To understand how the state shapes the regulation of work, we need to be clear about the role of the state in general. We also need to understand work or, more particularly, the nature of the employment relationship because that is the target of regulation of one form or another. This is not simply a matter of definition. Rather, both the state and the employment relationship are understood in different ways in different schools of thought with different (and competing) implications for what policy should try to achieve. This chapter explains these approaches, shows how understandings of the state and employment are related to each other, provides a framework for assessing policy goals themselves and, finally, explains how policy is made.

Before we can engage with arguments about policy or what states do or are urged to do in industrial relations policy, we need to explore different explanations for the employment relationship itself. All policy making is defined, too often implicitly as Befort and Budd (2009) say, by some understanding of ‘how work works’. Many policy makers – and those trying to influence them – might see themselves simply as problem solvers concerned with practical matters but it is impossible to argue for or against any policy without a set of assumptions about the connections between problem, remedy and outcome. This calls to mind the warning of Keynes (1936: 383– 4) that people ‘who believe themselves to be quite exempt from any intellectual influence are usually the slaves of some defunct economist …