The State

A new systems-analytic approach sought to identify these limits by identifying specific examples of policy breakdown, particularly instances where state policy either fails to maintain capital accumulation or to restabilize social order among disaffected subordinate classes. The systems-analytic theory of the state is largely identified with the "post-Marxist" works of Jürgen Habermas and Claus Offe, who were influenced by the derivationists conceptually, but whose methodology draws heavily on the radical systems theory of Niklas Luhmann. Offe is largely credited with advancing state theory beyond instrumentalism and structuralism by introducing the dependency principle. The dependency principle asserts that the decision-making power and policy capabilities of the state in capitalist society are dependent upon the continuity of the capital accumulation process, primarily because of the modern state's dependence on tax revenues. Therefore, state elites in a capitalist economy must adopt policies that enhance business confidence in the short-run and that promote a favorable business climate over the long-run. Where state elites promote a favorable business climate with public policy, they will be rewarded with high rates of private investment, economic growth, and employment stability. Where state policies undermine business confidence, business people will refuse to invest, which generates an investment strike throughout the economy, while many business people may even redeploy their capital toward economies in which they have greater political and economic confidence.

The modern state's dependence on substantial and growing tax revenues means that every interest state personnel have "in their own stability and development can only be pursued if it is in accordance with the imperative of maintaining accumulation" (Offe, p. 126). According to Offe, "this fundamental dependency upon accumulation also functions as a selective principle upon state policies," because violating this logic of accumulation would simultaneously weaken or undermine all state capacities. Thus, a concern for the continuity of private accumulation is "incorporated in the pursuit of interests and policies that, considered by themselves, may have little or nothing to do with accumulation" (p. 126).

However, in a political democracy, the capitalist state must also be legitimate. A capitalist state that sustains an exploitative accumulation process can only achieve legitimacy by deploying concealment and ideological mechanisms. Concealment mechanisms, such as administrative secrecy, facilitate the adoption and implementation of maintenance policies outside the sphere of class struggle and special-interest competition. The state's ideological mechanisms convey the image that its power is organized to pursue the general interests of society as a whole, even though it functions in a specific relationship to capitalist accumulation. Consequently, a capitalist state must sustain and yet conceal a structural disjuncture between its democratic form and its capitalist functions.

The capitalist state must respond to contradictions in the capitalist mode of production with social policies, but an important feature distinguishing post-Marxist systems analysis from similar structuralist analyses is the assertion that welfare states actually fail to function at precisely those moments when most needed and these system failures result in contradictory outcomes that produce a variety of cumulative crisis tendencies in capitalist societies. Jürgen Habermas and James O'Connor suggest that the political contradictions and policy failures of modern states cumulatively generate an economic crisis, a fiscal crisis, crises of state rationality and legitimation, and a motivation crisis in the underlying population and workforce.