As we examine the components of the scripts that order our lives, it is healthy to question our presuppositions that the structures of a state are necessary, and to justify the state from the ground up. This process of refreshment and reinvigoration can strengthen the stability of democratic societies by encouraging the electorate to examine what they have, and what the alternatives are.

The allocation of scarce resources: How is it done most fairly?

For the sake of argument, let us assume that human needs are based on competition over scarce resources. Therefore, the state exists to coordinate the allocation of scarce resources. This allocation takes a variety of forms from the birth-based allocation of feudalism, to market-driven allocation of the current capitalist system, to a contribution and need-based allocation of various models of socialism.

Accepting that the state in any form exists to allocate resources, let us now turn to a common criticism that the state is self-interested, and regardless of the good intentions of its founders, eventually turns inward to support its own victory in the resource-accumulation struggle. As the argument goes, the alternative to the rule of the state (and its democratic population) is to maintain the market-based allocation of resources, as it ensures amoral and therefore fair conditions for all participants.

This concern is well founded. There are countless modern examples of states being undemocratic and unresponsive to the needs of the population and providing outsized benefits to those well placed within them or to their corporate backers. Additionally, states have committed grotesque human rights abuses throughout history, after finding ways to justify them to their populations and obscure or excuse them from the international community.

Corporate market power undermines democratic participation

The potential of the state to become corrupted exists, but considering the alternative, rule by the market is infinitely more corruptible, especially in a democratic system in which markets enable and facilitate political participation.

Corporations are able to wield enormous power in the market that eclipses the individual. An unregulated or under-regulated market leaves incredible space for corporations to transform their market power into political power, and because it is the tendency of power in a vacuum to become concentrated, the rule of the market quickly becomes the rule of the corporation.

The voice of the individual, ostensibly the master of the democratic state, is diluted almost to nothing. From a governance standpoint, this becomes highly problematic for democratic accountability. Private enterprises are overwhelmingly authoritarian, as Elizabeth Anderson describes in Private Government. Moreover, as corporations monopolize the market, the freedom of the individual to “vote with their feet“ or with their wallet, increasingly diminishes until we are left with the only jobs in town being the same company stores in which workers spend their paychecks.

Two forms of operating complex societies

Is there an alternative to the dichotomy of the state or corporation? Fantasies of self-reliant relocation to the woods are impossible, leaving us with only two choices: a corporate dominated society, or a state dominated society.

Why do I frame humanity’s choice as a binary one between the state and the rule of the company? They are both manifestations of power and authority and can exercise and justify their actions according to whatever barometer they choose. In the hyper-ordered, highly interconnected societies in which we currently live, needs must be addressed through complex processes that require the coordination of multiple inputs and outputs. These processes can be managed either through the market-logical operation of the firm or the operations of the state, whether authoritarian or democratic.

(Democratic) accountability makes the difference

Is the modern nation-state the context within which we can find the solution to these problems, because isn’t the state at its core an arbitrary affectation? The difference lies in accountability The state has the capacity to be subject to the democratic control of an electorate, in whose interests it is then beholden to govern.

A corporation is not beholden necessarily to profit, but to those incorporated, the electorate in this situation, which of course have a mind for profit and hold it accountable to that end. The problem, of course, is that the single-minded pursuit of profit always has negative externalities for those outside of that representation.

Two factors set the state apart from the corporation. The universalism of the state compared with the exclusivity of the corporation, and the broad accountability of the state versus the narrow accountability of the corporation. The democratic state is universal in that it is beholden to the entire democratic electorate, and while there are practical problems in differing levels of access to the democratic machinery, the potential for universal and equal accountability exists. That accountability and equality must be striven for and guarded against by the influences that continuously seek to control and exploit them.

Conclusion: State-led solutions with checks and balances

The state is more likely to be subject to democratic control. With a strong legal and constitutional mechanism of oversight and the fact that we have had the opportunity to learn from our mistakes, state overreach is far less concerning than the corporate overreach and corporate irresponsibility strangling democracy across the world. Especially as humanity plunges into the deepening climate crisis, faith in corporations and the market to produce a magical solution while lobbying governments to avoid the obvious choices for mitigation are a convincing argument that a state-lead solution is not only more practical but necessary. In combination with civil society and supranational actors to act as a check against state overreach, democratic states free of the profit motive can act in the best interests of their people. Representation, democratic participation, and democratic oversight are the only ways to guarantee that no system becomes corrupt, or perhaps more realistically, to minimize that corruption through the capacity to root it out when it appears.

Keith Prushankin is a PhD candidate at the Berlin Graduate School for Global and Transregional Studies (BGTS) at SCRIPTS.