Neoliberalism or Regulatory Capitalism

Jacint Jordana and David Levi-Faur have provided systematic evidence that, since 1980, states have become rather more preoccupied with steering and less with rowing. Yet non-state regulation has grown even more rapidly, so it is not best to conceive of the era in which we live as one of the Regulatory State, but of Regulatory Capitalism. It is argued that Regulatory Capitalism is not about neoliberalism, indeed that those who think we are in an era of neoliberalism are mistaken. The corporatisation of the world is conceived as a product of regulation and the key driver of regulatory growth, indeed of state growth more generally. The reciprocal relationship between corporatisation and regulation creates a world in which there is more governance of all kinds.

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regulation part of governance and less with providing 4 . Yet non-state regulation has grown even more rapidly, so it is not best to conceive of the era in which we live as one of the Regulatory State, but of Regulatory Capitalism (Levi-Faur 2005).
The first section of the essay argues that Regulatory Capitalism is not about neoliberalism, indeed that those who think we are in an era of neoliberalism are mistaken. The historical forces that have produced Regulatory Capitalism are then sketched as a Police Economy that evolved from various Feudal economies, the supplanting of police with an Unregulable 19 th Century Liberal Economy, then the State Provider Economy (rather than the "welfare state") that gives way to Regulatory Capitalism. In the era of Regulatory Capitalism, more of the governance that shapes the daily lives of most citizens is corporate governance than state governance. The corporatisation of the world is both a product of regulation and the key driver of regulatory growth, indeed of state growth more generally. The big conclusion of the essay is that the reciprocal relationship between corporatisation and regulation creates a world in which there is more governance of all kinds. 1984 did arrive. The interesting normative question then becomes whether this growth in hybrid governance contracts freedom, or expands positive liberty through an architecture of separated powers that check and balance state and corporate dominations.
While the essay sets up this quandary of our time, it does not answer it.

The Neoliberal Fairytale
A widely believed chronology, on the left and the right, is that from the end of the 1970s neoliberalism conquered the world (Chomsky 1999). "What is neoliberalism? A programme for destroying collective structures which may impede the pure market logic" (Bourdieu 1998, 2). In the Foucauldian tradation, the methodological prescription is to study neoliberalism as a program rather than as a reality. Of course it is possible, indeed likely, that neoliberalism as a program has all sorts of real, unintended effects on the world without actually creating a neoliberal world. My interest in this section, however, is limited to whether neoliberalism has become an institutional reality. Institutionally, neoliberalism means privatisation, deregulation, including a deregulated international trade regime, and a diminished public sphere. During the 1970s, according to one conventional chronology, the Keynesian welfare state that we had known since the New Deal died. Hayek, a scorned intellectual for most of his life, replaced Keynes as the ascendant inspiration of political economy (Peters 1999). Not only had Keynes been sidelined, the dominant intellectual alternative to him in the academy -Marxwas also about to wither away. The fairytale continues that decisive political moments for this tumultuous change in the world of ideas were the election of Margaret Thatcher in the UK in 1979 and Ronald Reagan in the US in 1980. The Hayekian prescriptions of these leaders were for small government, privatisation and deregulation. The revolution quickly seemed complete when Labor governments in Australia and New Zealand in the early 1980s bought in to policies of privatisation and deregulation. Indeed New Zealand took these to greater heights than seen in Thatcher's Britain, just as Ireland later took her low corporate tax policies to deeper lows. The lessons of Labor in the Antipodes were not lost at the Metropoles. It was necessary for Blair and Clinton to be New Labour, New Democrats, not "tax and spend" social democrats. The leadership was English speaking; it was not until the late 1990s that the German social democrats seized power after they learnt to be "New".
