Selling-off State assets has resulted in an increasing role for private companies and corporations in countries undertaking this hollowing-out, and this has been promoted further by the politics of austerity that has been promoted since the crash of 2008. The ideology of market competition and economic efficiency have been used to push back traditional areas of government and public policy intervention and remove basic utility provisioning from the public sector (e.g. electricity, water, transport, housing). In all areas ‘the market’ and corporate managerialism are meant to be better.

Part of this approach is then to replace government with governance. This initially sounds more democratic and has promised large efficiency gains and public expenditure savings, but in fact this plays out in different ways. Managing service provision, such as health care, through contracted-out providers requires network coordination and can involve high transaction costs. Instability arises as providers are regularly changed on the basis of cost-cutting exercises seeking the lowest bidder for service provision. Quality control then becomes problematic. Holding private sector players to account requires that they are regulated, monitored and policed. Reliance on competition in markets that are not at all competitive, and typically run by powerful oligopolies, means an increasing, not diminishing, role for regulation. There is then considerable room for exploitation by rent seeking private sector players if that regulation fails to materialise. The desire of the private sector for increasing rates of return contrasts with public service provision. Problems arise where rent extraction takes over from quality service provision (e.g. high rental rates for old people’s homes milking-off ‘profits’ while cutting back on staff, their wages and the basic services provided to the pensioners). Public-private building projects, such as hospitals, can result in the public purse paying rent endlessly to the private partner for a building, rather than merely once for the construction. In all these respects, a short-term gain can be seen as being bought at the expense of a long term loss for the public purse.

Driving these changes from government to governance is a model of the individual as a consumer, and all services as being products to be sold to the consumer. Government and the public sector (e.g. civil service) is then caricatured as corrupt, inefficient and bad at providing what the consumer wants. Yet the institutions of law and government are a necessary requirement for any market economy to operate. Markets are notoriously inequitable and those at the top (if left to themselves) can cream-off vast amounts of money, while shifting social and environmental costs on to others. This raises questions as to how society should be constructed and who should be in control of resource allocation, production and what is consumed? What should be the role of the citizen, elected official, politician, businessman, corporation and so on?

Once power struggles are brought forward the role of different groups and actors in society becomes self-evident. Society is no longer a collection of individuals but rather an emergent property of human interactions through institutions. This means the institutions of governance become highly important. The role of law in regulating society is prominent here, but there are also a range of informal institutions helping coordinate human activity which help avoid or control conflict on a daily basis.

That people hold different values and ethical positions means institutions for articulating values are necessary and means of peacefully resolving differences are required. Problems arise when the institutions of governance are seen to be failing to address problems in society, e.g. environmental crises, social inequity, human rights. This raises the question of when should civil disobedience take place and under what circumstances can it be justified, e.g. fighting oppression, opposing harm of the innocent. Similarly, is there a legitimate role for the police, judiciary, intelligence services or armed forces and if so what is that role and when should it be allowed to operate and when should it be restricted or removed?