Where should we draw the boundaries of the state? When should Government take responsibility for providing or funding services? And when should it be left to the market to sort out? One characteristic of the current government is that it has destabilised well-established understandings of where the boundaries lie. Most prominently we have the debate over higher education funding. But there are a range of other fields – including social care, rail pricing, school sports, arts funding and library provision – where central or local government is stepping back from funding and/or provision. While the financial crisis is typically invoked as the trigger for this, there is more than a suspicion that this can act as a handy pretext for furthering an agenda of state retrenchment, leaving more to the market, the voluntary sector or informal provision.

From the point of view of economists interested in social policy and social problems this is intriguing. Many economists who concern themselves with such matters tend to operate from a social liberal or social democratic position – they tend to favour a mixed economy and acknowledge a significant role for the state, if only in funding rather than provision. This is in part because they are a self-selecting group. The dyed-in-the-wool market fundamentalists don’t tend to spend too much time thinking about the role of the state. Rather, they tend to assume that Milton and the Public Choice boys have put that particular question to bed – the state should keep well away from just about everything. Continue Reading →