The "Chicago boys" 5 were sending missionaries to places like Latin America as well. The leadership of the likes of Carlos Menem in Argentina was lionized by the IMF as demonstrating the neoliberal path out of underdevelopment. Shortlived improvements in the performance of countries such as Argentina and New Zealand, which had been the developed economies that had performed worst during the Provider State era, were not interpreted by neoliberal missionaries as regression to the mean, but as fundamentally effective transformations. When they started performing worse than more regulated economies, the IMF, oblivious, continued to tout their virtues. Some thought this showed that Keynes was right after all -that there was nothing so influential as the ideas of a dead economy. 6 Ignoring the fact that the Soviet economy had outperformed the US and UK for most of the industrial capitalist era from World War I to 1970 (Castells 2000, 10-19), Reagan and Thatcher believed that their military and economic strength so persuaded Gorbachev that socialist economies could never work that, well, he just gave up and ultimately handed over the keys to the Soviet economy to the Margaret Thatcher Foundation and other Anglo-Saxon neoliberal missionaries. 7 This was the "End of History" (Fukuyama 1989). Neoliberalism was now the "Washington Consensus". Once the entire Second World had signed up to the Washington Consensus, one by one Third World nations fell into line, pushed by the IMF to hire consultants from New Zealand to explain how they had seen the light.
China was a minor exception. But Tiananmen Square in 1989 showed that it was only a matter of time before China realised that neoliberalism would fix its economic malaise, just as it was fixing Russia. Die-hard Keynesians pointed 6 And indeed the New Zealand economy has been performing outstandingly under the more Keynesian policies of the current Prime Minister, Helen Clark. 7 Of course Gorbachev really did believe in Glasnost and Perestroika, really did believe that a continuing arms race with the US was not in the economic interests of his people or the security interests of the world, and did have the vision to see that Soviet economic planning that had worked quite productively during the heyday of Fordist industrialism, would never flourish under the post-Fordist production imperatives of the information age (see Castells 2000, 2-67). feebly to other Dragon economies in Asia as achieving sustained economic growth at a level that was consistently outpacing all the neoliberal economies. investments/exports. "The medicine we dispensed abroad was, in important respects, not really the same stuff we drank at home." (Stiglitz 2004, 23) Actually, this is not quite right. In the first two Reagan years there was genuine deregulatory zealotry. But by the end of the first Reagan term, business regulatory agencies had resumed the long-run growth in the size of their budgets, the numbers of their staff, the toughness of their enforcement and the numbers of pages of regulatory laws foisted upon business (Ayres and Braithwaite 1992, 7-12). Overall, real business regulatory spending increased 10 per cent during the Reagan years (Tramontozzi and Chilton 1988 Osborne and Gaebler's (1992) prescription for reinventing government to steer rather than row. Jordana andLevi-Faur (2003, 2004) show that the tendency for state regulation to grow with privatisation is a global one. As privatisation spreads, they find new regulatory agencies spread even faster, and they show how the diffusion of regulatory agencies moved from the West to take off in Latin America in the 1990s.
Francis Fukuyama (2004), the same who told us that the "End of History" had arrived with a Washington Consensus that was the "end point of mankind's ideological evolution" and the "final form of human government" (Fukuyama 1989), now agrees that Russian privatisation was a disaster because "privatisation inevitably creates huge information asymmetries, and it is the job of governments to correct them" (Fukuyama, 2004, 18). Moreover, he reports Milton Friedman saying that in the early 90s he had three words for countries making the transition from socialism: "privatise, privatise, privatise". "But I was wrong," Friedman continues. "it turns out that the rule of law is probably more basic than privatisation." (Fukuyama 2004, 19). Fukuyama (2004, 18) Majone, 1994;Loughlin and Scott, 1997;Parker, 1999;Jayasuriya, 2001;Midwinter & McGarvey, 2001;Marcus, 2002;Moran, 2003). The nub of the regulatory state idea is power is deployed "through a regulatory framework, rather than through the monopolization of violence or the provision of welfare" (Walby, 1999, 123 Vogel (1996) found empirically to be Freer Markets, More Rules, but also "more capitalism, more regulation". Privatisation is part of Levi-Faur's characterisation of Regulatory Capitalism. But it sits alongside proliferation of new technologies of regulation and meta regulation (Parker 2002), or control of control (Power 1996), increased delegation to business and professional self-regulation and to civil society, to intra-and international networks of regulatory experts, and increased regulation of the state by the state, much of it regulation through and for competition. 8 The Regulatory Capitalism framework theorises the New Public Management post-1980 as a conscious separation of provider and regulator functions within the state, where sometimes the provider functions were privatised and regulated, and sometimes they were not privatised but nevertheless subjugated to the "audit society" and government by (audited) contract (Power 1996).
