The state and the enterprise: the changing equation

This is an attempt to filter from the movement of history undercurrents of a striking change; the transformed equation between the state and the enterprise where the balance of influence has shifted decisively in favour of the latter. For much of its history the enterprise has been controlled, regulated and targeted as its chief source of sustenance by the state. In return, the state allowed the enterprise to create value and keep a part of it. As the nation-states gained power and stability and the governments expanded, taxes grew in size and complexities; the public debt mounted. By over-regulating and overexploiting the enterprise, the state perforated its own lifeline. As the power and influence of nation-states diminished, the liberated forces of market and the spirit of free enterprise gained ascendancy. Now, in the nineties, the policy agenda in open economies is increasingly being dictated by the unrelenting arithmetic of market place and the role of government is waning. A new twist, though, is unfolding in this drama. Competing fiercely for narrow gains, the entrepreneurs are intermittently bringing about unprecedented chaos to currency as well as stock-markets. Time and again, the state’s inability to contain this vandalism is exposed. The recent trends, however, offer some optimism.