Hybrid Rule and State Formation

Shelley Hurt, Ronnie Lipschutz, Shelley Hurt, Ronnie Lipschutz

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317614623
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

Neoliberalism has been the reigning ideology of our era. For the past four decades, almost every real-world event of any consequence has been traced to the supposedly omnipresent influence of neoliberalism. Instead, this book argues that states across the world have actually grown in scope and reach.

The authors in this volume contest the view that the past three decades have been marked by the diminution of the state in the face of neoliberalism. They argue instead that we are witnessing a new phase of state formation, which revolves around hybrid rule—that is, a more expansive form of state formation that works through privatization and seeks pacification and depoliticization as instrumental to enhancing state power. Contributors argue that that the process of hybridization, and hybrid rule point towards a convergence on a more authoritarian capitalist regime type, possibly, but not necessarily, more closely aligned with the Beijing model—one toward which even the United States, with its penchant for surveillance and discipline, appears to be moving.

This volume will shed new light on evolving public-private relations, and the changing nature of power and political authority in the 21 st century and will be of interest to students and scholars of IPE, international relations and political theory.

Part I

Analytics

1 Bringing politics back in

Shelley L. Hurt and Ronnie D. Lipschutz

Our hybrid economy, part free enterprise and part governmentally controlled, will take on a new form constituting a virtual Social-Industrial Complex by 1990, this developing government-business teaming greatly influenced by resource and technology matters.

Dr. Simon Ramo, White House Conference on the Industrial World Ahead, 1972

At the turn of the 20th century, neoliberal ideology seemed ascendant, and an avalanche of articles and books predicted that the state would be swept away by globalization, technological change, and growing corporate power. Yet, the state and state power not only endured but expanded. How has the state endured and expanded its power even as it privatized many functions? We deploy the concept of hybrid rule to explain the state’s resilience. Most analyses deploy a static, zero-sum understanding of state power and the state’s relationship with private actors. In contrast, the hybrid rule approach presented in this chapter stresses on-going processes of state formation—not all of which strengthen state power—and shows how the state can use delegation to private actors of certain public functions to magnify its control over society and its ability to shape social outcomes.¹ The hybrid rule approach shows how neoliberalism cloaks the aggrandizement of state power that Simon Ramo predicted and promoted over four decades ago, well before neoliberalism existed as a label for a coherent philosophical outlook.

We argue that a clearer understanding of the causes and effects of privatization requires a much more nuanced approach to political power, to the power of the state and, in particular, to the power of the American state during the past forty-plus years. The conventional wisdom of neoliberalism as the dominant view in explaining privatization policies is misleading because it privileges economistic explanations above all else. By contrast, we see national security considerations as a core driver of privatization policy since the early 1970s. We do not claim that national security is the exclusive rationale for our explanation of privatization policies; however, we challenge the omission of national security in any serious study of privatization in American and world politics. The common thread running throughout the past four decades of privatization policies, and the outcome we call hybrid rule, centers on political elites’ desires to restore state power and authority, and in particular, the power and authority of the American state in support of a distinct American social order at home and abroad. Privatization, or as we prefer to see it, delegation to the private sector, was a crucial element in efforts to restore state power in the face of political, economic, and societal challenges of the 1960s.

This chapter moves through three sections that lay out this core claim. The first section defines hybrid rule and the process of hybridization to argue that our alternative causal account provides researchers with an opportunity to bring politics back in when analyzing the causes and consequences of privatization policies within democratic society. The second section provides our causal account of change during the past four decades by revisiting the historical origins of privatization in the United States. The final section offers our approach to debates on the state by examining the intellectual inspirations that frame our analysis. In Chapter Ten of this volume, we call for a new research agenda in this area, arguing that the emergence of hybrid rule represents an inflection point in state formation with implications for global governance, democracy, and human betterment at stake.

Hybrid rule as a source of state strength: bringing politics back in

Hybrid rule opens a conceptual lens for understanding a political phenomenon that remains surprisingly understudied. To reiterate our definition:

Hybrid rule results from a set of practices deployed by political elites that rely on the private sector to shield national security activities by expanding state power while constraining democratic accountability. This hybrid rule strategy seeks to safeguard the state’s legitimacy through valorization of the market as a primary mechanism in pursuit of myriad political objectives.

We propose that a thoroughgoing investigation into these practices, alongside their attendant outcomes, is essential for constructing an alternative narrative about one of the most significant developments in world politics in the contemporary era. We expand upon these definitional boundaries by outlining our causal account of the rise of privatization policies in response to the legitimacy crisis of the 1960s below.

