Markets as politics

Market-driven Politics - Neoliberal Democracy and the Public Interest by Colin Leys; Verso, London, 2002; 12.99.

IN India, as elsewhere, followers of the debates on globalisation will be well aware of a recent surge of books associated with the anti-globalisation movement. These explore how corporate brands have reshaped consumption and culture (Naomi Klein's No Logo), how they have infiltrated the state (Noreena Hertz's Silent Takeover: Global Capitalism and the Death of Democracy) and how they have also consumed political parties and refashioned them in their own image (George Monbiot's Captive State).

Colin Leys, scholar of African development and of British politics and co-editor of the Socialist Register, has entered the fray on behalf of a socialist alternative with an investigation of the response of national politics to global economic forces. Though he uses the experience of Britain for this project, his story spans the world and is of relevance worldwide. The book moves its lens systematically from the global system towards the detail of rapidly proliferating real markets. Leys peers through two keyholes to see the politics involved in the penetration by markets of areas of society that were formerly ring-fenced for non-market forms of provision and values. The two cases are public service broadcasting and health care; both of which were once regulated in distinctively British ways but are now being privatised and commercialised in ways that are only too familiar worldwide.

Leys starts where most critics of globalisation leave off. The economy is replacing society as the subject of politics. In low-intensity democracies (the phrase is Samir Amin's), ruling parties find it increasingly difficult to direct the terms on which governments regulate the economy, though there are conditions under which some do it better than others. Their politics is driven by corporates which operate not nationally but globally. Leys has a wealth of evidence with which he fleshes out this profoundly political process (globally in chapter 2 and in Britain in chapter 3). He asks, "how do states get voters to endorse policies which meet the demands of capital? How do states pull off the theft of sovereignty from their citizens? How are markets to be naturalised and democratic politics to be insulated from demos?" This book answers such questions and shows how and why the market (or economics) cannot be removed from politics.

There is a general logic to the process: capital must expand. "Accumulate, accumulate, accumulate! That is Moses and the prophets!" proclaimed Karl Marx. Capital expands in many ways, some are primitive (resources are seized by force, peasants shoved off the land) while others are sophisticated and carefully planned (the seething life cycles of products and their substitutes). Markets appear to slither into households (domestic service) and out again ('DIY' (do-it-yourself), but read the book, for DIY is not what it seems). Markets proliferate (markets for derivatives, markets for advertising, for management consultancy, legal advice, repairs...).

Leys follows markets expanding into the non-market public sphere. This is the arena for public goods, for national culture and for democratic expressions of citizenship. The novel insight that powers Leys' analysis of market-driven politics is as follows. For markets to take over, four political conditions have to be achieved. First, public services have to be broken down into sets of private commodities (hip replacements, laundering, current affairs programmes popular with advertisers...) each of which can be supplied at (more or less) known prices. Secondly, needs and delights have to be reworked into effective demand that can be expressed through purchasing power alone. Thirdly, workers with collective values and a public service vocation have to be transformed into profit-makers on less secure terms. Lastly, business requires and usually gets the risks of this transformation to be underwritten by the state. Those remnants of public services that cannot be completely abolished will be left as services of the last resort.

After this first phase looks like being successful, the general dynamic starts to grind; the costs of labour can be reduced; less specialised labour may be shed and components may be subcontracted to cheap sites. Products will be standardised for scale economies and a mass market. 'Flexible production' usually masks a standardised technological core. All other labour and all other costs will be transferred to consumers. (And the buck stops with women.)

Private contractors do not have to be efficient to notch up rates of profit that will be attractive to shareholders. Public resources will be transferred to retain poorly functioning private firms up to the point where the costs of maintaining an inefficient status quo exceed those of exposing deficiency or delinquency, together with the transactions costs of replacing the contract.

There is a great wood and trees problem in understanding the politics of this process. Unlike the textbook models of markets, every single real market has its own unique features. Individual cases then enable us to see some of the common features of this process. Leys does not make the case that each of the four conditions has a distinctive politics. Instead he shows the roles of lobbies, of personal networks of influence, of political funding, of the infiltration of political parties, of the state and institutions of global regulation, of the resourcing of partisan research and think tanks, of the interested peopling of advisory councils and public boards. Their purposes, in a spectacular denial of conflicts of interest, are to weaken public regulation in relentless cycles of pressures for incremental change, to weaken enforcement and/or quality standards (but to apply them selectively to disadvantage public services), to weaken sources of resistance and stoke support, to restrict public capital and current expenditure, to restructure the sources of public revenue, to claim risk-minimising contracts with residual state providers, to present the transformations of service into commodities, supply and demand as a 'technology' transfer and abolish the concept of public service. In both broadcasting and health conglomerates diversified, concentrated and differentiated; pay became spectacularly more unequal, product quality was shaped by commercial interests and residual services deteriorated and were rationed. New labour politicians, whose parties are increasingly funded by corporate interests, operate in centralised and 'depoliticised' ways that take them away from the electorate, unions and activists and enable them to naturalise markets, audit and de-democratise the state.

At a time when British Prime Minister Tony Blair has called public service unions 'wreckers', Colin Leys shows just who the real wreckers are. He argues that public services are a key aspect of a democratic society; they express such a society's collective interests and help shape it at the same time. There is never no alternative. Public services can be provided in many ways, from voluntary work, through non-profit trusts to state provision. These can be more efficient - not simply in terms of costs but also in the quality of outcomes - than are firms dominated by short-term shareholder interests. Leys indicates what is to be done: public services need a clear philosophy that is publicised, celebrated and funded through taxation. They need practical policy, encouraging innovation and dynamism where it can be justified on public service grounds. They need active political protection and defence from the constant attempts to invade, which 'markets', aka capital, are bound to make.

This is a richly researched, well-structured, beautifully written, and compellingly argued book, and one which offers an original analysis of the hegemonic politics of markets. It could not be more relevant to our times. Buy this book, but do not add it to the gently groaning shelf. Keep it much closer to hand. It is very relevant to India.

Barbara Harriss-White is Professor of Development Studies in the University of Oxford.