Law, Social Policy, and the Constitution of Markets and Profit Making
| DOI | http://doi.org/10.1111/j.1467-6478.2013.00616.x |
| Author | Kenneth Veitch |
| Date | 01 March 2013 |
| Published date | 01 March 2013 |
JOURNAL OF LAW AND SOCIETY
VOLUME 40, NUMBER 1, MARCH 2013
ISSN: 0263-323X, pp. 137±54
Law, Social Policy, and the Constitution of Markets and
Profit Making
Kenneth Veitch*
This article explores the relationship between law, society, and economy
in the context of the contemporary British welfare state. Drawing on
themes in Polanyi's The Great Transformation, it identifies the constitu-
tive role of contemporary social policy and law in the creation and
maintenance of markets and opportunities for the private sector in the
field of welfare, focusing on the institutional mechanisms being put in
place to encourage this. What emerges is a reformulation of the function
of the welfare state and related law, as these are no longer
predominantly driven by a logic of social protection via redistribution
to those in need, but increasingly reflect the state's desire to create
openings for the private sector within welfare. The institutions that once
contributed to ensuring the embeddedness of the market economy in
society now play an important role in processes of disembedding ± with
potentially detrimental consequences for those seeking assistance from
the welfare state.
INTRODUCTION
Social policy and related legislation present an opportunity to consider
fundamental issues of law, economy, and society and, importantly, the
interplay between them. As such, they form fertile subjects for engaging with
an economic sociology of law. In recent years, however, there has been a
tendency in some academic literature to treat them as if they were distinct
entities. The standard analysis and critique of neoliberalism, for instance,
conceptualizes the development of the so-called self-regulating market as
137
ß2013 The Author. Journal of Law and Society ß2013 Cardiff University Law School. Published by Blackwell Publishing
Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
*Sussex Law School, School of Law, Politics and Sociology, Friston
Building, University of Sussex, Falmer, Brighton BN1 9SP, England
K.J.Veitch@sussex.ac.uk
I thank the organizers of the workshop on `Towards and Economic Sociology of Law' ±
Amanda Perry-Kessaris, Diamond Ashiagbor, and Prabha Kotiswaran ± and Scott Veitch
for their helpful comments on a previous written draft of this article.
demanding a corresponding diminution of the social or welfare state. The
result is that the social and the economic appear in conflict with each other,
with the economic sphere being viewed as unable to function properly where
the social persists.
1
This article challenges this portrayal of neoliberalism by
exploring the connections between law, economy, and society. Specifically,
it identifies the constitutive role of contemporary law and social policy in
creating and maintaining markets and opportunities for profit making within
the welfare sector.
2
In one sense, social policy has always been bound up with questions and
problems of economy. The welfare state illustrates this vividly. Thus, through
discharging its core function of protecting citizens against the economic and
social risks of capitalism, welfare institutions indirectly assisted the capitalist
mode of production. For instance, publicly funded health care and education
benefited employers by ensuring a flow of healthy, knowledgeable, and
skilled workers. What can be witnessed today, however, is a more direct role
for social policy and related legislation in supporting capital ± something that
has implications for assumptions surrounding the traditional functions of the
welfare state. Via a focus on recent developments and reforms within health
care and unemployment policy and law, the article develops an analysis of the
types of institutional mechanisms that are being deployed to facilitate the
implementation of this more direct role of social policy and law.
In order to frame the discussion and analysis, the article draws on some
themes and concepts from a work that has to a degree inspired the develop-
ment of economic sociology and the nascent economic sociology of law ±
namely, Karl Polanyi's The Great Transformation.
3
Two specific features of
Polanyi's work render it useful in the present context. The first is his idea of
the embeddedness of the market economy in society and social relations; the
second is the stress he places on state intervention as an indispensable element
in the construction of markets. Those features of his work provide a
conceptual framework through which to reflect on the important changes in
the roles of current social policy and law. On the one hand, it allows for a
focus on their constitutive functions in respect of markets and opportunities
for profit making for the private sector within the field of welfare.
Specifically, it directs us to consider the types of institutional mechanisms
± including the forms of law and social relations ± that have, and are being,
138
1 See, for example, D. Harvey, A Brief History of Neoliberalism (2007).
2 The article is therefore in keeping with literature that stresses the centrality of the
state and social relations to the development, maintenance, and success of markets
and neoliberalism. See, for example, N. Fligstein, The Architecture of Markets: An
Economic Soci ology of Twenty -First-Cent ury Capitalist Societies (20 02); L.
Wacquant, `Thr ee Steps to a Histor ical Anthropolo gy of Actually Exi sting
Neoliberalism' (2012) 20 Social Anthropology 66; and P. Bourdieu, The Social
Structures of the Economy (2005).
3 K. Polanyi, The Great Transformation: The Political and Economic Origins of Our
Time (2001/1944).
ß2013 The Author. Journal of Law and Society ß2013 Cardiff University Law School
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