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barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, clean water, computer age, Corn Laws, creative destruction, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, full employment, George Santayana, global village, hiring and firing, Howard Rheingold, income inequality, informal economy, invisible hand, Jane Jacobs, Joseph Schumpeter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Marshall McLuhan, mass immigration, McJob, microcredit, moral panic, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pensions crisis, Ronald Reagan, Silicon Valley, spinning jenny, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population
As the last chapter argued, the dematerialisation of value means the economically efficient scale of government has changed, and it has become increasingly clear that national governments cannot manage the national economy as effectively as they have in the past. Even so, the failure of mainstream politicians to acknowledge that the world is a different place has handed those in favour of free markets and a minimal, night watchman state easy victories. For there is no question that in an increasingly weightless world, with a dramatic increase in the scale and scope of uncertainty, markets play an essential role. There is no possibility of corporatism, of management from the centre of the national economy. Free markets send crucial price and demand signals, and in effect devolve decision-making to the most dispersed level possible.
She must operate mainly in the social economy, where she ‘trades’ services like child care and helping people who have similar businesses to hers. The nanny state we still have makes life extraordinarily difficult for people like Jennie because it was designed for a fixed world of male, full-time work, which has been consigned to the dustbin of history. The rules cannot accommodate the new, flexible pattern. The night watchman state would respond by shrinking the tax and benefit net to the point where it did little to influence people’s choices. The teacher state might, on the other hand, The Weightless World 214 encourage every individual, regardless of their marital status, sex or source of income, to save for their pension by offering tax relief on incomes paid out of their personal retirement plan in old age.
The Establishment: And How They Get Away With It by Owen Jones
anti-communist, Asian financial crisis, bank run, battle of ideas, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, British Empire, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, centre right, citizen journalism, collapse of Lehman Brothers, collective bargaining, don't be evil, Edward Snowden, Etonian, eurozone crisis, falling living standards, Francis Fukuyama: the end of history, full employment, G4S, glass ceiling, hiring and firing, housing crisis, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, James Dyson, laissez-faire capitalism, light touch regulation, market fundamentalism, mass immigration, Monroe Doctrine, Mont Pelerin Society, moral hazard, Neil Kinnock, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, old-boy network, open borders, Plutocrats, plutocrats, popular capitalism, profit motive, quantitative easing, race to the bottom, rent control, road to serfdom, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, stakhanovite, statistical model, The Wealth of Nations by Adam Smith, transfer pricing, union organizing, unpaid internship, Washington Consensus, wealth creators, Winter of Discontent
‘I think that smaller-scale governments, more freedom for business to exist and to operate – that is the right kind of direction,’ he explains to me in the IoD’s grand headquarters on London’s Pall Mall, ‘and I don’t doubt that there needs to be a residual government functioning of maintaining law and order, enforcing contracts, but to me that’s what government ought to be about.’ It is reminiscent of the ‘night-watchman state’, a term coined by the nineteenth-century German socialist Ferdinand Lassalle to describe the vision of his own laissez-faire contemporaries: a state with the most limited of functions. Despite shades of moderation and radicalism, the British Establishment’s governing ideology is consistent. The state is a bad thing, and gets in the way of entrepreneurial flair. Free markets are responsible for growth and progress.
According to the National Audit Office, a whopping 50 per cent of the public sector’s £187 billion spending on goods and services is now spent on contracting out, highlighting just how far the privatization of the state has gone.18 For the free-market libertarian, the state should provide little other than internal and external defence. But neo-liberal dogma has gone far beyond even the so-called ‘night-watchman state’. Even the British bobby is up for sale. In 2012, Lincolnshire police signed a £200 million contract with G4S, leaving half its civilian force under the control of the company. Towards the end of 2013, Avon and Somerset Police put their custody suites and prisoner-transport services up to tender, with five companies, including G4S, competing to take them over. Until the G4S Olympics debacle led them to abandon it, the West Midlands and Surrey police forces had invited a bid worth £1.5 billion from the company, which would have left private security companies patrolling the streets and investigating crimes.
accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour market flexibility, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game
The nation-state is the predominant model of government, but there are supranational arrangements too—for example, the United Nations, the European Union, and a plethora of specialized bodies like the World Trade Organization and International Telecommunications Union. There is vigorous disagreement about all aspects of these basic functions of government, about how they should be structured, about matters of detail. But even the most ardent “free marketeer” would accept the need for a minimum set of basic government functions. It’s usually referred to as the “night watchman state.” Many people, most probably, believe that rather more than the night watchman minimum is needed. In fact, once you get away from the extreme positions, there is wide spectrum of views about what the role of government should be. All other economic institutions, including markets, exist within that context. The division of work within the household is shaped by the opportunities for paid work outside, and by laws such as those banning child labor.
affirmative action, Asian financial crisis, bank run, banking crisis, bilateral investment treaty, borderless world, Bretton Woods, British Empire, capital controls, Carmen Reinhart, central bank independence, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, endogenous growth, eurozone crisis, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, labour market flexibility, labour mobility, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, price stability, profit maximization, race to the bottom, regulatory arbitrage, savings glut, Silicon Valley, special drawing rights, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey
As our conceptions of the institutions needed to support markets and economic activity have evolved over the centuries, so has capitalism. Thanks to its capacity for reinvention, capitalism has overcome its periodic crises and outlived its critics, from Karl Marx on. Looking at capitalism from the prism of the global economy, we have observed in this book how these transformations occur. Adam Smith’s idealized market society required little more than a “night-watchman state.” All that governments needed to do to ensure the division of labor was to enforce property rights, keep the peace, and collect a few taxes to pay for a limited range of public goods such as national defense. Through the early part of the twentieth century and the first wave of globalization, capitalism was governed by a narrow vision of the public institutions needed to uphold it. In practice, the state’s reach often went beyond this conception (as when Bismarck introduced old-age pensions in Germany in 1889).
Libertarian Idea by Jan Narveson
But we have to realize that state action is only one solution among others, and the fact that state action is virtually certain to be inefficient, often extraordinarily inefficient, is surely an excellent reason for considering the alternatives. A Note on the “Minimal State” Nozick argued that the only justifiable function of the State was protection of individual rights, specifically from individual violations requiring protection by the use of force. This was the “Night-Watchman State” of nineteenth-century liberalism. Earlier, we saw that the character of his 246 argument for the Minimal State would not, if it works for its main intended purpose of refuting anarchism, suffice to show that no more than the minimal state is justified. If Nozick‟s argument is in fact a species of publicgoods argument, as seems plausible, then it is worth mentioning that such arguments simply can‟t be counted on to justify no more than the Minimal State.
Winner-Take-All Politics: How Washington Made the Rich Richer-And Turned Its Back on the Middle Class by Paul Pierson, Jacob S. Hacker
accounting loophole / creative accounting, active measures, affirmative action, asset allocation, barriers to entry, Bonfire of the Vanities, business climate, carried interest, Cass Sunstein, clean water, collective bargaining, corporate governance, Credit Default Swap, David Brooks, desegregation, employer provided health coverage, financial deregulation, financial innovation, financial intermediation, fixed income, full employment, Home mortgage interest deduction, Howard Zinn, income inequality, invisible hand, knowledge economy, laissez-faire capitalism, Martin Wolf, medical bankruptcy, moral hazard, Nate Silver, new economy, night-watchman state, offshore financial centre, oil shock, Powell Memorandum, Ralph Nader, Ronald Reagan, shareholder value, Silicon Valley, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, union organizing, very high income, War on Poverty, winner-take-all economy, women in the workforce
As the great political economist Karl Polanyi famously argued in the 1940s, even the ostensibly freest markets require the extensive exercise of the coercive power of the state—to enforce contracts, to govern the formation of unions, to spell out the rights and obligations of corporations, to shape who has standing to bring legal actions, to define what constitutes an unacceptable conflict of interest, and on and on.19 The libertarian vision of a night-watchman state gently policing an unfettered free market is a philosophical conceit, not a description of reality. The intertwining of government and markets is nothing new. The frontier was settled because government granted land to the pioneers, killed, drove off, or rounded up Native Americans, created private monopolies to forge a nationwide transportation and industrial network, and linked the land settled with the world’s largest postal system.