The Keynesian welfare state now seems a poor description of the institutional package that dominated until 1980. One reason is that Keynes is alive and well not only in the political economy of new social democrats like Tony Blair, but in neoconservatives like George W. Bush and John Howard. Second, it is not true that the state has hollowed out -Bush and Howard are by far the most profligate spenders their nations have seen. Nor has the welfare state atrophied.
Welfare state spending by rich nations has not declined (Castles 2004). Finally, the State Provider Economy was not just about providing welfare; it was about states providing transport, industrial infrastructure, utilities and much more beyond welfare, a deal of which was privatised in the transition to Regulatory Capitalism.
Even the idea of the nightwatchman state of the 19th century needs qualification. The prehistory of the institutional change summarized in this paper could be described as a transition from various feudalisms to a Police Economy. The sequence I will describe is a transition then from that Police Economy to the Unregulable Economy tending to laissez faire after the collapse of police, to the "State Provider Economy" (rather than the "welfare state") to "Regulatory Capitalism" (rather than the "regulatory state").

The Police Economy
What does Tomlins (1993, 37-8) mean when he says that writing a history of the American state without a reference to the genealogy of "police" is "akin to writing a history of the American economy without discussing capitalism?" In the white settler societies it is easier to see with clarity the Police Economy because it did not have to struggle to supplant the old economy of monopolies granted by the king to guilds, market towns and trading companies like the Hudson Bay Company (even as the New World was partly constituted by the latter). That economy of monopoly domination granted by the king was not only an earlier development in the transition from feudalism to capitalism that was subsequently (de)regulated by police, it was also a development largely restricted to cities which were significant nodes of manufactures and longdistance trade. 9 Tiny agricultural communities that did not have a guild or a chartered corporation had a constable. The early modern idea of police differs from the contemporary notion of an organization devoted to fighting crime (Garland, 2001). Police from the 16 th to the 19 th century in Continental Europe meant institutions for the creation of an orderly environment, especially for trade and commerce. The historical origins of the term through German back to French is derived from the Greek notion of "policy" or "politics" in Aristotle (Adam Smith 1978, 486;Neocleous 1998). It referred to all the institutions and processes of ordering that gave rise to prosperity, progress and happiness, most notably the constitution of markets. Actually it referred to that subset of governance herein conceived as regulation.
Police certainly included the regulation of theft and violence, preventive security, regulation of labour, vagrancy and the poor, but also of weights and measures and other forms of consumer protection, liquor licencing, health and safety, building, fire safety, road and traffic regulation and early forms of 9 France was an exception that made guilds state organs and spread their regulatory authority out from towns across the entire countryside (Polanyi, 1957, 66). England communities then even requiring Native American villages to appoint constables. Eighteenth century English, but not American, 11 political instincts were to view Continental political theory of police as a threat to liberty and to 10 Pasquino (1991, 112) reports a 1937 bibliography for German-Speaking areas that lists 3,215 publications from 1600 to 1800 under the listing, "science of police in the strict sense". 11 The emerging American republics gave a republican interpretation to police, as did many European intellectuals of the science of administration and police. Police was partly about restraining the power of the king. It denoted both the condition of a just and free social order and the means for securing that order -local governance that steers a polity toward republican freedom (Tomlins 1993, 35-59). The Delaware Declaration of Rights of 1776 stated "that the people of this State have the sole exclusive and inherent Right of governing and regulating the internal Police of the same." Pennsylvania, Maryland, North Carolina and Georgia adopted the same formulation, or a similar one, over the next year (Tomlins 1993, 57 (1998)  begin to fill the vacuum left by constables now concentrating only on crime.
Business regulation became variegated into many different specialist regulatory branches. The 19 th century regulatory growth is more in the number of branches than in their size and power. Laissez faire ideology underpinned this regulatory weakness. The regulators' feeble resourcing compared to the paramilitary police, and the comparative wealth of those they were regulating, made the early business regulators even more vulnerable to capture and corruption than the police, as we see with poorly resourced business regulators in developing economies today.

