The state-market nexus
Tuesday, 24 July 2007
Hasan Mahmud
AN analysis of the emergence and functions of the welfare state also makes explicit the state-market nexus. In the course of democracy, the most vibrant mass mobilisation has been achieved with the emergence of welfare state. The idea behind the spectacular popularity is the fact that the state assumes responsibility for welfare provisions for all the citizens. This in turn bolsters the legitimacy of the nation state in the age of declining community-based organisations. People need services that are usually produced collectively and nearly impossible to manage individually, for example community health care, education, social justice, etc.
Therefore, they must depend on some kind of organised production and distribution of these services at the community level. Declining community life caused by modernisation engenders a feeling of insecurity with regard to these welfare provisions, and thus people become ensconce when the nation state takes up that responsibility.
Commonly a welfare state is defined by taking responsibility for securing some basic modicum of welfare for its citizens. Instances can be cited here about government subsidies in public health, education, agriculture, infrastructure, transport and communication, etc. These services have become so common throughout the world that people consider these as their fundamental rights as citizens. But this view narrows down the scope of welfare state by stressing only on spending which is misleading. Considering the interplay among the activities of the state, the market and the family, there are at least three different clusters of welfare regimes. First, the liberal welfare state that follows the strict work-ethic norms where services are stigmatised and benefits are small. It encourages the market and shifts welfare provisions in the market.
Thus it erects a stratification between equally poor who depend on the state and others who depend on the market. The US and the UK fall within this camp where much of the welfare provisions are delegated to the market and people have to spend for those, for example healthcare facilities are completely commoditised in these countries and only those within health insurances programmes are supplied with healthcare services.
The second is corporatist welfare state that preserves the social class and status. It depends on the state in place of the market for welfare provisions, but also renders some responsibilities on the family. Germany and France belong to this group where the state offers welfare services according to individuals' social position and thus makes it necessary to seek the unsatisfied portion of such services from the family.
Finally, the social democratic model that -- keeping aside the dualism between the market and the state, between the working class and middle-class -- offers an equality of the highest standards, as opposed to the minimal needs pursued by the formers. Here the state assumes all responsibility for welfare of all its citizens, and thus allowing emancipation from both the market and the family through a fusion of welfare and work.
What is evident in this analysis of the emergence and functions of different clusters of welfare state is that all have been engaged in creating and promoting a middle-class the major role-player in the national economy.
From the above discussion on how polity influences national economy in times of adjustment, transition and change, it has become obvious that the role of the state is not declining in the face of the domination of neo-liberal paradigm which considers state's intervention in the market as detrimental to general welfare. Instead, the state has gained substantial weight in managing economic life of its citizens in the era of welfare capitalism. Moreover, one form of the welfare regime -- 'social democracy' -- has been proved efficient in providing social justice for which neo-liberalism claims state's retreat from the market.
Therefore, it seems necessary to reconsider the economic policy of the government in Bangladesh. The unprecedented price-hike, emanating from an unwanted tumultuous period of transition, has allowed the greedy 'homo-economicus' businessmen to free-ride over the market, and thus individual profit maximisation. But this causes sufferings for most people who have to live on their limited income. At the same time, the state-led anti-corruption campaign has demolished the petty business settings -- developed on government land without proper permission -- in local markets which roots out the small businessmen in most rural areas. In the metropolitan areas, the small businessmen and hawkers are also driven away from their regular business-spaces due to illegal occupation of government property and the footpaths. Besides, the closing down of the state-owned labour-intensive jute industry has exacerbated the plight of the working class people.
All these incidences call for an immediate intervention by the state so as to rescue them from the most awkward predicament. The sheer size of these population amounts over 10 million of low-income businessmen and workers who have lost their livelihood recently. If they do not find any support from the state, this will certainly diminish the state's legitimacy, and it is not unlikely that a destructive fume blasts from the periled mass as we have already experienced piecemeal in many parts of the country.
