TCS Daily

The Market State President

By Gregory Scoblete - September 8, 2004 12:00 AM

One of the most intriguing aspects of President Bush's convention acceptance speech last week was his rhetorical embrace of the Market State, a concept fleshed out by Phillip Bobbitt, a former director of intelligence in the National Security Administration under President Clinton, in his opus The Shield of Achilles: War, Peace and the Course of History.

Through the course of 800-plus pages, Bobbitt sketches out the history of state evolution -- from Princely States to the Nation State -- arguing that both external threats and the domestic quest for legitimacy shape the relationship between government and the governed. He argues that with the passing of the Long War (defined as the period beginning with World War I and ending with the dissolution of the Soviet Union) we are now in a transitional period from the Nation States that dominated the 20th century to the Market State that looks to define the 21st.

The Nation State was defined and legitimated, in part, by its ability to ensure the material well being of its citizens. In contrast, the Market State earns its legitimacy by providing the opportunity to its citizens to advance their own well being. The Nation State is characterized by top-down, government centric solutions like the welfare state, that make absolute guarantees about the material outcome of its charges. The Market State simply says: we'll guarantee a set of basic tools and an open playing field, but after that, you're on your own to make of it what you will.

Bush embraced this transition to the Market State. In his domestic proposals, Bush explicitly acknowledged that the Nation State welfare-model needed to give ground:

The times in which we work and live are changing dramatically. The workers of our parents' generation typically had one job, one skill, one career, often with one company that provided health care and a pension. And most of those workers were men.

Today, workers change jobs, even careers, many times during their lives, and, in one of the most dramatic shifts our society has seen, two-thirds of all moms also work outside the home.

This changed world can be a time of great opportunity for all Americans to earn a better living, support your family and have a rewarding career.

Bush's domestic agenda, allowing younger workers to direct the investment (of their own money) in Social Security, of portable pensions to follow a mobile work force, and reforming a cumbersome tax code, is specifically aimed at devolving responsibility for individual welfare from the State to the individual. He touts it as an "ownership society" but it could just as easily be called an "opportunity society" - under Bush's vision, the government promises that all citizens will have the opportunity to advance themselves, regardless of station. That is a distinctly different promise than the traditional Nation State compact that guarantees your welfare by redirecting wealth from one population segment to another.

Even the President's proposed spending initiatives -- increased money to education, to child heath care, and to junior colleges - had one consistent, Market State theme: the State is responsible for laying the foundation for your well-being but ultimate success is up to you.

The unspoken corollary -- intolerable to Democrats -- is that if you fail, the State will have a very limited capacity to help you. Indeed, critics of Bush will decry this as a move designed to ultimately gut the welfare state. And they will be correct -- it is. And it is vital.

Why A Market State?

The answer, Bobbitt says, is simple: the threats we now face demand it. The government simply cannot fulfill its core function of protecting its citizens from modern dangers and fulfill the material promises of the Nation State. We see but a glimpse of this reality in our massive budget deficit. The necessary yet costly demands of the War on Islamic Terrorism - extended overseas troop deployments, the protection of critical homeland infrastructure and strengthening of the public health system to gird against a bio-terror attack - simply cannot coexist alongside a raft of social spending commitments. 21st century threats have collided with a 20th century government. And terrorism is just the beginning.

The globalization of the economy with its attendant global travel, the widespread adoption of advanced communication tools (the Internet, mobile phones, etc.) and the growing ubiquity of sophisticated weapons technology bring with it other threats, anticipated by Bobbitt, including global pandemics and crippling attacks on global infrastructure including cyber attacks that shut down critical banking and security systems. These new perils will require a massive, sustained, financial investment to safeguard against.

These threats are not passing dangers that will be vanquished quickly even with an enormous investment in blood and treasure such that defeated the fascist regimes of Nazi Germany and Imperial Japan - they are systemic to the world we live in and necessitate radical changes in the structure and promises of government if they are to be met successfully. A government that cannot defend against these new dangers will ultimately forsake its legitimacy.

In this sense, critics of Bush's failure to create a war-time economy of rationing or conscription are wrong: this is not a "crises" necessitating even a prolonged period of "sacrifice" and then a return to "normal." This is, as Vice President Cheney noted, the "new normal" - a reality for an indefinite period of time. Even if radical Islamism is utterly defeated and discredited, the U.S. will still be threatened by global plagues, still be vulnerable to crippling cyber-attacks, and still fall prey to small bands of highly motivated fanatics intent on using advanced weapons toward devastating ends.

The Nation State cannot simultaneously protect against these new threats while offering cradle-to-grave assurances of material well-being. For the fiscal solvency of our nation, one or the other has to give. And since the State's core, irreducible function is the physical security of its citizens from external harm (as opposed to their material security), the responsibility for the later must be shifted to the citizen. The Nation State must cede ground to the Market State.

Conservatives who grumble about "big government" are therefore off the mark. The absolute size of the government - what it reaps in tax receipts - will stay constant, and probably grow (indeed, Bobbitt argues that the power and reach of the executive branch must ultimately be expanded and empowered to act with even fewer restraints if it is to ward off new dangers). It is the priorities of said government - how the money is dispersed - that have to change and radically.

The Rubber Meets the Road

When viewed in this light, Bush's domestic proposals are essentially aimed at mid-wifing the Market State into existence. Bush is proposing to steer many of the welfare state's commitments (to retirement, to health care) back to the individual, freeing the government to concentrate on safeguarding the country from a myriad of new dangers. But will increasing the government's commitments to social welfare, as Bush is practically proposing, ultimately enable the government to curtail those same commitments down the road? Once fed, will government fast or become more rapacious? Is Bush even sincere in his desire to redirect government toward the Market State model, or is it all just a Rovian ploy to buy off core voting blocs, an act of fiscal recklessness of a peace with the expansion of Medicare - an act that ignores the long-term economic impact in favor of the short term electoral gain.

Only time, and a second Bush term, will tell. What won't change is the imperative driving the need for a Market State. President Bush or President Kerry and their 2008 successors will be starring down the same abyss: the threats of the 21st century cannot be met with the government of the 20th. To meet the challenge, the President will have to ensure that each citizen has the opportunity to achieve material prosperity and the financial means to safeguard their wealth, health and retirement, while the government directs its energies to warding off the dangers of a new world.

One thing is certain: it will take an act of supreme political cunning to deftly cut-loose the ballooning baby-boom generation from the money it has and continues to promise itself. Is Bush that cunning?

He's been misunderestimated before.

Gregory Scoblete is a senior editor at TWICE Magazine (This Week in Consumer Electronics) and a contributing writer to Digital Photographer and Camcorder & Computer Video magazines. He is the author of the forthcoming e-book Ten Quick Steps Guide to Great Digital Photography. He writes regularly about technology and politics at


TCS Daily Archives