A second structural contradiction relates to the creation of ‘organisational power structures’ not subject to the market. Thus decommodified sectors of the economy ‘tend to absorb an ever greater proportion of the overall quantity of labour power and social product’. A third contradiction is that state intervention undermines the ideology of ‘possessive individualism’, since social outcomes come to be seen not as the result of the individual management of one’s property and resources, but as the result of political measures. The impact of the welfare state on the workings of the labour market is particularly important, since it ‘amounts to a partial disincentive to work’ (Offe,1984, p. 197). Not only are wages ‘sticky’ and ‘downwardly inflexible’, but the ‘provisions of the welfare state have partly “decommodified” the interests of workers, replacing “contract” with “status”, and “property rights” with “citizen rights” ’. Thus ‘the central problem on the labour market is the supply problem: how to hire and fire the right people at the right place with the right skills and, most important, the right motivation and the right wage demand’. Thus decommodification has been conceived of as a process that entails exemption from pure market forces. Labour power may be at least partly decommodified as a result of access to benefits paid by the state, which substitute for wages, and by access to services provided directly by the state, which would otherwise have to be purchased by individuals. The latter part of this article applies this concept to the labour market policies of the New Labour government. Despite Esping-Andersen’s characterisation of the British social security system as essentially liberal, it has nevertheless displayed significant levels of decommodification in the post-war period.