In this chapter we distinguish between direct and structural forms of power. We relate these to the concepts of hegemony, historic bloc and the ‘extended’ state, in our analysis of present-day capitalism. In so doing we seek to meet two major challenges. The first is to integrate better ‘domestic’ and ‘international’ levels of analysis. The second, related challenge, is to theorise the complementary and contradictory relations between the power of states and the power of capital.

Unlike Classical Marxists, who emphasise instrumentalism and economism of the Classical Marxists, some contemporary Marxists take their inspiration from the ethical rationalism of Antonio Gramsci. Gramsci's (1971) concept of hegemony differs from the orthodox Realist usage. The latter refers to the dominance of one state over other states and is largely a case of what we call the direct exertion of ‘power over,’ in the sense used by Max Weber. For Gramsci, hegemony was a concept used to analyse the relation of forces in a given society. A hegemonic order was one where consent, rather than coercion, primarily characterised the relations between classes, and between the state and civil society.

The concept of the state used in Gramsci is an ‘extended’ and integral one, which reflects the fact that, under certain conditions (for example in Anglo-Saxon countries) there was often an organic fusion between state and civil society (Gramsci, 1971: 12).