This paper is concerned with a functional analysis of the liberal democratic state and its capacity to actively facilitate a comprehensive socio-ecological transition to a post-fossil, low-input economic system. To what extent, I am interested to know, is the modern democratic state in the position to transform the very basis of its own existence, namely the industrial, fossil-fuelled, market-based and growth-dependent type of economy that has led to its emergence in the 19th century? To approach this question we need a thorough understanding of the structural relation between the liberal state itself and the economic system it is embedded in. The novel concept of ‘epistemic legitimacy’ (derived from recent developments in the sociology of knowledge) will be the key to a proper functional analysis of this relationship in that it reveals the core stabilising function the growth-based market economy fulfils for the liberal political order. The market economy, according to this analysis, fulfils the function of an opaque and apparently ‘autonomous’ generator of reality in relation to which the state can (and must) take a responsive, ‘managing’ position. Without this ‘quasi-transcendental’ source of reality, the system of representation would ultimately succumb to its own paradoxical nature: in a purely ‘immanent’ representative relation (as in a 'transparent' steady-state economy, for example), the state would turn into the site of irremediable conflict between the people as ‘ruler’ and the people as ‘ruled’. This perspective allows for a critical analysis of the contours and limits of a purported ‘ecological state’: while the on-going ‘ecological modernisation’ of capitalism is perfectly in line with this perspective, any structural and comprehensive transformation of the capitalist market economy that would require the state to actively determine the contours of social reality is beyond the scope of liberal-democratic agency as it has evolved to date.