The neo-conservative assault on the welfare state is very much a political and ideological act. The conflict over social welfare policies continues to be fought squarely on the terrain of domestic and national politics. However, neo-conservative reformers, whether in Britain, the United States or Canada have not dared to go as far as they have wished in dismantling the welfare state because of popular support for universal social programmes and interest group opposition to cutbacks. This has led some analysts like Therborn to conclude that welfare state capitalism ‘represents an irreversible development’.1 In a similar vein Myles observed that Conservative attempts to dismantle the Canadian welfare state had been rebuffed and that the talk of ‘crisis’ was, therefore, inappropriate.2 Their assessment has proved somewhat off the mark. Issues relating to globalization such as international competitiveness, capital flight and credit rating of governments by financial institutions have provided new ammunition to call into question many of the fundamental notions underpinning the welfare state. Indeed, among political élites, it is an accepted ‘fact of life’ that national debt and deficit must be reduced and that this must be done not by raising taxes but by reducing public (read social) expenditures. The principle of universality of social welfare, which seemed so important earlier, has virtually ceased to be a matter of controversy, and for some time now universal social programmes have been dying a death ‘by a thousand cuts’.3 The ideology of neo-conservatism is having a comfortable ride on the back of globalization.