Recently, I wrote a paper for my comparative politics class titled ‘Mexico: A state in crisis’ in which I proposed a new concept: a ‘state in crisis’ and countered what I believed to be a neoliberal strand among the students in the class. In order for everyone to read about this, I posted it on academia.edu. This article aims to expand the definition of a ‘state in crisis.’
While there are a number of different results when one searches for a ‘state in crisis,’ a term which many have used, my definition of the term has seemingly not been used before. In the PowerPoint for my presentation on paper, I defined this term as the following:
“A state which has not systematically broken down, but it has encountered some sort of domestic crisis which threatens the legitimacy and integrity of the state. Such a state has certain social conditions which threaten the well-being of the general population.”
For Mexico, the ‘domestic crisis’ was the drug war which is ravaging the country from top to bottom. The same could be said for the large amount of poor in Mexico.
In a section titled ‘Questions about the paper and presentation‘ I expanded on this term, writing:
“…Most importantly, I don’t want to use the term failed state because as a person in the First-World, in an imperialist nation in fact, I don’t want to impose a term onto Mexico, a Third -World country, but not be able to apply it to my home country, the United States. The term ‘state of crisis’ gets around this, and allows one to apply it to ALL countries in the world, whether rich, poor or middle-class countries.”
I added that even the US could a ‘state in crisis’:
“The United States, like Mexico has not had a systematic breakdown of the state. Also, there are a number of situations that could be classified as a “domestic crisis” in Mexico that threatens the legitimacy and integrity of the US state. These include rising poverty, massive student loan debt, the rise of mass incarceration and so on. As a result, there are social conditions present in the United States which “threaten the well-being of the general population”
Still, there needs to be some expansion of this definition. Some states which could be considered a ‘state in crisis’ are plutonomies. A controversial Citigroup memo in 2005 defined plutonomies as “economies powered by the wealthy” and classified the U.S., Canada and the UK as pluonomies (and later Australia). The memo further noted:
What are the common drivers of Plutonomy? Disruptive technology-driven productivity gains, creative financial innovation, capitalist-friendly cooperative governments, an international dimension of immigrants and overseas conquests invigorating wealth creation, the rule of law, and patenting inventions…There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie…The six drivers of the current plutonomy: 1) an ongoing technology/biotechnology revolution, 2) capitalist-friendly governments and tax regimes, 3) globalization that re-arranges global supply chains with mobile well-capitalized elites and immigrants, 4) greater financial complexity and innovation, 5) the rule of law, and 6) patent protection are all well ensconced in the U.S., the UK, and Canada…At the heart of plutonomy, is income inequality. Societies that are willing to tolerate/endorse income inequality, are willing to tolerate/endorse plutonomy.
As Noam Chomsky noted that basically, “Plutonomy refers to the rich, those who buy luxury goods and so on, and that’s where the action is…They claimed that their plutonomy index was way outperforming the stock market. As for the rest, we set them adrift…. These days they’re sometimes called the “precariat” — people who live a precarious existence at the periphery of society.” In a following memo, Citigroup analysts noted:
Asset booms, a rising profit share and favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries…in the plutonomy countries, the rich are such a massive part of the economy, that their relative insensitivity to rising oil prices makes US$60 oil something of an irrelevance. For the poorest in society, high gas and petrol prices are a problem. But while they are many in number, they are few in spending power, and their economic influence is just not important enough to offset the economic confidence, well-being and spending of the rich.
Still, not all ‘states in crisis’ are plutonomies. The same goes for plutocracies, which Investopedia defines as:
“A government controlled exclusively by the wealthy either directly or indirectly. A plutocracy allows, either openly or by circumstance, only the wealthy to rule. This can then result in policies exclusively designed to assist the wealthy, which is reflected in its name”
However, there is a higher likelihood that those states that can be considered ‘in crisis’ are “unequal societies” with ‘Elites’ and ‘Commoners’ rather than egalitarian societies (no elites) or equitable society (with workers and non-workers). Such terms come from the classifications used by Safa Motesharrei and Eugenia Kalnay at University of Maryland, and Jorge Rivas at the University of Minnesota in the controversial but well-sourced study titled ‘Human and Nature Dynamics (HANDY): Modeling Inequality and Use of Resources in the Collapse or Sustainability of Societies’ released in March of this year which concludes that ” Collapse can be avoided, and population can reach a steady state at maximum carrying capacity if the rate of depletion of nature is reduced to a sustainable level and if resources are distributed equitably.”
There is something more. Usually in states ‘in crisis’ elites have more power in forming public policy than the general populace or at minimum put in place elite-friendly policies. Recently, scholars have concluded that this applies to the US, writing:
“economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence…Our analyses suggest that majorities of the American public actually have little influence over the policies our government adopts”
Also, it is possible that a state ‘in crisis’ have “extractive institutions.” Daron Acemoglu and James A. Robinson define this as corresponding to “extractive societies, where an elite controls the economic and political system and uses its power to extract wealth from the society at everyone else’s expense” in contrast to “inclusive societies, where political power and economic benefits are shared broadly among the population.”
It is important to note that states which can be classified as a ‘state in crisis’ are usually capitalist governments but can have a number of different regimes: ‘liberal democracy’ , authoritarianism, psuedodemocracy/competitive authoritarianism/hybrid regime/illiberal democracy, or anything in between.
