CAPITALISM has not been significantly weakened by the crises that erupted in 2007 and those that are currently manifesting themselves in the form of threatened sovereign defaults in the EU.

Unemployment is high; global trade imbalances potentially unsustainable; and distributional inequities larger than ever. Recovery is anemic even in the US. Yet, no serious challenge to the global capitalist order has appeared anywhere in the world.

The fundamental cause of capitalism’s continued global dominance is related to politics and morals, not economics and technology. Capitalism’s claim to be a uniquely rational and natural way of life is grounded in the claim that the rule of its law provides the best institutional framework for governing a well ordered society.

Capitalism’s claim to be a uniquely rational and natural way of life is grounded in the idea that the rule of law provides the best institutional framework for governing a well-ordered society

Today, virtually no one challenges this assertion, be it communists, libertarians, nationalists or mainstream political Islamists. Hence, there are no alternative governance visions. Communists, libertarians, Islamists and nationalists all swear by the rule of law and by democracy.

As Lenin famously pointed out in his pamphlet ‘The State and Revolution,’ “democracy provide(s) the best possible political shell of capitalism”. This is so because political democracy masks market dictatorship. As capitalist — i.e. corporate — property destroys private property, labour becomes ‘the starting point of capital’.

The individual labourer has no realistic option but to accept the work contract forced upon him by the management. As the market colonises society, this managerial dictatorship is presented by the media, universities, courts and parliaments as a Kantian/Habermasian ‘command of reason’. The worker becomes an agent of capitalism and accepts as necessary and rational his subordination in the workplace for achieving capitalism’s goals: freedom and progress. For freedom and progress are also the goals pursued by the capitalist labourer.

Reconciling the realm of necessity (market subjugation) with that of freedom (the constitutional republic) is the function served by the rule of law. This emanates from Rousseau’s ‘general will’ of a capitalist people (‘the nation’) endorsing freedom and progress as ‘ends in themselves’.

It is therefore not surprising that the legal form of capitalist rule (the rule of law) has the same structure as that of the commodity form that organises capitalist market transactions. The rule of law legitimises capitalist governance throughout economy and society.

Capitalist wealth takes the form of an endless accumulation of commodities, and the civil society takes the form of an increasing accumulation of legal claims and obligations. Both commodity and sociopolitical relationships assume the social dominance of capitalist individuality.

The individuals who contract legal and commodity relationships are conceived as autonomous (self-determined) and egotistic utility maximisers. Such an individual is presumed to have the right to dispose of his property as he pleases, as theorists from John Locke to Evgeny Pashukanis have stressed that all human and social rights recognised in constitutional republics emanate from the right to own capitalist property.

The rule of law is a governance framework for recognising equal rights of all autonomous utility maximizing individuals to dispose of their property (including their bodies) as they please. Pashukanis writes: “the succession of subjects linked together by claims on each other is the fundamental legal fabric which corresponds to the economic fabric”. In the market, the subjects of capital exchange commodities in the constitutional republic with the subjects of capital exchange rights.

In this fundamental sense, the rule of capital requires the rule of (capitalist) law. The legal framework reflects the systemic interests of capitalist order — the pursuit of efficient accumulation as an end in itself, and the continuous reproduction of self-determined utility maximising (i.e. capitalist) individuality.

The constitutional republic appears as a guarantor of the capitalist order. Legal ideology represents capitalist subjectivity as universal and objectifies its relationships into ‘normal’ and ‘rational’ social practices. Those who do not internalise these practices are treated as ‘homo sacer,’ i.e. someone who may be killed but not sacrificed.

The constitutional republic exercises a monopoly of the use of violence, but this violence can never be directed against capitalist property. Apparent social neutrality and impersonal adjudicatory mechanisms enhance the legitimacy of the rule of law. The rule of law and the rule of capital are both predicated on the basis of fairness, reasonableness and equivalence, as defined by the enlightenment epistemology and institutionalised in capitalist contracts.

Capitalism rules by contract. In societies where the commodity form is generalised through the universalisation of waged labour, coercion is not usually necessary for sustaining the rule of capital. In such societies, almost everyone — labourer, manager, man, woman, Muslim, atheist — perceives themselves to be a subject of capital. The rule of law serves the vital function of transforming the homo sacer — the subject of God — into the subject of capital. That is why, in times of crises, capitalist rule is strengthened by extending the scope of the rule of law, i.e. democracy.

As Slavoj Zizek and Alain Badios have recently pointed out, anti-imperialist movements such as those led by Raul Castro and Hugo Chavez may not constitute a threat to the global capitalist order, and will eventually be accommodated within it. This is because they are committed to constitutional republicanism, the rule of law, and the ideals of capitalism, freedom, anti-equality. Such strategies can transform market capitalism into state capitalism. They cannot transcend capitalism.

The homo sacer, literally translated as ‘sacred man,’ stands outside the rule of law. He repudiates capitalist values like freedom and progress. He rejects constitutional republicanism. His appearance can pose an existential threat to the global capitalist order.

The concept of ‘homo sacer’ first appeared in early Roman Law, and was used to legitimise the persecution of Christian activists and martyrs. European, especially Russian, 19th century anarchists can also be seen as secular homo sacers. Both appearances posed an existential threat to the social order in which they emerged. The rule of law thus justifies the use of extralegal state violence against communities suspected of harbouring homo sacers and thus posing a threat to the rule of law.

Homo sacer is to be distinguished from the national liberation militant. The typical liberation movement, whether nationalist or communist, does not reject the capitalist ideals of freedom and progress. And when national liberation movements come to power, they do not typically pose a threat to the global capitalist order and are integrated within it in various forms.

National liberation movements struggle against capitalist injustices, but they usually endorse both capitalist values (freedom and progress) and capitalist governance mechanisms (constitutional representative democracy).

The writer heads the Centre for Development Studies, IoBM Karachi

Published in Dawn, Economic & Business, September 8th, 2014