Making Markets in the Welfare State: The Politics of Varying Market Reforms (Cambridge Studies in Co


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Making Markets in the Welfare State: The Politics of Varying Market Reforms ( Cambridge Studies in Comparative Politics) [Professor Jane R. Gingrich] on. Making Markets in the Welfare State: The Politics of Varying Market Reforms By Jane bsr2018.zppdon.ruchCambridge: Cambridge University Press,

In the s, SPD policymaker and Marxist Rudolf Hilferding proposed substantial policy changes in the SPD as well as influencing social democratic and socialist theory. Hilferding was an influential Marxian socialist both inside the social democratic movement and outside it, such as his pamphlet titled Imperialism which influenced Lenin's own conception of imperialism in the s.

Prior to the s Hilferding declared that capitalism had evolved beyond what had been laissez-faire capitalism into what he called "organized capitalism". Organized capitalism was based upon trusts and cartels controlled by financial institutions that could no longer make money within their countries' national boundaries and thus needed to export to survive, resulting in support for imperialism. He said that this had the consequence of creating effective collectivization within capitalism and had prepared the way for socialism.

However, by the s Hilferding became an adherent to promoting a gradualist evolution of capitalism into socialism. He then praised organized capitalism for being a step towards socialism, saying at the SPD congress in that "organized capitalism" is nothing less than "the replacement of the capitalist principle of free competition by the socialist principle of planned production". He went on to say that "the problem is posed to our generation: In the s, the SPD began to transition away from revisionist Marxism towards liberal socialism beginning in the s. Curt Geyer, who was a prominent proponent of liberal socialism within the Sopade, declared that Sopade represented the tradition of Weimar Republic social democracy, liberal democratic socialism and stated that the Sopade had held true to its mandate of traditional liberal principles combined with the political realism of socialism.

The only social democratic governments in Europe that remained by the early s were in Scandinavia. The Nordic model would permit private enterprise on the condition that it adheres to the principle that the resources it disposes are in reality public means and would create of a broad category of social welfare rights. Whereas the — SAP governments had run large deficits, after a strong increase in state expenditure in the new SAP government reduced Sweden's budget deficit. The government had planned to eliminate Sweden's budget deficit in seven years, but it took only three years to eliminate the deficit and Sweden had a budget surplus from to However, this policy was criticized because—although the budget deficit had been eliminated—major unemployment still remained a problem in Sweden.

In the Americas from the s to s, social democracy was rising as a major political force. In Mexico , several social democratic governments and presidents were elected from the s to the s. Political violence in Mexico had become serious in the s with the Cristero War in which right-wing reactionary clericals fought against the left-wing government that was attempting to institute secularization of Mexico.

Cardenas stepped down as Mexican President and supported a compromise presidential candidate who held support from business interests in order to avoid further antagonizing the right-wing. After World War II, a new international organization to represent social democracy and democratic socialism, the Socialist International in In the founding Frankfurt Declaration , the Socialist International denounced both capitalism and Bolshevik communism—criticizing the latter in articles 7, 8, 9 and 10—saying:.

The rise of Keynesianism in the Western world during the Cold War influenced the development of social democracy. Keynesianism was believed to be able to provide this. Attlee immediately began a program of major nationalizations of the economy. There were early major critics of the nationalization policy within the Labour Party in the s. In The Future of Socialism , British social democratic theorist Anthony Crosland argued that socialism should be about the reforming of capitalism from within.

SPD leader Kurt Schumacher declared that the SPD was in favour of nationalizations of key industrial sectors of the economy, such as banking and credit, insurance, mining, coal, iron, steel, metal-working and all other sectors that were identified as monopolistic or cartelized.

Upon becoming a sovereign state in , India elected the social democratic Indian National Congress to government with its leader Jawaharlal Nehru becoming Indian Prime Minister. I am not referring to the communist countries but to those which may be called parliamentary, social democratic countries". The new sovereign state of Israel elected the socialist Mapai party that sought the creation of a socialist economy based on cooperative ownership of the means of production via the kibbutz system while it rejected nationalization of the means of production. With these changes, the SPD enacted the two major pillars of what would become the modern social democratic program: The economic crisis in the Western world during the mid to late s resulted in the rise of neoliberalism and politicians elected on neoliberal platforms such as British Prime Minister Margaret Thatcher and U.

In , an agreement was made between several social democratic parties in the Western bloc countries of Belgium, Denmark and the Netherlands; and with the communist parties of the Eastern Bloc countries of Bulgaria, East Germany and Hungary; to have multilateral discussions on trade, nuclear disarmament and other issues. In , the Socialist International adopted its present Declaration of Principles. The Declaration of Principles addressed issues concerning the "internationalization of the economy". The Declaration of Principles defined its interpretation of the nature of socialism.

It stated that socialist values and vision include "a peaceful and democratic world society combining freedom, justice and solidarity". It defined the rights and freedoms it supported, stating: Socialists are committed to achieve freedom from hunger and want, genuine social security, and the right to work".

