Britain has recently experienced extensive flooding, especially in the South of the country and, as with many other things I have discussed on the blog – most recently cricket – this has political and organizational dimensions. Politically, one big debate has been about whether the flooding is linked to climate change and if so whether climate change is man-made. Organizationally, a big debate has been about whether the Environment Agency has done enough to prevent or alleviate flooding.
The Environment Agency might itself be a case study of the manifold failures of the New Public Management that I have written about before. Created in 1995 it replaced various expert bodies deemed to be ‘inefficient’, and, when the floods started, was in the process of a radical downsizing to make it more ‘efficient’ still.
But I want to concentrate on a sideshoot of this debate, namely the way it reveals something about how markets and states inter-relate. It is notable how – in a similar way to my post on the Philippines disaster – when a crisis occurs there is no talk of market solutions. There have been no entrepreneurs touring flood-ravaged areas competing to offer sandbags at the cheapest price! No, it is to the State that people look. But beyond this, the business costs of flooding – for example in terms of lost sales when shops are flooded out – underscore how the market depends upon state provision of infrastructure.
That however, is the minimum. More extensively, it is abundantly clear that the state is vital not just for the basic needs of business but is the key driver of innovation. Mariana Mazzucato’s excellent recent book The Entrepreneurial State documents this in detail, and it well worth a read. It completely demolishes the neo-liberal idea that for commercial innovation to flourish the State has to get out of the way. The opposite is true.
Neo-liberalism both as an economic doctrine and a public management approach is daily falsified by mounting evidence of its failure – although it is rare for the instances of this failure to be connected together. Yet it continues, zombie-like, to hold sway (see pp 124-25 of the book), as Colin Crouch’s book, The Strange Non-Death of Neo-Liberalism, analyses.
The worst-flooded areas are Southern rural communities and affluent commuter towns, so it’s a fair bet that many of those affected will have been precisely those voters who most enthusiastically support the small State. That’s not meant to imply a lack of sympathy, just the recognition of a growing irony. For it has been the electoral supporters of neo-liberalism who have increasingly suffered its effects. Not just in terms of inadequate flood management caused by New Public Management, but in terms of the job security, job quality and pension rights that an ‘entrepreneurial State’ brings and a neo-liberal State eviscerates.