Legitimacy crisis as cause of hybrid rule’s emergence

During the 1960s, a political legitimacy crisis emerged, one regarded as threatening the social order as well as the political elites who sought to preserve the status quo. This legitimacy crisis altered the perception of political elites about whether the American state, Western Europe, Japan and many other nations could exercise sufficient capacity to achieve national goals in a highly volatile and ever-shifting political, economic, and social climate. These profound challenges to the social order arising from the Cold War, Vietnam, and growing global economic competition generated a palpable fear among political elites that the executive branch might lose its ability to conduct national security affairs, a fear that motivated political elites to devise innovative paths for securing the prerogatives of the executive branch without stirring a restless and disgruntled public. Indeed, privatization policies began at this critical juncture to insulate national security issues from democratic accountability and oversight (see Hurt chapter). Hence, we argue that a major aspect of privatization policies has been overlooked and misunderstood—given a reliance on neoliberalism as the explanatory framework, which privileges economistic explanations—stemming from an historical emphasis on the accumulation crisis of the 1970s rather than the legitimation crisis of the 1960s. In turning toward a political explanatory framework to account for the rise of privatization policies, with our emphasis on the legitimation crisis, we bring politics back into this important topic of debate.

While the notion of a legitimacy crisis in the 1960s and 1970s is well known, we link our analysis to that made by Jürgen Habermas, especially his older works, such as The Structural Transformation of the Public Sphere (1962), Toward a Rational Society (1968), and Legitimation Crisis (1973), in which he noted the numerous disruptions beset by industrial capitalism’s influence on modernity’s shape and direction (Habermas 1995). Our reliance on the Habermasian formulation of a legitimacy crisis stems from his recognition of the systemic nature of this pivotal moment in the postwar era. In particular, we highlight his emphasis on the dark side of modernity’s quest for rationalization, which can slip dangerously close toward forms of political domination,² a Weberian reference that addresses the shifting nature of authority once modernity comes of age. Habermas tried to understand the deep-rooted sources of the crisis, noting that elites sought to remake politics as they confronted the newly empowered middle classes, who arose in the economic prosperity boom following WWII. Significantly, these elites also confronted rebellious professionals especially the nation’s scientists and academics that resisted continued participation in a war-prone system. With American and European youth joining the fight, political elites recognized the growing instability of the status quo.

Hence, Habermas argued, in this moment of political volatility, that the threat of perpetual contingency and uncertainty in advanced societies must be minimized to restore political authority: “The fundamental function of world-maintaining interpretive systems is the avoidance of chaos, that is, the overcoming of contingency. The legitimation of orders of authority and basic norms can be understood as a specialization of this ‘meaning-giving’ function” (Habermas 1975: 118). Consequently, we argue, political elites re-imagined the private sector’s relationship to public authority anew by drawing upon the material and ideational dimensions of the private sector to deflect state responsibility away from democratic mechanisms of accountability and to insulate state power from charges of illegitimacy. This dialectical interplay of push and pull with the private sector offered political elites an opportunity to accomplish domestic and geopolitical goals with renewed vigor.

Our approach

In particular, our focus on the national security dimensions of privatization as a core feature and primary assumption of hybrid rule stands apart from the existing literature debates, including those that have come before. Within the international relations literature, a number of prominent scholars have engaged with questions about privatization and its implications at home and abroad (Stanger 2009; Abrahamsen and Williams 2010; Verkuil 2007). In particular, a number of scholars have noted the implications of privatization for democratic accountability and the fundamental role of political elites. As long ago as 1987, Paul Starr argued that privatization enhanced political power as much as it potentially constrained it:

Privatization does not transform constraint into choice; it transfers decisions from one realm of choice—and constraint—to another. These two realms differ in their basic rules for disclosure of information: the public realm requires greater access; private firms have fewer obligations to conduct open proceedings or to make known the reasons for their decisions … . Privatization diminishes the sphere of public information, deliberation, and accountability-elements of democracy whose value is not reducible to efficiency. If we are to respect preferences, as conservatives urge that we do, we ought to respect preferences for democratic over market choice where they have been long and consistently demonstrated.

(Starr 1987: 132)

Starr’s insights about the pressing, yet overlooked, issue of democratic accountability, suggest an early recognition of the perils of economic rationales for privatization. Along similar lines, Harvey Feigenbaum and John Henig point out the curious avoidance in the literature of the political when evaluating privatization policies, noting, “privatization is an intensely political phenomenon and ought to be analyzed as such” (Starr 1988: 6–41; McAllister and Studlar 1989; Braithwaite 2005). They go on to criticize the literature for its limited focus, which “deemphasizes its consequences for political ideas and political institutions and instead presents it [i.e. privatization] as a pragmatic adaption of well-tested administrative techniques or a necessary exercise in economic adjustment to structural constraints” (Feigenbaum and Henig 1994: 186). We build upon these insights in highlighting the political and national security rationales for privatization policies while stressing the costs to democratic practices of oversight.

