Chapter 2 State Theory and Civil Society

Adam Smith, it is generally acknowledged, founded the modern discipline of political economy with the study entitledAn Inquiry into The Wealth of Nations(1776) which he built upon the ethical system he presumed to exist in hisTheory of Moral Sentiments(1759). Ricardo took Smith's observations somewhat further with his publication ofOn the Principles of Political Economy and Taxation(1817). When John Stuart Mill wrote hisPrinciples of Political Economyin 1848, his considerations of economic processes were intimately connected with the political. By the time Marx publishedDas Kapitalas a critique of political economy in 1867 the term was entrenched in both academic life and in common parlance and political circles. The study of economics was an integral part of the study of the state. Ironically, however, political economy was about to be upstaged by the development of economics as a separate and positivist discipline. William Stanley Jevons had published his “Brief Account of a General Mathematical Theory of Political Economy” in theJournal of the Royal Statistical Societyin the previous year. This was much more widely read at the time thanDas Kapital. By 1890, Alfred Marshall had published hisPrinciples of Economics. The book began with these words: “Political economy or economics is a study of mankind in the ordinary business of life.” The great tradition of seeing economics as an integral part of politics and vice versa was disappearing. However, though economists were anxious to convert that part of political economy known as economics and see it as a scientific discipline, the reality, that is the integrated nature of the state and the economy, remained. Simply because certain ideologues decided to separate politics from economics did not mean that the state in any sense disentangled itself from the economy or the economy from the state.