The Unregulable Liberal Economy
Where problems were concentrated in space, 19th century regulation secured some major successes. Coal mines became much safer workplaces from the latter years of the 19th century, as did large factories in cities (Braithwaite 1985), regulatory transitions that are yet to occur in China that today accounts for 80% of the world's coal mine fatalities. Rail travel was causing thousands of deaths annually in the US late in the nineteenth century (McCraw1984, 26); by the twentieth century it had become a very safe way to travel (Bradbury 2002).
Regulation rendered ships safer and more humane transporters of exploited labour (slaves, convicts, indentured labour, refugees from the Irish famine) to corners of empire suffering labour shortages (Macdonagh 1961). The paramilitary police were also successful in assisting cities like London, Stockholm and Sydney to become much safer from crimes against persons and property for a century and a half from 1820 (Gurr et al, 1977). But it was only problems like these that were spatially concentrated where 19th century regulation worked. In most domains it worked rather less effectively than 18th century police. This was acceptable to political elites, who were mainly concerned to make protective regulation work where the dangerous classes might congregate to threaten the social order -in cities, convict ships, factories. 12 In addition to the general underresourcing of 19 th century regulatory inspectorates, the failure to reach beyond large cities, 13 the capture and corruption, there was the fact that the inspectorates were only beginning to invent their regulatory technologies for the first time. They were still learning.
The final and largest limitation that made their challenge impossible was that in the 19th century almost all commerce was small business. It is harder for an inspector to check 10 workplaces employing 6 people than one with 60 workers.
This remains true today. We will see that the regulatory reach of contemporary capitalism would be impossible without the lumpiness of a commerce populated by big businesses that can be enrolled to regulate smaller businesses.
Prior to the 19th century, it was possible to lever the self-regulatory capabilities of guilds in ways not dissimilar to 20 th century capabilitities to enrol industry associations and big business to regulate small business. But the well-ordered 12 In the village or the rural sweatshop the centralized regulatory agencies offered little protection. To a considerable extent that is still true today. If you live in an Australian outback town, you put up with a lot of crime and there is not much you can do if the butcher sells you underweight meat or if the two petrol stations in town collude to charge an outrageous price. In the city you could complain to a consumer protection regulator who would check out the complaint. Out back the metropolitan offices of the regulator are too far away for that to be feasible. A radical solution would be to deputise and train police in the bush as delegates of consumer protection, fire safety, nursing home, food safety and other regulators. The only way for rural communities to get their fair share of the regulatory state may be to go back to the 18th century constable. Clifford Shearing has been an advocate of giving remote and marginal people a claim to their share of a policing budget (as opposed to a police force budget) to reinstate a form of Jeffersonian police for an era of Regulatory Capitalism (Shearing & Wood 2003). The bush also lost out to the city with the move away from the Provider State after 1980. When the Post-Master General provided the phone service, country folk could at least get their local member to do something about poor service. Police and weights and measures inspectorates worked up to a point in the 19 th century city. But they left the hinterland unregulable, plundered by highwaymen and commercial crooks. The far West of Australia's Eastern states remain wild in a way akin to the wild West that President Jefferson opened up to a liberal 19 th century economy he would have been disappointed to see. Contemporary Australian outback towns today are likewise afflicted with high levels of violence, buildings that are firetraps, occupational health and safety practices that are scandalous. Such places have lost many of the virtues of agrarian republicanism without gaining many of the civilising influences the Provider State and the Regulatory State supplied to cities. 13 For example see Clarke's (1986) characterisation of British club governance as Regulating the City. And see Moran (2003) for the most influential discussion of British club governance. The para-military crime police, as we have already implied, also succeeded only in regulating large cities in the nineteenth century.
world of guilds had been one of the very things destroyed by the chaotic emergence of laissez faire capitalism outside the control of such pre-modern institutions. Where guilds did retain control, capitalism did not flourish, because the guilds restricted competition.
While the 19th century state was therefore mostly a laissez faire state with very limited reach of its capacity to regulate, it was a state learning to regulate.