The writer is a Monbusho Scholar in the Global Studies Programme, Sophia
University, Japan and
may be reached at
'[email protected]' Concluded
AN analysis of the emergence and functions of the welfare state also makes explicit the state-market nexus. In the course of democracy, the most vibrant mass mobilisation has been achieved with the emergence of welfare state. The idea behind the spectacular popularity is the fact that the state assumes responsibility for welfare provisions for all the citizens. This in turn bolsters the legitimacy of the nation state in the age of declining community-based organisations. People need services that are usually produced collectively and nearly impossible to manage individually, for example community health care, education, social justice, etc.
Therefore, they must depend on some kind of organised production and distribution of these services at the community level. Declining community life caused by modernisation engenders a feeling of insecurity with regard to these welfare provisions, and thus people become ensconce when the nation state takes up that responsibility.
Commonly a welfare state is defined by taking responsibility for securing some basic modicum of welfare for its citizens. Instances can be cited here about government subsidies in public health, education, agriculture, infrastructure, transport and communication, etc. These services have become so common throughout the world that people consider these as their fundamental rights as citizens. But this view narrows down the scope of welfare state by stressing only on spending which is misleading. Considering the interplay among the activities of the state, the market and the family, there are at least three different clusters of welfare regimes. First, the liberal welfare state that follows the strict work-ethic norms where services are stigmatised and benefits are small. It encourages the market and shifts welfare provisions in the market.
Thus it erects a stratification between equally poor who depend on the state and others who depend on the market. The US and the UK fall within this camp where much of the welfare provisions are delegated to the market and people have to spend for those, for example healthcare facilities are completely commoditised in these countries and only those within health insurances programmes are supplied with healthcare services.
The second is corporatist welfare state that preserves the social class and status. It depends on the state in place of the market for welfare provisions, but also renders some responsibilities on the family. Germany and France belong to this group where the state offers welfare services according to individuals' social position and thus makes it necessary to seek the unsatisfied portion of such services from the family.
Finally, the social democratic model that -- keeping aside the dualism between the market and the state, between the working class and middle-class -- offers an equality of the highest standards, as opposed to the minimal needs pursued by the formers. Here the state assumes all responsibility for welfare of all its citizens, and thus allowing emancipation from both the market and the family through a fusion of welfare and work.
What is evident in this analysis of the emergence and functions of different clusters of welfare state is that all have been engaged in creating and promoting a middle-class the major role-player in the national economy.
From the above discussion on how polity influences national economy in times of adjustment, transition and change, it has become obvious that the role of the state is not declining in the face of the domination of neo-liberal paradigm which considers state's intervention in the market as detrimental to general welfare. Instead, the state has gained substantial weight in managing economic life of its citizens in the era of welfare capitalism. Moreover, one form of the welfare regime -- 'social democracy' -- has been proved efficient in providing social justice for which neo-liberalism claims state's retreat from the market.
Therefore, it seems necessary to reconsider the economic policy of the government in Bangladesh. The unprecedented price-hike, emanating from an unwanted tumultuous period of transition, has allowed the greedy 'homo-economicus' businessmen to free-ride over the market, and thus individual profit maximisation. But this causes sufferings for most people who have to live on their limited income. At the same time, the state-led anti-corruption campaign has demolished the petty business settings -- developed on government land without proper permission -- in local markets which roots out the small businessmen in most rural areas. In the metropolitan areas, the small businessmen and hawkers are also driven away from their regular business-spaces due to illegal occupation of government property and the footpaths. Besides, the closing down of the state-owned labour-intensive jute industry has exacerbated the plight of the working class people.
All these incidences call for an immediate intervention by the state so as to rescue them from the most awkward predicament. The sheer size of these population amounts over 10 million of low-income businessmen and workers who have lost their livelihood recently. If they do not find any support from the state, this will certainly diminish the state's legitimacy, and it is not unlikely that a destructive fume blasts from the periled mass as we have already experienced piecemeal in many parts of the country.
The writer is a Monbusho Scholar in the Global Studies Programme, Sophia
University, Japan and
may be reached at
'[email protected]' Concluded