Social Scientist. v 20, no. 224-25 (Jan-Feb 1992) p. 29.


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SUKUMAR MURALIDHARAN*

Structural Adjustment and the State:

From Consent to Coercion

The role of the State in a market society can be understood in terms of two conceptual dualities. The first of these is that of 'reciprocity* and 'redistribution'. A market economy is sustained by the process of 'free' commodity exchange, which presumes a measure of reciprocity. But strict reciprocity obviously fails to provide even a semblance of social equity, particularly in the exchange of labour power for wages. This is a fact that Adam Smith—the putative founder of liberal political economy—clearly recognised.1 Yet, being firmly committed to the doctrine of free market liberalism. Smith saw no help for this situation.

Adam Smith was unwilling to countenance any form of public intervention in the working of the market. But this stand owed more to his position in the polemical battles of his time, which pitted him against the mercantilist school of State interventionism. Smith was by no means a vulgar apologist for a market society, as has been made out by contemporary liberal economists. He was on the contrary, acutely aware of the harsh inequities of such a society, and his belief in a providential 'invisible hand' was inspired more by supernatural faith than by scientific observation.2

The changing exigencies of market society saw State intervention gaining a measure of legitimacy in the post-World War II liberal economic consensus. Yet this redistributive role of the State had strictly defined outer bounds. It is a truism that bears repetition, that the market society is one based on private property in the means of production, and that property is a political and legal right, and not an object.3 'Property' in other words, is a right that bestows on the title-holder a pre-emptive claim to the material output of society. Distribution in a market society—or in other words, the relative material entitlements of various sections of society—is determined by this structure of property relations, which imposes the outer bounds to any redistributive action by the State.4

This brings up the second of the conceptual dualities that would help in understanding the role of the State in a market society—that

^Journalist, based in Delhi

Social Scientist, Vol. 20, Nos. 1-2, January-February 1992



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