Notes in Circulation # 4

Political scientist John Mearsheimer has been getting a lot of attention following the Russian invasion of Ukraine. While his realist view (in the social scientific sense rather than the literal sense) has been picked apart by Smolenski and Dutkiewicz, it is understandable why it might be popular right now with any one who has a bone to pick with the US and NATO. Blaming the US and NATO for the Russian invasion of Ukraine, as Mearsheimer does in a recent interview, sits well with the Government of Pakistan’s story that it has adopted an “independent” foreign policy, refused to bow to the US or broadly speaking Western pressure, and is hence maintaining a neutral stance over on the matter of the Russian invasion of Ukraine.

But there is another idea in the Mearsheimer interview which stood out to me as relevant to developments in Pakistan: “Military might is built on economic might. You need an economic foundation to build a really powerful military.” This idea, on the face of it, does not seem very problematic or controversial. But it is not self-evident, and it should be questioned and cannot be taken for granted. Its opposite — that there are economic gains to be found in the capture and control of external markets using military might — is not just a well known theory (see Rosa Luxemberg on “Militarism as a Province of Accumulation”) but arguably an important historical fact (hint: colonialism). Military might may very well be built on, among other things, economic might (although it remains a problem for champions of Pakistan’s nuclear capabilities to explain how this particular case of military might is possible even though the country is economically impoverished). But that is almost besides the point. The issue is that it is a tempting jump from “military might is built on economic might” to “therefore a military should concern itself with the economic management of a country”. This leap is even more problematic than the proposition that economic might is the sole foundation stone of military might. This is the leap or jump which the traditional security apparatus in Pakistan has made in the NSP document. It appears to be at the foundation of the subsuming of Pakistan’s economic management by the traditional security apparatus.

But this leap is in fact counter-productive for the evolution of the economy. An economy needs breathing room and room to expand. Control (military or otherwise, but especially by militaries) can lead to anxiety and can quickly turn into a chokehold on the free spirit of enterprise as society becomes less free and open. This is a problem because open societies are better for innovation and business. The entrepreneurial spirit – which is central to the flourishing of economies and to which so many pay lip service today – is incredibly averse to being controlled. Economist Joseph Schumpeter, who gave us a very good description of the character of the entrepreneur in his Theory of Economic Development ([1934] 1983), helps us understand why. It is because the entrepreneur has “the dream and the will to found a private kingdom, usually, though not necessarily, also a dynasty.” Second, they have “the will to conquer: the impulse to fight, to prove oneself superior to others, to succeed for the sake, not of the fruits of success, but of success itself.” Third, they are motivated by “the joy of creating, of getting things done, or simply of exercising ones energy and ingenuity.”

To understand the relevance of Schumpeter’s characterization of the entrepreneur, we have to consider another important work of social science. Sociologist Peter Evans has argued in Embedded Autonomy: States and Industrial Transformation (1995) that the autonomy of a state to create and implement industrial policy is embedded in (1) state’s external relations with society, and (2) the state’s internal coherence. (For my present argument I will disregard the second). State-society relations can be characterized on a spectrum of types, with the two poles being developmental and predatory. Now, given the non-controversial claim that the citizen’s levels of confidence and trust in the Pakistani state are low, I would conjecture that — and I am yet to talk to someone who disagrees with me on this — state-society relations in Pakistan cannot be characterized as developmental. If state-society relations in Pakistan are predatory, it would help explain why the entrepreneurial spirit has not flourished a great deal. But it would also tell us why in such a context the cause of the entrepreneur ought to be championed: in the face of a state which is clearly not developmental, entrepreneurs are radicals. [“Startups are brave to operate in Pakistan — because the govt really doesn’t get them”]

But regardless of the need for room to breathe, you do need control and management in an economy as well, without which you cannot protect capitalism from its inherent, self-destructive tendencies. This is also the problem about which Keynes was writing in the early twentieth century: how do we exercise control and manage an economy on the one hand without letting it capitalism run completely free and wild, and on the other without succumbing to authoritarianism? This gets us into the specific form of control. Authoritarian control is not the only kind. There is such a thing as democratic control, and this brings us back to the character of Pakistani democracy, which is on display today for all to see with a political crisis threatening to become a constitutional one as the Prime Minister struggles to remain in office.

Encouragement of entrepreneurs and tech start-ups is necessary but insufficient. Anyone interested in anticipating Pakistan’s economic future must figure out what the character of Pakistan’s political sphere is. In particular, where do power and sovereignty lie in the national political sphere? This is the key, because political culture and the location of sovereignty are crucial in shaping the evolutionary path of the economic sphere. (See Frank Dobbin’s Forging Industrial Policy (1994).) Observers of Pakistan’s political economy should expect, I think, Pakistan’s economic evolution in the foreseeable future to be consistent with the effectiveness (or lack thereof) of ideas and vision articulated in the NSP document.

[The quotes from the Schumpeter book are from the end of Chapter II: The Fundamental Phenomenon of Economic Development.]