Table of Contents

The Elgar Companion to Social Economics, Second Edition

The Elgar Companion to Social Economics, Second Edition

Edited by John B. Davis and Wilfred Dolfsma

Social economics is a dynamic and growing field that emphasizes the key roles social values play in the economy and economic life. This second edition of the Elgar Companion to Social Economics revises all chapters from the first edition, and adds important new chapters to reflect the expansion and development of social economics. The expert contributions explain a wide range of recent developments across different subject areas and topics in the field, mapping out possible directions of future social economic research. Social economics treats the economy and economics as embedded in a web of social and ethical relationships. It considers economics and ethics as essentially connected, and adds values such as justice, fairness, dignity, well-being, freedom, and equality to the standard emphasis on efficiency. This book will be a leading resource and guide to social economics for many years to come.

Chapter 33: The welfare state and privatization

Robert McMaster

Subjects: business and management, business ethics and trust, economics and finance, institutional economics, methodology of economics, public sector economics, social policy and sociology, economics of social policy


That any sane nation, having observed that you could provide for the supply of bread by giving bakers a pecuniary interest in baking for you, should go on to give a surgeon a pecuniary interest in cutting off your leg, is enough to make one despair of political humanity. George Bernard Shaw, The Doctor’s Dilemma, 1911. The ‘Great Capitalist Restoration’ (Stanfield and Stanfield, 1996) from the 1970s/1980s onward is predicated upon powerful convictions centring on economic efficiency and development, and the freedom and dignity of the individual. Indeed, so powerful are these convictions that they exude the aura of conventional wisdom. The welfare state has been, and continues to be, a prominent locus for these arguments. Yet there is some ambiguity concerning the nature of the ‘welfare state’ and what is meant by ‘privatization’. It is beyond the parameters of this chapter to furnish a comprehensive account of the complexities of this contested terrain, but none the less, some attempt will be made to furnish definitions that act as entry points to the principal focus of the discussion. This relates to an aspect of the second claim noted above: dignity. Neoliberalism embeds dignity in a particular conceptualization of individual freedom. In this literature, as Sen (1993) observed, freedom-achievements are associated with welfare-achievements.

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