To review, a ‘state in crisis’ is:
- A state which is experiencing a domestic crisis(es) which threatens state legitimacy and integrity but has not systematically broken down
- State has social conditions which threaten the population’s well-being
- State usually has a capitalist government
- State is likely an ‘unequal society’ with elites and commoners rather than an equitable society or an egalitarian society
- State might be considered a plutonomy, or an economy powered by wealthy consumers with a group of members in society that are in a precarious position, a
- State might be a plutocracy or a government by and for the rich and powerful
- Elites in the said state may have more power in forming public policy than the average citizen and at minimum elite-friendly policies, often called ‘neoliberal’ like investor-rights agreements, privatization of public services, tax cuts for the rich, etc…
- State can have a plethora of different regimes, ranging from ‘democracy’ to ‘authoritarianism’
- The state might have an “extractive society” leading to extractive institutions which is more likely than an “inclusive society”
 Guy Standing wrote on Policy Network in 2011 about the precariat:
“Every progressive political movement has been built on the anger, needs and aspirations of the emerging major class. Today that class is the precariat…The precariat has emerged from the liberalisation that underpinned globalisation. Politicians should beware. It is a new dangerous class, not yet what Karl Marx would have described as a class-for-itself, but a class-in-the-making, internally divided into angry and bitter factions. It consists of a multitude of insecure people, living bits-and-pieces lives, in and out of short-term jobs, without a narrative of occupational development, including millions of frustrated educated youth who do not like what they see before them, millions of women abused in oppressive labour, growing numbers of criminalised tagged for life, millions being categorised as ‘disabled’ and migrants in their hundreds of millions around the world. They are denizens; they have a more restricted range of social, cultural, political and economic rights than citizens around them…Growth of the precariat has been accelerated by the financial shock, with more temporary and agency labour, outsourcing and abandonment of non-wage benefits by firms…The precariat has no control over its time, and no economic security. Many in it suffer from what I have called in the book, a precarity trap. This is on top of the familiar poverty trap created by the folly of ‘targeting’ on the poor via means-tested social assistance. The precariaty trap arises because it takes time for those on the margins of poverty to obtain access to benefits, which means their hardships are underestimated, while they have no incentive to take low-income temporary jobs once they are receiving benefits…The worst fear of all is that a large part of the precariat, and those fearing a life in it, could be drawn to neo-fascism…The precariat observes with growing anger. The politicians had better respond or we will reap a harvest of discord. We can do better.”
A comment below an article on Karmas Project continues this:
“Many folks consider precariat to just be a new way of saying proletariat–specifically referencing the phenomenon of “proletarianization” going on for former members of the “middle class” in 1st world countries. It can be argued that the proletariat as such is always precarious, and that the experience of precarity by 1st world workers is simply what most workers everywhere would experience anyways. Such precarity was also perfectly common in early capitalism within the US and Europe as well… However this does not exhaust the use of the term precariat. The precariat is the name for a specific SEGMENT of the broader working class — and it is the name for something that IS novel, something that is new in today’s form of capitalism, something which never rightly existed for the historical proletariat. The precariat is the name for entire national economies that are disproportionately reliant on service industries and fictitious capital. All of that is more or less true — there still exists a proletariat as such and within that proletariat exists what we call the precariat.”
There are a number of good other articles on this subject: ‘A Precariat Charter: From Denizens to Citizens – review, ‘Why the precariat is not a “bogus concept””, ‘Youthful members of the full-time precariat, ‘The “Precariat,” the New Working Class”, ‘Is there a precariat?, ‘Paying Attention to the Precariat, ‘The rise of the precariat promises a renewal of the left‘, ‘Is There A Precariat? An Interview with Charlie Post‘, ‘The Precariat’ on rise in America‘, ‘Word of the Week: Precariat, ‘The American Precariat‘, ‘Preventing an American precariat, ‘Professors Join the Precariat‘, ‘Welcome To The Precariat, ‘The rise of the “precariat”?‘, ‘Zen Over Zinn: Avoiding Unpleasant Truths With David Brooks, ‘A Specter Is Haunting Precarity‘, ‘Towards a Charter for the Precariat‘, ‘The Precariat by Chris Dunkley‘, ‘Standing replies on the ‘precariat’, ‘The ‘precariat’: fighting for real jobs, ‘The new ‘precariats’‘, ‘Book Review: The Precariat: The New Dangerous Class by Guy Standing‘, ‘The Precariat and Climate Justice in the Great Recession‘, ‘Working on the Margins: Japan’s Precariat and Working Poor‘, and so on. There is however, debate if it is separate from the working class or if it is part of the working class. In my view, it seems that it would be a bit of both, because it could include unemployed people, along with those who have low-wage jobs, and those tied to ‘wage slavery. This relates to the Marxian concept of the lumpenproletariat which Karl Marx defined in 1852 as “vagabonds, discharged soldiers, discharged jailbirds, escaped galley slaves, swindlers…pickpockets, tricksters, gamblers…pimps…brothel keepers, porters, literati, organ grinders, ragpickers, knife grinders, tinkers, beggars — in short, the whole indefinite, disintegrated mass, thrown hither and thither, which the French call la bohème”
 Marxists define this not as a liberal democracy, but as a ‘bourgeois democracy’ as noted in the Encyclopedia of Marxism:
A government that serves in the interests of the bourgeois class. The word Democratic is attached to such a government, because in it all people in such a society have certain freedoms: those who own the means of production , the bourgeoisie, are free to buy and sell labor-power and what is produced by it solely for their own benefit. Those who own only their own ability to labor , the proletariat, are free to sell themselves to any bourgeois who will buy their labor power, for the benefit of maintaining their own survival, and giving greater strength and power to the bourgeoisie. The state fundamentally represents the interests of one class over others.