While the early 19 th century tension was Smith's between the decentralised police economy and laissez faire liberalism, the late century tension was between laissez faire and the growth of an administrative state of office blocks in large cities. The late 19 th century was both more disciplined by the market and more disciplined by growing state capacity to govern.

The Unregulable Liberal Economy Creates the Provider State
A simple solution to the problem of private rail companies charging monopoly prices, by-passing poorer towns, failing to serve strategic national development objectives and flouting safety standards was to nationalise them. A remedy to unsanitary private hospitals was a public hospital system that would make it unnecessary for patients to resort to unsafe private providers.

Regulation Creates Big Business
Braithwaite and Drahos (2000)  When it was first invented, however, the historical importance of the security had nothing to do with the corporatisation of the world. Rather, it transformed state finances through bonds that created long-term national debts. 15 While the 14 Corporatisation and securitisation are themselves part of a deeper historical process of propertisation in which assets both tangible and intangible become subject to regulation by formal property rights that enable these assets to be traded (Drahos 2002).
idea of dividing the national debt into bonds was invented in Naples in the 17th century, it was England that managed by the 18th century to use the idea in a financial revolution that helped it gain an upper hand over its principal rival, France (Dickson 1993  century that the majority of litigants in appellate courts were corporations rather than individual persons and the majority of actors described on the front page of the New York Times were corporate rather than individual actors (Coleman, 1982: 11).

Antitrust Globalizes American Mega-Corporate Capitalism
In the 1880s, predominantly agrarian America became deeply troubled by the new threat to what they saw as their Jeffersonian agrarian republic from concentrations of corporate power that they called trusts. Farmers were especially concerned about the "robber barons" of railroads that transported their produce across the continent. But oil, steel and other corporate concentrations of power in the North-East were also of concern. Because Jeffersonian republicanism also feared concentrations of state power in the North-East, the American solution was not to nationalise rail, oil and steel. It was to break up the trusts. By 1890 at least ten US states had passed antitrust laws, at which point the Sherman Act was passed by a virtually unanimous vote of the US Congress.
The effect of enforcement of the Sherman Act by American courts was not exactly as intended by the progressive era social movement against the railroad, oil, steel and tobacco trusts. Alfred Chandler, Jr., noted that "after 1899 lawyers were advising their corporate clients to abandon all agreements or alliances carried out through cartels or trade associations and to consolidate into single, legally defined enterprises" (Chandler 1977, 333-4). US antitrust laws thus actually encouraged mergers instead of inhibiting them because they "tolerated that path to monopoly power while they more effectively outlawed the alternative pathway via cartels and restrictive practices" (Hannah 1991, 8). The Americans found that there were organizational efficiencies in managerially centralized, big corporations that made what Chandler called a "three-pronged investment": (1) "an investment in production facilities large enough to exploit a technology's potential economies of scale or scope"; (2) "an investment in a national and international marketing and distribution network, so that the volume of sales might keep pace with the new volume of production"; (3) "to benefit fully from these two kinds of investment the entrepreneurs also had to invest in management" (Chandler 1990, 8).

Mega-Corporate Capitalism Creates Regulatory Capitalism
This story is one of reciprocal causation. The regulatory state creates megacorporations, but large corporations also enable regulatory states. We have seen that antitrust regulation is the primary driver of the first side of this reciprocal relationship. But other forms of regulation also prove impossible for small business to satisfy. In many industry sectors, regulation drives small firms that cannot meet regulatory demands into bankruptcy, enabling large corporates to take over their customers (see, for example, Braithwaite's (1994) account of how tougher regulation drove the "mom and pops" out of the US nursing home industry in favor of corporate chains). For this reason, large corporations often use their political clout to lobby for regulations they know they will easily satisfy but that small competitors will not be able to manage.
They also lobby for ratcheting up regulation that benefits them directly (eg longer patent monopolies) but that are mainly a cost for small business (Braithwaite & Drahos 2000, 56-87).
