Capitalism versus territorialism in state formation

Capitalism and territorialism as defined here, in contrast, do represent alternative strategies of state formation In the territorialist strategy controls over territory and population is the objective, and control over mobile capital the means, of state- and war-making. In the capitalist strategy, the relationship between ends and means is turned upside down: control over mobile capital is the objective, and control over territory and population the means. This antinomy implies nothing concerning the intensity of coercion employed in the pursuit of power through either strategy. As we shall see, at the height of its power the Venetian republic was simultaneously the clearest embodiment of a capitalist logic of power and of a coercion-intensive path to state formation. What the antinomy does imply is that the truly innovative aspect of the process of formation of the Venetian state and of the system of city-states to which Venice belonged was not the extent to which the process relied on coercion but the extent to which it was oriented towards the accumulation of capital rather than the incorporation of territory and population. 

The logical structure of state action with regard to territorial acquisition and capital accumulation should not be confused with actual outcomes. Historically, the capitalist and the territorialist logics of power have not operated in isolation from one another but in relation to one another, within a given spatio-temporal context. As a result, actual outcomes depart significantly, even diametrically, from what is implicit in each logic conceived abstractly.

Giovanni Arrighi, The Long Twentieth Century, 2010, Verso.

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