MARKETS ARE MORE central to capitalism than to previous ways of organising the economy and are themselves a form of regulation. We have already seen how through commodification much of life becomes subject to the competitive pressures of markets. Because most people earn their income and purchase many of the goods and services they need through markets, the price mechanism is central to our lives. Since the 1970s markets have become even more central as state policies around the world have been transformed under the influence of neoliberal politics. Globalisation and policies of privatisation, deregulation and marketisation mean that many aspects of life that were not previously coordinated through the price mechanism are now subject to it.

Whereas states use law and regulation to exert direct control over the economy, market prices create incentives that ‘regulate’ and influence our behaviour. Thus, economists often talk about markets providing ‘decentralised’ rather than ‘centralised’ forms of decision-making. Market incentives also involve a greater degree of uncertainty than is typically the case with direct state regulation because they allow greater flexibility in behaviour and outcomes. A key feature of market societies is therefore the presence of risk. In this chapter we look at the increase in risk and other changes resulting from economic restructuring and explore key theoretical perspectives that seek to explain both the forces driving restructuring and its implications.