To understand the second side of the reciprocal relationship more clearlymega corporates create Regulatory Capitalism -consider the minor example of the regulation of the prison industry (Harding 1997). It is minor because most countries have not taken the path of privatising prisons, though in the US, where prisons house more than two million inmates and employ about the same number, it is not such a minor business. In the 1990s many private prisons are created in Australia, a number of them owned by the largest American prison corporations. A question that immediately arose was how was the state to ensure that American corporations met Australia's national and international human rights obligations. When the state was the monopoly provider of prison places, it simply, if ineffectively, told its civil servants that they would lose their jobs if they did not fulfil their duty in respect of such standards. This requirement was put into contracts with the private prisons.
But then the state has little choice but to invest in a new regulatory agency to monitor contract compliance.
As soon as it puts this in place, prisoner rights advocates point out that in some respects the old state-run prisons are more abusive than the new private providers, so the prison inspectorate should monitor the public prisons.
Moreover, it should make public its reports on the public prisons so that transparency is as real there as with private prisons (Harding 1997). Of course, the private corporations lobby for this as well to create a "level playing field" in their competition with the state. Hence, the corporatisation of the prison industry creates not only a demand for the independent, publicly transparent regulation of the corporates, it also creates a potent political demand for regulation of the state itself. This is central to understanding why the regulatory state is not the correct descriptor of contemporary transformations; Regulatory Capitalism involves heightened regulation of the state as well as growth in regulation by the state (Hood et al 1999). We have seen this in many other domains including the privatisation of British nursing home provision described earlier leading to inspection of public nursing homes.
Security generally has been a major domain of privatisation. Most developed economies today have a ratio of more than three private police to one public police officer (Johnston & Shearing 2003). Under provider capitalism it was public police officers who would provide security at football stadiums, shopping complexes, universities, airports. But today as we move from airport to shops to leisure activity to work, we move from one bubble of private security to another (Shearing & Wood, 2003;Johnston & Shearing 2003). If our purse is stolen at the shopping mall, it is a private security officer who will come to our aid, or who will detain us if we are caught shoplifting. The public police mostly cover us only as we move in public space between bubbles of private security. As with prisons, public demand for regulation of the private security industry arises when high profile incidents occur, such as the recent death of one of Australia's most talented cricketers after a bouncer's punch outside a nightclub.
International security has also privatised. Some of those allegedly leading the abuses at Abu-Grahib in Iraq were private security contractors. Many of these contractors carry automatic weapons, dress like soldiers, and are killed as soldiers by insurgents. In developing countries, particularly in Africa, military corporations have been hired to be the strike infantry against adversaries in civil wars. An estimated 70 per cent of the former KGB found employment in this industry . This has led the British government to produce a White Paper on the need to regulate private military organizations and to the quip that the regulator be dubbed OfKill! So the accumulation of political power into the hands of large private corporations creates public demand for regulation. Moreover, we have seen that the largest corporations often demand this themselves. In addition, the regulatory processes and (partly resultant) competitive imperatives that increase the scope and scale of corporations make what was unregulable in the 19th century, regulable in the 20th. The chemicals/pharmaceuticals industry, for example, creates huge public demand for regulation. Incidents like Bhopal with the manufacture of agricultural chemicals and thalidomide with pharmaceuticals, that kill thousands, galvanize mass concern. The 19th century regulatory state could only respond to public outrage by scapegoating someone in the chemical firm and throwing them in prison. It was incapable of putting a regulatory regime in place that might prevent recurrence by addressing the root causes of disasters. There were too many little chemical producers for state inspectors to monitor and it was impossible for them to keep up with technological change that constantly created new risks.
After the Bhopal disaster, which ultimately caused the demise of Union Capitalism work (Gunningham & Grabosky 1998). Braithwaite and Drahos (2000)  Of course it is more cost-effective to collect tax from one large corporation than ten small ones and most corporate tax is collected from the largest 1% of corporations in wealthy nations. 17 But this is not the main reason that corporatisation created a wealthy state. More fundamentally, corporatisation assisted the collectability of other taxes (see Braithwaite & Drahos 2000, Chapter 9). As retailing organizations became larger corporates, as opposed to family-owned corner stores, the collection of indirect tax became more costeffective. When most of the Australian working class was rural, itinerantly shearing sheep for graziers, cutting cane or picking fruit, collecting taxes from 17 In the US in 1997, 9,017 of the 4.71 million corporations had $250 million or more in assets. This group of less than half a percent of the corporations paid 78% of the corporate tax collected (Yin 2001, 228). In Australia, the skew is similar but not so extreme: 75% of company tax collections are from "large" companies with total income over A$10 million (Wickerson, Reddan & Khan 2001, 265 (Power 1997). Finally, there is the development mentioned earlier of independent inspectors of privatised industries moving their oversight back to public provision.
