Marxist theory of Public Policy PDF

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Marxism, Neo-Marxism and the Politics of Public PolicyIntroductionCurrent research on political sociology draws heavily from Marxist and neo- Marxist perspectives. Marx revealed the contradictions inherent in the capitalist mode of production. Neo-Marxists built upon Marxist theory to explain the id...

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Marxism, Neo-Marxism and the Politics of Public Policy Introduction Current research on political sociology draws heavily from Marxist and neoMarxist perspectives. Marx revealed the contradictions inherent in the capitalist mode of production. Neo-Marxists built upon Marxist theory to explain the ideological and repressive functions of the capitalist state. Furthermore, modern research on the politics of public policy examines empirical events, providing further support for neo-Marxist explanations of the state.

Marxism and Neo-Marxism Although he did not have a clear theory of the state, Marx's theory of capital influenced a wide range of political scholars. One group heavily influenced by Marx's theory were neo-Marxists. Neo-Marxists attempted to explain how politics and public policy work within the capitalist system. Specifically, they address how the state helps reproduce capitalist relations and the relationship between corporate and state actors. Marx's Theory of Capital According to Marx, the key elements which form human history are linked through the production process: Due to the importance of the production process in explaining human history, Marx (1867) analyzed the current mode of production: capitalism. Capitalism is the pursuit of capital. It is not stagnant; it is a perpetual process by which capital is accumulated. A singular circuit of capital is as follows:

First a capitalist uses money to buy commodities sold on the market: the means of production and wage labor. Then, labor power and the means of production interact throughout the labor process to create a commodity to be sold on the market for profit. For capitalist relations to be reproduced, the capitalist must use the profit to go through the circuit again and again. In order for the production process to work, there must be the continuous flow of capital. However, there are problems inherent in capitalist production- particularly class struggle, overproduction and underproduction. Class struggle relates to the exploitation of workers inherent in the capitalist system. Capitalism requires profit and profit is achieved through capitalist exploitation of workers. Exploitation is operationalized as surplus labor / necessary labor. Even considering the buying and selling of labor power is done fairly, the worker is still exploited through capitalist requirements for surplus value. Surplus value is made up of relative surplus value and absolute surplus value. Relative surplus value is value arising from shortening the time necessary to produce, but keeping the working day constant. Absolute surplus value is value arising from increasing the time of production by extending the working day. Either way, capitalist surplus value requires labor to work more than necessary to produce. In short, worker/capitalist conflict is inherent in capitalism.

Capitalism also tends towards either overproduction or underproduction. When capitalists face stagnating markets, they must either externalize costs or expand into new markets (Harvey 2010). Overproduction and underproduction is the result of these mechanisms. Overproduction is the result of competitive pressures to devalue labor. Capitalist accumulation is facilitated by increased exploitation and production. As such, capitalism tends to produce more than social consumption capacities. Capitalism also tends toward underproduction. Underproduction results from capitalist exploitation of environmental resources. Capitalism requires expanding markets and society must continuously increase its production and consumption capacities, depleting natural resources. Additionally, to stimulate profits, capitalists will externalize costs and pollute the environment, eventually destroying the environment in which it is embedded (a.k.a., ecological rift). In short, capitalism destroys the social and environmental conditions necessary for the system to be reproduced. In order to perpetuate capitalist relations despite its inherent contradictions, the capitalist superstructure provides support for the economic base. The superstructure is the cultural, legal, ideological, religious and political relations in society. There is a reciprocal relationship between the base and the superstructure- they support each other. For example, property does not exist without a legal concept and property is not necessary for the economic relations of capitalist relations. In conclusion, according to Marxist theory, the political superstructure provides support for the economic base. Capitalist Power Blocs Neo-Marxists expand upon Marxist theory by explaining just how the political superstructure provides support for the economic base. According to Poulantzas (1973), the state serves the function of mediating class conflict. As such, in order to serve its function, the state must be relatively distinct from a singular class faction. The state maintains relatively autonomy, meaning it is distinct from but embedded within economic relations. As a result, the state has the capacity to support working class interests, while making decisions within capitalist contexts. The question becomes: Considering relative autonomy, how does the political superstructure become reflective of the economic base?

