THESIS
The International Political Economy of Actually Existing Capitalism: 
Rethinking Globalisation and the Retreat of the State 



ABSTRACT 

This thesis presents an alternative tradition of classical Marxism capable of understanding what appears to be a shift in power from states to markets over the last two decades. It provides a theory of international political economy which explains both state ownership and control of the economy and its relinquishment, as aspects of ‘actually existing capitalism’ on a global scale. It is argued that this approach is superior to both Weberian-influenced International Political Economy (IPE), and the current tradition of classical Marxism in International Relations (IR), in that it has the potential to provide a deeper understanding of the apparent ‘retreat of the state’ as an aspect of so-called ‘globalization’. The core contribution of the thesis is a critique of the current classical Marxist approach in International Relations and the proposal of an alternative which differs in its analysis of the space, time and motion of capitalism. It is argued, through a rereading of Capital volumes 1 to 3, that this alternative is truer to Marx’s intentions. It is further argued that this more nuanced understanding of capitalism is well-represented through the writings of Hilferding, Bukharin, and Lenin, and is identifiable, though underdeveloped, in the work of contemporary Marxists influenced by these theorists. This alternative tradition of classical Marxism provides an understanding of capitalism in phases of both ‘nationalization’ and ‘privatization’, deepening our understanding of capitalism as it ‘actually exists’. The thesis has two main tasks. The first is to show that both Weberian-influenced IPE and classical Marxism in IR have an inadequate model of capitalism, a theoretical limitation that has become evident in the globalization debate over ‘the retreat of the state’. The second is to suggest an alternative theory of capitalism based on a rereading of Capital volumes 1-3. This theory of ‘actually existing capitalism’ is better able to capture the complexity of changing state market-relations including what is superficially described as the ‘retreat of the state’.

Introduction The Privatisation Revolution as the ‘Retreat of the State’ 1

Chapter 1 The Globalisation Paradox 13
1.1 Introduction 13
1.2 The Globalisation Thesis 15
1.2.1 The Nation State 17
1.2.2 The World Market 22
1.2.3 State-Market Relations 28
1.2.4 Paradox Within 35
1.3 The Internationalisation Counter-thesi s 37
1.3.1 Paradox Retained 40
1.4 An Attempt at Transcendence 41
1.4.1 Paradox Lost? 44
1.4.2 Paradox Postponed 47
1.5 Conclusion 50

PART ONE: STATES AND MARKETS: A QUESTION OF METHOD 52

Chapter 2 Weberian Pluralism: The Separation of State and Market in IPE 55
2.1 Introduction 55
2.2 Why IPE? 57
2.2.1 IPE on Interdependence 58
2.2.2 The IR Counter-thesis 60
2.2.3 Third Wave Interdependence Theory 62
2.2.4 IPE Beyond Interdependence 66
2.3 The IPE Method 70
2.3.1 Weberian Pluralism 1 1
2.3.2 The Spectre o f Weber in IPE 75
2.4 A Classical Marxist Critique 83
2.4.1 A Marxist Critique o f Weberian pluralism 83
2.4.2 A Marxist Critique o f IPE 86
2.5 Conclusion 94

Chapter 3 Classical Marxism: The ‘Apparent’ Separation of State and Market in IR 96
3.1 Introduction 96
3.2 The Empire o f Civil Society 98
3.3 Rethinking Empire o f Civil Society 108
3.3.1 The Poverty o f Analogy 109
3.4 Rethinking the ‘Apparent’ Separation of State and Market 117
3.4.1 The Purely Political State 117
3.4.2 The State Debate and the Relative Autonomy Trap 122
3.4.3 A Tale o f Two Sovereignties 125

3.5 Conclusion 130

PART TWO: ACTUALLY EXISTING CAPITALISM: AN ALTERNATIVE TRADITION 134

Chapter 4 Rereading Capital: From Volume One to Volume Three 137
4.1 Introduction 137
4.2 The Dialectical Method in Capital 139
4.3 The Geographical Scope of Capital 147
4.3.1 The Country Model o f Capitalism 148
4.3.2 Reading Capital 152
4.3.3 The Society o f Capital 156
4.4 The Historical Trajectory of Capital 161
4.4.1 Arrested Development 162
4.4.2 Reading Capital 165
4.4.3 The History o f Capital 169
4.5 The Core Dynamic of Capital 172
4.5.1 The Pristine Law o f Value 173
4.5.2 Reading Capital 177
4.5.3 The Dynamic o f Capital 183
4.6 Conclusion 186

Chapter 5 Imperialism and World War: Competing State Monopoly Trusts 188
5.1 Introduction 188
5.2 Hilferding 192
5.2.1 Historical Trajectory 192
5.2.2 Hilferding Revisited 202
5.3 Bukharin 209
5.3.1 Geographic Scope 209
5.3.2 Historical Trajectory Extended 214
5.3.3 Bukharin Revisited 222
5.4 Lenin 226
5.4.1 Core Dynamic 227
5.4.2 Lenin Revisited 234
5.5 Conclusion 239

Chapter 6 Cold War: State Capitalism and Beyond 241
6.1 Introduction 241
6.2 The Russia Question 247
6.2.1 Orthodox Trotskyist Position 247
6.2.2 New Class Theories 249
6.2.3 Internal Theories o f State Capitalism 251
6.2.4 International Theories o f State Capitalism 254
6.3 The State Capitalist Answer 258
6.3.1 Geographic Scope 259
6.3.2 Historical Trajectory 260
6.3.3 Core Dynamic 261
6.4 Beyond Russia 267
6.4.1 State Capitalism and Free Wage Labour 268
6.4.2 The Nationalisation Revolution on a Global Scale 275
6.5 Beyond State Capitalism 283
6.5.1 Geographic Scope 284
6.5.2 Historical Trajectory 287
6.5.3 Core Dynamic 293
6.6 Conclusion 297

PART THREE: RETHINKING GLOBALISATION AND THE RETREAT OF THE STATE 299

Chapter 7 Actually Existing Globalisation 303
7.1 Introduction 302
7.2 Globalisation in Practice 303
7.2.1 The 1970s 305
7.2.2 The 1990s and Beyond 313
7.3 Globalisation in Theory 323
7.3.1 Geographic Scope 323
7.3.2 Historical Trajectory 326
7.3.3 Core Dynamic 332
7.4 Rethinking States and Markets 338
7.4.1 A Riposte to Volume One Marxism 338
7.4.2 A Rejoinder to IPE 341
7.5 Rethinking the Retreat of the State 343
7.5.1 The Globalisation Paradox Resolved 343
7.6 Conclusion 346

Conclusion The Privatisation Revolution as Post Cold-War Reconstruction 348

References 366