*State-market relations call for a holistic view of the relationship between the material and relational dynamics of society, on the one hand, and between these dynamics and institutional dynamics on the other. As the institution-of-institutions, the state contains mechanisms that are essential to the existence of markets themselves, and these mechanisms are not "natural" givens. It is therefore a mistake to conceive of the state, the market and society as opposing entities. One should turn instead to the institutionalist perspective, which draws from Polanyi, in order to offer a political approach to the state and the market. Economies are actually institutional production systems wherein the material density of the state both as organization and administration is of relevance. The institutionalist perspective thus needs to be fine-tuned in order to show that the state is more than a political-legal entity. That is one of the main goals of the present article.Keywords: state; political economy; institutionalism; institutions; market; state-market relation.
I venture to think that modern economic life is seen much more clearly when [there is an] effort to see it whole.John Kenneth Galbraith, The New Industrial State (1967: 7)
IntroductionWhen, in The Theory of Moral Sentiments (1759), Adam Smith speaks of the conditions under which we approve of the actions of others, he alludes to certain moral attributes, such as sympathy and solidarity, that are inherent in the consenting subject. But he also points out that the actions deserving moral approbation must be in accordance with "general rules"and with "a system of behaviour which tends to promote the happiness either of the individual or of the society." Then Smith goes on to explain that in that case what we have before us is "a beauty […] not unlike that which we ascribe to any well-contrived machine" (Smith, 2011: 291).We can say then that our relationship with others involves both our subjective motives (let us call them our identity) and circumstances resulting from those principles that transcend us as individuals (we will call them alterity). As was only to be expected, the author of The Wealth of Nations -where many found nothing but the cold mechanics of the division of labor and the principles of self-interest and incentive-driven action, seeing these * Article published in RCCS 95 (December 2011).
RCCS Annual Review, 4, October 2012The That is why I will adhere to the notion that there are problems that call for a holistic view, truly a whole philosophy of collective life that may serve as a frame of reference for understanding and bringing together processes of a diverse nature, which may prove hard to consider in a segmented fashion. Of course this is only to be expected when one is dealing with the state, given that the latter is essentially a political entity and given also that, for that same reason, it expresses in the broadest terms society's organization and historical course.In fact, in order to understand the state's underlying matrix we need...