Introduction: politics and economics

Until the nineteenth century, politics and economics were not discrete fields. In Europe during the early modern period, power and profit formed a single logic: property and title went hand in hand with administrative offices; warfare was conducted by ‘privateers’ as well as ‘crown’ forces; and sovereignty was closely bound up with commerce. Power and profit only became formally demarcated during the course of the nineteenth century. During this period, ‘economic’ interactions were increasingly carried out through ‘faceless’ transactions via the ‘symbolic token’ of ‘generalized money’ (Simmel, 1978: 332–3). Under these conditions, every product was exchangeable, including labour. Hence, for the first time, ‘free labour’ could be sold (as wages) according to market logics. The bracketing of a ‘private’ sphere of market exchange had the simultaneous effect of generating a ‘public’ sphere of political regulation. The economy became the realm of civil society mediated by logics of market exchange (‘the self-regulating market’ organized through ‘the invisible hand’), while politics became the realm of the state governed by the national interest (‘raison d’état’).

The decoupling of politics and economics was as much ideal as it was real. It was ideal in that states and markets remained tightly intertwined: just as the market required the state to recognize private property and provide a legal apparatus that could sustain accumulation and enforce contracts, so the state required the revenues that accrued from property, accumulation and contracts. But it was also real inasmuch as market logics were given a degree of autonomy, both semantically and legally. The separation of states and markets that, from a contemporary viewpoint, appears natural can be traced to practices that emerged during the nineteenth century (Giddens, 1985: 135–6; Rosenberg, 1994: 126). Any discussion of the relationship between states and markets is putting back together what was once an organic whole.

This chapter examines the relationship between states and markets over the last century and a half, since the emergence of the first stage of globalization. Its goal is to demonstrate the extensive entanglements through which logics of rule and gain have been sustained. In keeping with the remit of this volume, it shows that these entanglements are not random, but structured. They are also laden with power asymmetries. In this way, the chapter both builds upon and extends insights from global history into international relations (IR) and historical sociology.