State and Not-State

In a 1991 essay in the American Political Science Review, Timothy Mitchell assesses various theories of the state, concluding that they all attempt to draw a line between state and society, and fail. He proposes to take the very difficulty of drawing that boundary as the starting point for reflection, rather than as a theoretical problem to be solved.

He begins to develop his own conception with this examine from twentieth-century US history:

“After World War II, the Saudis demanded that their royalty payment from Aramco [Arabian American Oil Company] be increased from 12% to 50% of profits. Unwilling either to cut its profits or to raise the price of oil, Aramco arranged for the increase in royalty to be paid not by the company but by U.S. taxpayers. The Department of State, anxious to subsidize the pro-American Saudi monarchy, helped arrange for Aramco to take advantage of a loophole in U.S. tax law whereby the royalty was treated as though it were a direct foreign tax, to be paid not from the company’s profits but from the taxes it owed to the U.S. Treasury.”

Mitchell makes his point mildly: “This collusion between government and oil companies, obliging U.S. citizens to contribute unaware to the treasury of a repressive Middle Eastern monarchy and the bank balances of some of the world’s most profitable multinational corporations, does not offer much support for the image of a neat distinction between state and society” (89).

Not much, no. Twenty-five years later we may add another layer to the outrage: How much of that money ended up funding the spread of Wahhabi Islam? To what extent does US oil money fund the terrorism that we then send Americans into the desert to stop?

(Mitchell, “The Limits of the State: Beyond Statist Approaches and their Critics,” APSR 85:1 [1991]: 77-96.)