Since the pandemic, there has been a growing recognition of the breakdown of our public services, from overwhelmed emergency rooms to declining literacy rates. In Social Democracy, Capitalism, and Competition, Marcel Boyer offers a provocative critique of the provision of public and social goods and services (PSGS) in social democracies and welfare states. This manifesto proposes an economic reform of traditional social democracy, integrating neoclassical economic principles with a more nuanced understanding of market failures and the need for regulation. Boyer explores the role of public policies and institutional design in complementing market forces and promoting fair competition to address social and economic challenges.
Boyer urges a rethinking of the roles of governmental and corporate sectors in the provision of PSGS. Boyer critiques traditional social democracy by arguing that increased centralization and bureaucratic control have led to crony capitalism, and created obstacles and barriers to market entry that shuts down competition. Thus, Boyer contends the problems faced by the PSGS sector are not due to lack of financial resources. Instead, these issues stem from organizational inefficiencies within the sector. He advocates a new model of competitive social democracy to address these inefficiencies, featuring two key reforms: (1) redefining the roles of government and competitive sectors, where the government focuses on designing and overseeing PSGS through incentive-based contracts with providers in the competitive sector; and (2) the development and implementation of policies to foster open and transparent competitive mechanisms for awarding PSGS contracts and encouraging the growth of competitive businesses capable of competing for these contracts. Given widespread marketization and privatization of state functions, there is nothing new in the first of these. And the second might well be applied to existing privatization and P3 arrangements, and to private sector oligopolies like telecommunications and grocery retail.
Boyer develops his argument in a number of chapters by seeking to the harmonize capitalism (understood as neoclassical economics) with social democracy (understood as regulation and social welfare). He claims that competitive social democracy and new competition-based capitalism could integrate market mechanisms more effectively with social objectives, emphasizing three interrelated areas: (1) regulation and competition to address market failures and avoid negative externalities; (2) incentive-based contracts to encourage individuals and organizations to contribute to the well-being of their fellow citizens; and (3) emphasizing efficiency and performance through outcome-oriented policies to ensure resources are effectively allocated to achieve desired outcomes. In sum, the chapters attempt to integrate social welfare objectives with individual decision-making by examining how market mechanisms and policies can be designed to achieve socially desirable outcomes without compromising individual incentives and market efficiency.
Boyer's manifesto is a robust re-statement of neoliberal economic prescriptions for public sector reform. The book does not really engage with the insights of other disciplines, nor with the large volume of evidence that market failure is widespread and, indeed, systemic. His recommendations, which he oddly describes as pragmatic and nonideological (pp. 35, 166), are placed in stark contrast to critics who are irrational, misguided or corrupt (see pp. 4, 73, 83, 153) and left-leaning activists who are simply “regurgita[ting] clichés and falsehoods about competition and markets” (p. 120). Rather than engaging with the substance of their critique, Boyer's response to other perspectives is largely dismissive, calling them fundamentally misguided and founded on ignorance and misunderstanding [of economic concepts] (see p. 153). One could argue his own claims are ideological as he reasserts that public sector provisioning is socially regressive and economically suboptimal (see chpt. 7), usefully casting aside its complexity and potential merits in favour of reproducing the neoclassical ideological public-private dichotomy. While recognizing this is a manifesto, this simplification poses serious theoretical limitations as implicit ideological assumptions limit the exploration of alternative economic models or the full spectrum of social democratic values. For example, there is a burgeoning literature on the potential dynamism of public ownership (see Marois, Reference Marois2021; McBride, Reference McBride2022) that provide valuable insights that are overlooked.
All this renders Boyer's “manifest” unconvincing, particularly his assertion of the social merits of inequality of income and wealth, as means to reward success and penalize failure (also reasoned as “socially responsible exploitation” (pp. 29, 103)). Intergenerational inequalities, inter- and intra-regional disparities, and other forms of marginalization remain unaccounted for. Thus, this framework fails to address situations where market solutions and social equity goals are at odds and reduces structural disadvantage to an individual problem.
The book is not without interest for those fascinated in exploring the mindset of neoclassical economics and its efforts to adjust to crises. Beyond that, it will fail to convince other audiences.
