The State, the Market and Civil Society

26 October 2014 07:48 pm - 0     - {{hitsCtrl.values.hits}}

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Civil society groups protesting for media freedom

 

It was interesting to read a news item in this paper a few days ago reporting that a new UNP government would deviate from neo-liberalism and move in the direction of a socially regulated market economy.


Many others and I have written extensively in the columns of this paper emphasising the need for social regulation of the market. This is not an issue just for Sri Lanka but for almost the whole world where unregulated markets have played havoc creating great uncertainties and instabilities not just in the lives of ordinary people but in global financial markets, etc. Social regulation of course is not the same as political manipulation for short term political gain.
Modern societies are faced with the challenge of balancing the State -market and civil society equation. Any serious imbalance in this equation can be counterproductive from a systemic point of view. The rise and expansion of the State at the expense of the market and civil society can only lead to authoritarianism that can severely impede individual initiative, private enterprise, human freedoms and civic action to address economic, social and cultural issues.


When the market and the State create conditions inimical to human well-being, people naturally turn to civil society groups to come to their aid. But, civil society groups also consist of people, who often have the same human frailties shared by many politicians and business people. So, some of them are as capable of serving themselves and their families at the expense of the hapless people whom they claim to serve.


So, the lesson is that we need all three in some balance and being accountable to one another. But, those who are preoccupied with one tend to underestimate the importance of the other, largely due to their own biases. So, when there is an imbalance, it creates problems for the wider society.


It is true that the governments in many countries are not responsive, accountable, transparent and effective in addressing the problems faced by citizens. But, some might argue that it is possible for people to turn to civil society organisations to find solutions to their problems, be it developmental or welfare. Such a situation creates opportunities for many people to come forward as Good Samaritans and pretend to fill the void left by an ineffective the State. But there is not a single country in the world where civil society groups have become an effective substitute for the State, besides the fact that State is potentially democratic and broadly representative of diverse ideas and interests of citizens. While no civil society organisation, no matter how large and well-funded it may be, can be as pervasive as the State in terms of its outreach, uniformity and presence, it would be virtually impossible for civil society organisations to serve the entire population in a cost-effective manner. Any systemic and objective evaluation of civil society interventions would reveal this reality.


On the other hand, it would be erroneous to assume that the State can solve all the problems faced by all segments of society in an exhaustive manner. There can always be issues and groups that are overlooked by State institutions. These residual issues and groups need to be identified and addressed and civil society organisations are well suited to do so. In the same breath it would be ridiculous to expect civil society organisations to take over important functions of the State such as healthcare provision, supplementary feeding or poverty alleviation.


And finally, there are no market solutions to all the problems that different groups of citizens face. Moreover, market is not the most optimal mechanism to deliver certain commodities and services. In other words, there is a need to manage certain goods and services outside the market in order to ensure their equitable distribution across different social groups. In some cases, it may be desirable to build partnerships across the State the market and civil society to produce and deliver certain commodities and services. In others, it might be necessary to have a clear division of labour between the State, on the one hand and the market and civil society on the other.


Human societies across the world have considerable accumulated experience with regard to the functioning of states, markets and civil society. This experience is mixed and shows that each one is critically important for the optimal functioning of societies both in their own rights as well as in their various combinations. None is perfect and each needs the other to play a corrective role. Given the fact that the State has the potential to be the overarching, collective apparatus subject to democratic control by the wider population, it could potentially represent the broader collective interests of the citizens. On the other hand, the market as well as civil society often represent competing and even conflicting interests of diverse segments of society, and therefore, need to be guided by a moderating influence to ensure the collective well-being of citizens in terms of their diverse needs, both material and non-material. For instance, the inequalities that markets generate cannot be overlooked by the State because such inequalities are not only unjust but can give rise to forces such as criminal gangs that threaten public order. Neo-liberal policies implemented in different countries across the world over the last several decades unleashed market forces in an unprecedented manner. The result has been impressive economic growth in many countries. But, economic growth in largely unregulated markets has also resulted in unprecedented concentration of wealth in the hands of a few, while many struggle to cope with rising inflation and cost of living.

Private consumption has increased rapidly over public consumption, even in the social sectors like health and education in many countries. Population mobility due to economic pressure, both within and across countries is clearly unsustainable and unhealthy and creates serious distortions in the labour markets, besides giving rise to other social issues. These and many other developments need to be managed through sound public policies and well–designed State interventions. The failure of the State to effectively deal with the consequences of market distortions, due to various reasons can create the false impression that it is civil society that should step in, creating opportunities for various people to champion the cause of the poor and the marginalized. Civil society interventions by and large cannot be an effective response to the ravages of the market. Yet, in the absence of an effective and credible response on the part of the State, many could propagate the illusion that the State can take a backseat while civil society can take care of the problems of the people. But the lived experience of the ordinary people can be far removed from the picture that glossy reports of many non-governmental organisations periodically submit to their patrons. This of course is not to under-estimate the vital advocacy role that civil society organisations play and the significance of their contribution to addressing residual issues that the State institutions often overlook due to various circumstances.

 

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