In furthering our understanding about the political perils of privatization, Béatrice Hibou proposed that privatization represented a “new modality for producing the political” and an indirect “method of government,” cautioning scholars who study privatization’s impact within developing countries to broaden their conceptualization of that phenomenon (Hibou 2004: 3, 4, 45). Arguing forcefully, Hibou shows that “Privatisation should not be interpreted as an advance of the liberal strategy … . [In Africa and elsewhere] the private sector remains tied to state power.” In breaking free from the zero-sum view of private vs. public power that dominates the literature, Hibou insists scholars pay attention to another possibility: “Privatisation corresponds not so much to a decline of the public to the advantage of the private as to a new combination of the public and private, and continued exercise of state power and of the political.” Her insights go a long way toward illuminating the political dimension of privatization.

Others have noted the active role of political elites in the process. For instance, in their analysis of public and elite support for the efforts of the Thatcher government, Ian McAllister and Donley Studlar argue that “Privatization is a policy which did not emerge because of popular demands among voters; rather, privatization was a product of elites who saw it as one remedy for Britain’s economic ills, and as an electoral asset” (emphasis added) (McAllister and Studlar 1989: 174). The critical question to be addressed, therefore, is not so much who appears to be “empowered” by privatization but, rather, what are the authoritative effects of empowerment through privatization? How does hybrid rule, through privatization, enable the state and its agencies to pursue policies and paths that support continued domination by political elites as well as secure political legitimacy for states and governments? Finally, how does privatization concentrate governmental authority in newfound ways through the state’s penetration and harnessing of the private sector?

As we seek to make clear, hybrid rule is, first and foremost, a political project, one that serves the interests of both the state and its elites, who are concerned primarily about maintenance of an environment beyond democratic accountability and control. By deploying the private sector in myriad novel ways in the 21st century, states are able to generate a strengthened capacity to accomplish their goals while resisting much, if any, accountability to the electorate. Even when elections are contested, and even validated by outside observers, there are clear limits to democracy and the expansion of the electoral franchise. The political stakes of hybrid rule demonstrate the uncomfortable possibility of restoring something akin to the feudal sovereign’s absolute right and authority to eavesdrop on, secretly apprehend and even assassinate persons deemed “dangerous,” with qualification of that term being quite elastic (see Lipschutz, in this volume). More broadly, hybrid rule illustrates the exercise of political power, not only in a coercive or instrumental sense but also in the ways in which hybrid rule shapes institutions, practices and activities. Here, we draw on more nuanced understandings of power, as developed by a number of scholars over the past several decades, including Susan Strange, Michael Mann, Michel Foucault, Pierre Bourdieu, Kenneth Boulding, Steven Lukes, and others. In particular, power flows through various social and political channels and, as Foucault put it, serves to constitute particular relations among people for establishing “political authority and legitimacy” (sometimes these arrangements are called “hegemony” or “governmentality”) (Foucault 2003: 229–245).

Resetting the clock: privatization’s new timeline and the rise of hybrid rule

What are the actual historical origins of the privatization effort? Why did senior U.S. policymakers turn to the private sector during one of the most volatile periods in American history? And why do the answers to these questions matter? In our resetting of the clock to account for the rise of privatization in this chapter, we argue that this policy change first appeared more than forty years ago in response to the legitimation crisis that began during the 1960s, which the United States and its allies experienced quite dramatically. Across the political spectrum, worldwide protests and social movements gathered steam, culminating in the events of 1968, shaking the existing political order to its core. In response to social upheaval and turbulence, Richard Milhous Nixon was inaugurated in 1969 on a platform of peace abroad as well as law and order at home. In full recognition of the threats to the social order faced by a troubled monetary and capitalist system, a war seemingly without end, an enduring Cold War competition, and an unraveling of the existing cultural fabric, policymakers initiated a series of policies that would slowly, yet imperceptibly, acquire a life of their own.

The seriousness of these culminating and converging threats led Daniel P. Moynihan, counselor to the president for urban affairs, to write a lengthy and detailed memorandum to President Nixon on November 13, 1970 about the present crisis facing the country.³ The first out of four “propositions” Moynihan discussed in this classified memo centered directly on the legitimacy crisis:

1 The primary problem of American society continues to be that of the eroding authority of the principal institutions of government and society.

You will recall that in a long memorandum I sent you before the Inauguration I argued that the challenge to the legitimacy of our institutions and the processes associated with them was then the primacy issue facing the nation. It seems to me it has continued to be such, and that this situation is not likely to change. In one form or another—from calls for “law and order” on the Right to demand for revolutionary change on the Left—the central theme of American politics at this time is that our institutions are failing.

By the 1970s, policymakers responded to the legitimation crisis by moving numerous government responsibilities subject to public disclosure requirements into the private sector. In so doing, the domestic public as well as leaders and publics abroad were prevented from gaining access or knowledge about certain, potentially controversial, public policies. These policy shifts of governmental authority and oversight from the public to the private sector, rather than restricting state power, actually enhanced it.

These shifts came to be categorized by several different terms. The public administration literature trace the terminological genealogy of privatization and public–private partnerships to a new political organization type begun in the United States in the late 1960s, ca...