Neo-liberalism, which was supposed to replace grubby politics with efficient, market-based competition, has led not to the triumph of the free market but to the birth of new and horrid chimeras. The traditional firm, based on stable relations between employer, workers and customers, has spun itself out into a complicated and ever-shifting network of supply relationships and contractual forms. The owners remain the same but their relationship to their employees and customers is very different. For one thing, they cannot easily be held to account. As the American labour lawyer Thomas Geoghegan and others have shown, US firms have systematically divested themselves of inconvenient pension obligations to their employees, by farming them out to subsidiaries and spin-offs. Walmart has used hands-off subcontracting relationships to take advantage of unsafe working conditions in the developing world, while actively blocking efforts to improve industry safety standards until 112 garment workers died in a Bangladesh factory fire in November last year. Amazon uses subcontractors to employ warehouse employees in what can be unsafe and miserable working conditions, while minimising damage to its own brand.
Instead of clamping down on such abuses, the state has actually tried to ape these more flexible and apparently more efficient arrangements, either by putting many of its core activities out to private tender through complex contracting arrangements or by requiring its internal units to behave as if they were competing firms. As one looks from business to state and from state to business again, it is increasingly difficult to say which is which. The result is a complex web of relationships that are subject neither to market discipline nor democratic control. Businesses become entangled with the state as both customer and as regulator. States grow increasingly reliant on business, to the point where they no longer know what to do without its advice. Responsibility and accountability evanesce into an endlessly proliferating maze of contracts and subcontracts. As Crouch describes it, government is no more responsible for the delivery of services than Nike is for making the shoes that it brands. The realm of real democracy — political choices that are responsive to voters’ needs — shrinks ever further.
Politicians, meanwhile, have floated away, drifting beyond the reach of the parties that nominally chose them and the voters who elected them. They simply don’t need us as much as they used to. These days, it is far easier to ask business for money and expertise in exchange for political favours than to figure out the needs of a voting public that is increasingly fragmented and difficult to understand anyway. Both the traditional right, which always had strong connections to business, and the new left, which has woven new ties in a hurry, now rely on the private sector more than on voters or party activists. As left and right grow ever more disconnected from the public and ever closer to one another, elections become exercises in branding rather than substantive choice.