Of course the idea of a separation of powers where one branch of governance regulates another so that neither executive, judiciary nor legislature can dominate governance is an old one, dating at least from the Spartan constitution and Montesquieu (Braithwaite 1997 Capitalism has also moved forward on how innovative separations of powers can deter abuse of power (see Braithwaite 1997). To the extent that there are richer, more plural separations within and between private and public powers in a polity, there is a prospect of moving toward a polity where no one power can dominate all the others and each power can exercise its regulatory functions semi-autonomously even against the most powerful branch of state or corporate power. As Durkheim began to see, the art of government "consists largely in coordinating the functions of the various self-regulating bodies in different spheres of the economy" (Schepel 2005, Chapter 1; see also Cotterrell, 1999;Durkheim, 1930: 1901. Weiss (2005)  Capitalism. Across all of these transitions, markets in fits and starts have tended to become progressively more vigorous, as has investment in the regulation of market externalities. Not only have markets, states, and state regulation become more formidable, so has non-state regulation by civil society, business, business associations, professions and international organizations.
Separations of powers within polities have become more variegated, with more private-public hybridity. This means political science conceived narrowly as a discipline specialized in the study of public governance to the exclusion of corporate governance, NGO governance and the governance of transnational networks makes less sense than it once did. If we have entered an era of Regulatory Capitalism, regulation may be, in contrast, a fruitful topic around which to build intellectual communities and social science theory.
In seeing the separations among the periods posited in this essay, it is also important to grasp the posited continuities. Both markets and the state become While less welfare is state administered today and more is provided through contracted out, contested, regulated markets for welfare provision, state spending on welfare has not fallen. The rumours of the death of Keynes, and of Hayek's immortality, at the End of History were both exaggerated. Keynesian demand management is more complicated in the global economy, but remains a central preoccupation of Regulatory Capitalism.
Hayek's insistence that central states lack sufficient local knowledge to plan investment underpins both the attraction of markets in regulatory capitalism and the attraction to devolved regulatory technologies that harness local knowledge (Shearing & Wood 2003).
A fair criticism of this essay would be that its attack on the analytic value of neoliberalism as a package of privatisation, deregulation and rolling back the state assails a straw (wo)man. Milton Friedman agrees that privatisation is and should be combined with at least some kinds of regulation. No one implements the more radical prescriptions of the old Chicago School for abolishing antitrust. Those who point to the hollowing out of the state today mostly do so in a governance frame that notes its capacity to get things done through proliferating interdependencies, or in a Foucauldian frame that notes capacities to "govern at a distance" (Rose & Miller 1992). Across all points of the political spectrum, there now seems as much concern about state failure as market A contribution of this chapter has been to suggest that regulation, particularly antitrust and securitisation of national debt, enabled the growth of both provider and regulatory states. Regulation did this through pushing the spread of large corporations that made Chandler's (1977Chandler's ( , 1990 three-pronged investment. The corporatisation of the world increased the efficacy of tax enforcement, funding provider and regulatory state growth. The corporatisation of the world drove a globalisation in which transnational networks, industry associations, professions, international organizations, NGOs, NGO/retailer hybrids like the Forest Stewardship Council, and most importantly corporations themselves (especially, but not limited to, stock exchanges, ratings agencies, the Big Four accounting firms, multinationals that specialize in doing states' regulation for them like Société Général de Surveillance, 18 and large corporates that regulate small upstream and downstream firms in the same industry) became important national, regional and global regulators. This was a very different capitalism and a very different world of governance than existed in the early 20 th century industrial capitalism of family firms. Hence the power of Levi-Faur's conceptualisation of Regulatory Capitalism. While states are "decentred" under Regulatory Capitalism, the wealth capitalism generates means that states have more capacity both to provide and to regulate than ever before.