From Public Provision to Privatisation: The Crisis in Welfare Reassessed

Abstract

Privatisation policies, pursued by a government informed by neoclassical economic theory and intent on `rolling back the frontiers of the welfare state', have been widely criticised as turning the tide against both the `welfare state' and `welfare' more broadly. The policy to privatise public industries and services is, in effect, both an employment and wage policy: the intention is to govern, not simply the general type of service provision but also, the method of wage determination itself. The argument in this paper is that the privatisation strategy is the culmination of, rather than a digression from, post-war policies in the public sector concerning wage determination. In arguing that privatisation represents the culmination of public sector wage policies in the post-war period, it is being suggested that privatisation denotes the most categorical statement and extension of successive policy developments promoting the salience of so-called `market' principles in the determination of wages. It is contended, furthermore, that the legitimacy of and increasing emphasis given to criteria such as efficiency and productivity in the name of `economic necessity', has been cultivated as a result of the power given to economic, as against social explanations, rather than emanating from any intrinsic `economic' logic.

Political and social research concerning the privatisation of public services, though often highly critical of the Government's philosophical and economic beliefs, nevertheless has perpetuated and ultimately reinforced these beliefs by failing to challenge fully the principles underlying the privatisation agenda. The privatisation debate is premised upon the assumption that `the logic of the market' provides a salient description of the overall process occurring. I would suggest that this needs to be reconsidered and an alternative conception established to further our practical and analytical understanding of the processes observed.