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Unmasking the State

Welcome to the market state

From welfare to market state is the name of the project that Thatcher began, Blair and Brown continued and Cameron is intent on completing. The words he uses – 'choice', 'diversity' and 'freedom' – seem harmless. But the real purpose is barely disguised.

Just before he jetted off to Egypt and a tour of the Middle East with arms manufacturers in tow, the prime minister announced the plan to end the public sector as we know it. A “vital part of our mission to dismantle Big Government and build the Big Society in its place”, he announced.

'Diversity' is another warm word. But when Cameron applies it to public services, he means one thing – opening them up to “a range of providers” through competition. In other words, services delivered by the central and local state will be up for auction. Corporations, large charities and others will then compete to run them.

As Cameron acknowledged:

This is a transformation: instead of having to justify why it makes sense to introduce competition in some public services – as we are now doing with schools and in the NHS – the state will have to justify why it should ever operate a monopoly.

To say, as TUC general secretary Brendan Barber did, that the plan was simply a "naked right-wing agenda that takes us right back to the most divisive years of the 1980s" is to miss out, conveniently, what took place between 1997 and 2010 when New Labour was in office.

Not only did the former state industries like rail, gas, electricity, water and telecoms remain privatised, they were subjected to even more competition and profit making. State subsidies for public transport were run down. As a result, for example, train fares are now the most expensive in Europe.

Not only that, Blair and Brown expanded the infamous 'private-public partnership' and 'private-finance initiative' arrangements under which companies provide services with the state guaranteeing their profit margins. The value of these contracts is an estimated £90 billion a year, making private involvement in the public sector the largest in any major economy and saddling the state with enormous debt.

Now the Coalition is taking the next logical step, using the cover of the massive regulatory bureaucracy that New Labour created as an excuse for what is certain to be a feeding frenzy for capitalists desperate for new areas of profit making as the recession deepens.

All this amounts to the end of the role of the capitalist state that developed after 1945. Then its purpose was to maintain a kind of class peace, provide services and prop up British capitalism where it could. With corporate-driven globalisation from the early 1980s came a profound change.

In Britain in particular, the state’s former role lost its relevance. Global corporations and a new financial system transcended borders and became more powerful than governments. The state began to assume the task of facilitating the operations of the global economy. Deregulation was its form, especially in relation to finance. Who can forget how Brown denationalised the Bank of England in 1997 as soon as he sat down at his desk.

The harsh world of the market state that Cameron envisages will more than a throwback to pre-1945. It is more like the early 19th century, when the modern state did not exist. What will be left are the forces of repression – the police, the spy agencies, armed forces and the prison and courts system.

This begs the question as to what use a state like the present one is to the mass of people. The short answer is none at all. Its democratic side is shot through and now it denies responsibility for the welfare of its citizens. Our strategy has to be the dismantling of the market state and the transfer of political as well as economic power to the majority.

Paul Feldman
Communications editor
22 February 2011

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