Poulantzas (1973) answers this question by claiming the state becomes reflective of the economic base through power blocs. According to Poulantzas (1973), a power bloc is made up of an alliance between several class factions. Class factions are different segments of capital. Examples of different class factions are the landed class and the merchant class. Several class fractions can politically mobilize to form a power bloc necessary to influence public policy in such a way to reproduce capitalist relations. Capitalist Hegemony According to Gramsci (1971), capitalists are able to influence the state through cultural hegemony. Hegemony is the ideological predominance of corporate values, norms and beliefs. Cultural hegemony is part of the ideological superstructure, which provides support for the economic base. Through ideological dominance, capitalists are able to ensure capital relations are reproduced. The Fiscal Crisis of the State According to O'Connor (1973) the state has run into fiscal crisis as a result of its attempts to manage capitalist crises. The state tries to manage the inherent contradictions of the capitalist system through social expenditures and social capital spending (O'Connor 1973). Social expenditures are the state's attempt to legitimize the capitalist system and "maintain social harmony" (O'Connor 1973:7). Social capital spending is the state's attempt to stimulate capital accumulation through social investment (which increases the productivity of labor) and social consumption (which reduces the reproductive costs of labor). Through these efforts, the state helps reproduce capitalist class relations and temporary resolve crises emerging from the inherent contradictions of capitalist production. However, in order to maintain legitimacy, the state must continuously increase expenditures, leading to a fiscal crisis. Social Structures of Accumulation According to the social structures of accumulation framework (McDonough, Reich and Kotz 2010), institutions supporting capital accumulation are characterized by a life cycle of exploration, consolidation and decay. As such, political institutions go through life cycles of exploration, consolidation and decay. During exploration, groups experiment with different political

arrangements which will facilitate capital accumulation. During consolidation, policy and regulation which facilitates capital accumulation becomes institutionalized. During decay, political institutions fail to support capital accumulation and the cycle goes back to the exploration phase- a new institution facilitating capital accumulation will rise and fall.

The Politics of Public Policy Like Marx, research on the politics of public policy emphasizes the historical development of class relations. Policy and capital relations are are the result of constantly evolving historical relationships (Isenberg 2000). As such, research analyzes the historical development of critical aspects of U.S. public policy including welfare policy, the anti-welfare counter movement and neoliberalism. The Development of Welfare Policy Research on the development of welfare policy provides support for O'Connor (1973) and Poulantzas (1973). Research supports O'Connor through its analysis of the development of the welfare state. The politics of public policy research demonstrates how class conflict results in social expenditures like social security and welfare policy (Jenkins and Brent 1989). Like Poulantzas, public policy research emphasizes the historical power bloc (Jenkins and Brent 1989). Welfare policy is the result of historically contingent political resources and actors (Hicks and Misra 1993). Drawing from Poulantzas, research finds policy is related to the historical development of a power bloc resulting from class conflict. Social movement organizations create a sense of crisis among elites. As a result, class factions politically mobilize to create a dominant power bloc necessary to push forward and implement welfare policy (Jenkins and Brent 1989). State Structure and Increased Inequality Although liberal corporate policy was implemented after World War II, by the 1970s, a counter-movement developed to roll-back social welfare and deregulate business policy. Deregulation resulted in increased inequality and the financial crisis (Panitch and Konings 2009). According to Mizruchi (2013), deregulation and the decline of liberal corporatism is the result of decreased business unity. By the 1970s, business had successfully attacked regulation, organized labor and the power of the central bank. However, by defeating these forces, corporations lost focus on the long-term stability of the economy