Empire: How Britain Made the Modern World by Niall Ferguson
British Empire, Cape to Cairo, colonial rule, Corn Laws, European colonialism, imperial preference, income per capita, John Harrison: Longitude, joint-stock company, Khartoum Gordon, Khyber Pass, land reform, land tenure, liberal capitalism, Livingstone, I presume, Mahatma Gandhi, mass immigration, night-watchman state, profit motive, Scramble for Africa, spice trade, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the new new thing, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transatlantic slave trade, transatlantic slave trade, union organizing, zero-sum game
When the British governed a country – even when they only influenced its government by flexing their military and financial muscles – there were certain distinctive features of their own society that they tended to disseminate. A list of the more important of these would run: The English language English forms of land tenure Scottish and English banking The Common Law Protestantism Team sports The limited or ‘night watchman’ state Representative assemblies The idea of liberty The last of these is perhaps the most important because it remains the most distinctive feature of the Empire, the thing that sets it apart from its continental European rivals. I do not mean to claim that all British imperialists were liberals: some were very far from it. But what is very striking about the history of the Empire is that whenever the British were behaving despotically, there was almost always a liberal critique of that behaviour from within British society.
Alvin Roth, Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, Bretton Woods, Brownian motion, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, full employment, George Akerlof, Goldman Sachs: Vampire Squid, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, information asymmetry, invisible hand, Jean Tirole, joint-stock company, Kenneth Arrow, Kenneth Rogoff, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, Ponzi scheme, precariat, prediction markets, price mechanism, profit motive, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, school choice, sealed-bid auction, Silicon Valley, South Sea Bubble, Steven Levy, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Vilfredo Pareto, War on Poverty, Washington Consensus, We are the 99%, working poor
And the more you become familiar with their writings, it often only gets worse: for instance, it would be a long, thankless task to attempt to extract actual libertarian policy proposals from Friedman’s corpus—a complaint one encounters in some actual libertarian writings. They have to avert their eyes from Friedman quotes such as, “You can have a high degree of social freedom, and a high degree of economic freedom without any political freedom.”34 Strident demonization of some bugbear entity called “the government” is not at all the same as rejecting “The State” tout court.35 That is because mature neoliberalism is not at all enamored of the minimalist night-watchman state of the classical liberal tradition: its major distinguishing characteristic is instead a set of proposals and programs to infuse, take over, and transform the strong state, in order to impose the ideal form of society, which they conceive to be in pursuit of their very curious icon of pure freedom. I agree with Wendy Brown that neoliberalism became a “constructivist” project, no matter how much it was a term against which Hayek often railed.36 That neoliberalism turned out to be very nearly the polar opposite of libertarian anarchism is something that has taken a long while to sink in, but is now becoming widely accepted in circles concerned with political economy.37 That is why “neoliberalism” is not only a historically accurate designation of a specific strain of political thought, but it is descriptively acute as well: most of the early neoliberals explicitly distanced themselves from what they considered the outmoded classical liberal doctrine of laissez-faire.38 They sought to offer something newer, and less passive.
Karl Marx: Greatness and Illusion by Gareth Stedman Jones
anti-communist, battle of ideas, Berlin Wall, British Empire, colonial rule, Corn Laws, deindustrialization, Fall of the Berlin Wall, feminist movement, fixed income, joint-stock company, land reform, land tenure, means of production, New Journalism, New Urbanism, night-watchman state, On the Economy of Machinery and Manufactures, The Wealth of Nations by Adam Smith, trade liberalization, unemployed young men, wage slave
In the Middle Ages, the idea of possession of landed property had been the precondition of feudal rule and this had permeated all its institutions. That epoch ended in 1789, replaced by the supremacy of bourgeois property and the rule of capital. 1789 had been the revolution of the ‘Third Estate’. But 1848 was the revolution of the ‘Fourth Estate’. The ‘Third Estate’ had claimed to represent the claims of humanity, but in fact represented the political ambitions of the bourgeoisie, satisfied by free competition and ‘the night-watchman state’. Any claim to universality by the feudal nobility or the ‘Third Estate’ was contradicted by their sectional self-interest. The claims of the workers, on the other hand, were universal. Lassalle drew upon the Communist Manifesto (to Karl’s annoyance): workers, unlike the higher classes, had no particular privileges to defend. But what this meant was not so much that they had ‘nothing to lose but their chains’, as that workers embodied a moral as well as a material principle.