultural allegiances or is it just unbridled statism and economic dirigisme that disturbs traditional cultural unities?