The man at the top had tough words to say. The shortfall of more than £1 billion (US$1.84 billion) was unacceptable and there would need to be changes to ensure greater productivity, smarter procurement and greater workforce efficiency. A leading company under pressure from a gaggle of restless shareholders? No, this was the boss of the UK's state-funded National Health Service (NHS) Ian Carruthers, arguing in his chief executive's report last week that the NHS had to reform in order to provide better value for money.
Carruthers' remarks are important. Don't imagine for a moment that this is just about hospitals losing control of their budgets: The comments reflect a change in the nature and role of the state driven by the dictates of globalization and individualism.
Governments that accept, as the one in the UK does, that globalization should be embraced have no choice but to accept that the state must change as well. As far as British Prime Minister Tony Blair is concerned, the flipside of welcoming the takeover of the British Airports Authority (BAA) by a Spanish company is that the NHS has to look at its bottom line; the same pressures apply to both the public and the private sector. Make no mistake, this has big political consequences.
Philip Bobbitt, in his book The Shield of Achilles, talks about globalization leading to the replacement of the nation state by a "market state," characterized by a dependency on "the international capital markets and, to a lesser degree, on the modern multinational business network to create stability in the world economy, in preference to management by national or transnational political bodies."
The nation state saw its job (even though it didn't always do it terribly well) as looking after the welfare of the people and ensuring full employment; the market state seeks to maximize opportunity and sees employment as simply another economic variable.
Bobbitt is right to see a clash between these two visions of the state. French President Jacques Chirac would block any foreign bid for Charles de Gaulle airport, not just because he would rightly have doubts about whether France would benefit in terms of higher growth or greater efficiency as a result of the change of ownership, but also because he believes in a model of the state that intervenes to defend the national interest. Chirac's vision comes from an age (and a successful age it was) when politicians thought it was their duty to tame capitalism, because only by regulating capital flows and maintaining demand could they achieve the economic and social goals they had set for themselves.
This model had a different language. It talked about security from cradle to grave, about protection, about people being safe. The language of the market state, predictably, is the language of the market. It is about bottom line, throughput, innovation, opportunity and competition.
The left in Britain was comfortable with the old nation-state model, not least because the left was instrumental in creating it.
Between 1850 and 1950 there was a gradual erosion of free-market capitalism through a variety of policy reforms (factory acts, education bills, old-age pensions, unemployment insurance, progressive taxation), and that culminated in Labour's post World War II settlement.
RSS