State and Globalization
Excellence is not in perfection but in harmony. This old dictum holds true in the context of the theory and praxis of state versus market dichotomy. Too much of everything becomes counterproductive. Accumulated quantitative changes give rise to qualitative changes. The laissez-faire individualism of the classical liberal era led to the growth of industrial capitalism in the 19th century with its insistence on minimalist state oversight and free trade. Excessive individualism and liberalism flourished at the cost of equity, justice and social harmony. To cope up with these problems, the 'visible hand' of the state was truly made visible. In Western democracies, it was done through the New Deal and welfare. In socialist democracies, it was done in the name of socialism and in the developing countries through democratic socialism with emphasis on state-led rapid planned development. State intervention did help in controlling the situation. However, in the long run, excessive state intervention - particularly in the post-Second World War period, in the name of welfare or socialism - created a case for liberalization, privatization, and globalization. This led to the retreat of the state and the ascendancy of the market. Unrestrained market ascendancy has again precipitated global financial crises, necessitating the revival of state intervention. To overcome the cyclical process of change, the Greek wisdom suggested the avoidance of extremes and the integration and harmonization of the good features of various institutional arrangements. This book examines the need for an actual harmony between the state and market.
Publication Date: 6/1/2010