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November 9, 2008 / C H Thompson

Theories of the state (New Right)

11_45_4-vote-conservatives-labour-or-liberal-democrats_webNew Right thinkers have questioned the advancement of the states involvement in capitalist societies. The phrase ‘nanny state’ is often banded around by Conservative politicians as meaning the state pokes its nose too much into the lives of ordinary citizens. For New Right thinkers the state should be ‘rolled back’ and the free market left to coordinate society rather than the state intervening so much.

New Right thinkers question the value of so much state welfare and instead prefer the state to encourage self-reliance instead of welfare dependence. By rolling-back the state people will have greater individual freedom and by paying lower taxes people will be stimulated to make society far more dynamic, competitive and efficient.

Key names in the New Right (neo-liberal) perspective are Milton Friedman and Peter Bauer. They both emphasised laissez-faire economic policy, otherwise known as a free market economy. In Capitalism and Freedom, Friedman argues the existence of a free market does not eliminate the need for government. On the contrary, government is essential both as a for deciding the rules of the game but as an umpire overseeing the rules are played correctly. Such a process reduces the issues politicians have to get involved with because the free market co-ordinates society so well. It gives people what they want instead of what a particular group thinks they want.

Friedman position was governments should only get involved with four areas of the economy:

  • Defence
  • Law and Order
  • The provision of the necessary public works that private enterprise doesn’t find profitable
  • Protection from members of the community who ‘cannot be regarded as responsible individuals.’

Peter Bauer advocated additional responsibility’s for government

  • Health and education
  • The management of monetary and fiscal (tax/spending) system

In essence Friedman and Bauer’s free-market economy does not eliminate the need for government it simply ‘rolls it back’ to a minimum because the production, distribution and trade of goods and services is best left to private profit making firms rather than public government (state run) organisations. In other words business should be free of government interference to do as it wishes as ‘exchange can bring about co-ordination without coercion. A working model of a society organised through voluntary exchange is a free enterprise exchange economy’ (Friedman). These principles were famously adopted by Mrs Thatcher who started introducing free market economic policies in education – 1988 Education Reform Act – marketization of education.

Noam Chomsky’s book Profit over People, 1999, argues that neo-liberal economics has reduced the power of ordinary people to influence government policy as it has merely served to increase the wealth and power of unelected executives of corporations. Chomsky points out reducing the role of the state (and its size) restricts its capacity to improve or assist vulnerable people in society. Therefore reduced state involvement, reduces the power of the state to shape society according to its wishes (state centred theorists) or the wishes of the people (pluralist state theory).

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