as a whole. As a result, factions attempted to manage the fiscal crisis of the state by decreasing social expenditures, leading to increased inequality and social turbulence. Public policy and the development of state structure is problematic, as it can be used as a tool for business elites to achieve their interests (Woods and Morris 2007), or it can drift from its original purpose (Hacker and Pierson 2010). According to Woods and Morris (2007), state structures helped unify business and exclude opposition groups. Like Woods and Morris (2007), Hacker and Pierson (2010) find organized interests shape public policy. However, whereas Woods and Morris (2007) examine the politics underlying NAFTA, Hacker and Pierson (2010) examine the politics underlying increased social inequality. According to Hacker and Pierson (2010), increased inequality is the result of changes in: (1) financial markets, (2) corporate governance, (3) industrial relations and (4) taxation. Although policy to increase equality was enacted, because of changes caused by corporate actions, policy drift occurred. According to the politics of public policy research, welfare policy was degraded through long, purposeful corporate actions. Like Gramsci (1971), research finds hegemony is a key factor influencing social outcomes. Corporations have the power to implement long-term efforts to guide public perceptions and change public opinion from strongly supporting welfare policy, to opposing it. For example, Quadagno (1998) finds public confidence in social security has declined as a result of a long, successful strategy by rightwing opponents. Elites perpetuated "the perversity thesis" which popularized the claim that welfare is a policy which creates incentives for individuals to not be productive members of society (Somers and Block 2005). In short, by influencing ideology, corporations were able to roll-back welfare reforms. In addition, deregulation and public-private partnerships have been able to shift New Deal policy away from focus on the welfare of citizens and towards emphasis on economic growth. For example, Molotch (1998) found HUD was co-opted by capitalist growth machines. HUD now works through private partnerships which decide where and how to build, resulting in increased inequality (Molotch 1998). In conclusion, although social welfare policies were

implemented following World War II, due to capitalist efforts, welfare policies have eroded, increasing social inequality. Neoliberalism and the State Neoliberalism is a dominant ideology perpetuating inequality around the entire world. According to Harvey (2012:6): "The neoliberal turn has restored class power to rich elites." Neoliberalism is an ideology which claims the most amount of wealth accumulates through free market fundamentalism. However, neoliberalism goes beyond liberal economics by pushing for the financialization of everything. As a result, the state has set in motion international policy aimed to expedite market liberalization around the world (Harvey 2007). Drawing from Poulantzas and the social structures of accumulation framework, public policy research demonstrates how neoliberalism is a historical ideological structure which emerged to support capital accumulation (Prechel and Harms 2007). According to Prechel and Harms (2007), neoliberalism is an ideology which emerged out of the interests of a historically contingent power bloc. During the decay-exploration social structures of accumulation transition, the power bloc politically mobilized to implement neoliberal policy in order to better accumulate capital. Public policy research demonstrates how neoliberalism and the state has facilitated the development of the global financial real estate market which contributed to the recent global financial crisis (Gotham 2006). According to Gotham (2006), the state shapes global capital flows; specifically, influenced by neoliberal ideology, the state facilitated the financialization of local real estate through the expansion of mortgage-backed securities and real estate investment trusts (REITs). In an attempt to stimulate capital accumulation, decision makers aimed to de-localized property and place local real estate into the global financial market. Although this increased the power of the economic elite, neoliberal policy has not been effective at revitalizing capital accumulation (Harvey 2007). Influenced by neoliberalism, public policy provided support for the development of REITs and mortgage-backed securities which eventually resulted in the 2007-2008 global financial crisis. In short, capitalist hegemony influences state policy in

such a way that increases capitalist power at the extreme detriment of others around the world.

Conclusion The politics of public policy is highly related to neo-Marxist literature. Whereas neo-Marxism provides a theoretical explanation of how politics and public policy work within the capitalist system, research on the politics of public policy provides empirical support expanding upon their claims. By connecting modern events with neo-Marxist theory, research on the politics of public policy provides further support for Marx's theory of capital....