However, it also clarified that it did not promote any fixed and permanent definition for socialism, stating: In a movement committed to democratic self-determination there will always be room for creativity since each people and every generation must set its own goals". The Socialist International congress was politically significant in that members of Communist Party of the Soviet Union during the reformist leadership of Mikhail Gorbachev attended the congress. The Socialist International's new Declaration of Principles abandoned previous statements made in the Frankfurt Declaration of against Soviet-style communism.

After the congress, the Soviet state newspaper Pravda noted that thanks to dialogue between the Soviet Communist Party and the SI since that "the positions of the CPSU and the Socialist International on nuclear disarmament issues today virtually coincide". The collapse of the Marxist—Leninist regimes in Eastern Europe after the end of the Cold War and the creation of multiparty democracy in many many of those countries resulted in the creation of multiple social democratic parties.

Though many of these parties did not achieve initial electoral success, they became a significant part of the political landscape of Eastern Europe. In the s, Third Way politics developed and many social democrats became adherents of it. The social democratic variant of the Third Way has been advocated by its proponents as an alternative to both capitalism and what it regards as the traditional forms of socialism—including Marxist socialism and state socialism —which Third Way social democrats reject.

In This Article

It officially advocates ethical socialism , reformism and gradualism , which includes advocating a humanized version of capitalism, a mixed economy , political pluralism and liberal democracy. Prominent Third Way proponent Anthony Giddens, Baron Giddens views conventional socialism as essentially having become obsolete. However, Giddens claims that a viable form of socialism was advocated by Anthony Crosland in his major work The Future of Socialism Giddens claims that this claim "can no longer be defended".

He says that with the collapse of legitimacy of centrally planned socialization of production, "[w]ith its dissolution, the radical hopes for by socialism are as dead as the Old Conservatism that opposed them". Giddens says that although there have been proponents of market socialism who have rejected such central planned socialism as well as being resistant to capitalism, "[t]here are good reasons, in my view, to argue that market socialism isn't a realistic possibility". Giddens makes clear that the Third Way, as he envisions it, is not market socialist, arguing that "[t]here is no Third Way of this sort, and with this realization the history of socialism as the avant-garde of political theory comes to a close".

Giddens commends Crosland's A Future of Socialism for recognizing that socialism cannot be defined merely in terms of a rejection of capitalism because if capitalism did end and was replaced with socialism, then socialism would have no purpose with the absence of capitalism. The only common characteristic of socialist doctrines is their ethical content.

Development, Welfare Policy, and the Welfare State

Socialism is the pursuit of ideas of social cooperation, universal welfare, and equality—ideas brought together by a condemnation of the evils and injustices of capitalism. It is based on the critique of individualism and depends on a 'belief in group action and "participation", and collective responsibility for social welfare'. Paul Cammack has condemned the Third Way as conceived by Lord Giddens as being a complete attack upon the foundations of social democracy and socialism, in which Giddens has sought to replace them with capitalism. Cammack claims that Giddens devotes a lot of energy into criticizing conventional social democracy and conventional socialism—such as Giddens' claim that conventional socialism has "died" because Marx's vision of a new economy with wealth spread in an equitable way is not possible—while at the same time making no criticism of capitalism.

As such, Cammack condemns Giddens and his Third Way for being anti-social-democratic, anti-socialist and pro-capitalist that Giddens disguises in rhetoric to make appealing within social democracy. British political theorist Robert Corfe who was in the past a social democratic proponent of a new socialism free of class-based prejudices, criticized both Marxist classists and Third Way proponents within the Labour Party. The party has lost its soul, and what has replace it is harsh, American style politics".

Corfe claims that the failure to develop a new socialism has resulted in what he considers the "death of socialism" that left social capitalism as only feasible alternative. Lafontaine has noted that the founding of The Left in Germany has resulted in emulation in other countries, with several Left parties being founded in Greece, Portugal, Netherlands and Syria. The Future of Social Democracy in Europe Cramme and Diamond note that belief in economic planning amongst socialists was strong in the early to mid-twentieth century, but declined with the rise of the neoliberal right that both attacked economic planning and associated the left with economic planning.

They claim that this formed the foundation of the "Right's moral trap" in which the neoliberal right attacks on economic planning policies by the left, that provokes a defense of such planning by the left as being morally necessary and ends with the right then rebuking such policies as being inherently economically incompetent while presenting itself as the champion of economic competence.

Cramme and Diamond identify market conforming as being equivalent to British Labour Party politician and former Chancellor of the Exchequer Philip Snowden 's desire for a very moderate socialist agenda based above all upon fiscal prudence, as Snowden insisted that socialism had to build upon fiscal prudence or else it would not be achieved. In the s, the social democratic parties that had dominated some of the post-World War II political landscape in Western Europe were under pressure in some countries to the extent that a commentator in Foreign Affairs called it an "implosion of the centre-left".

The decline subsequently proved to not be isolated to Greece as it spread to a number of countries in Western Europe , a phenomenon many observers thus described as " Pasokification ":. However, in other countries such as Denmark and Portugal support for social democratic parties was relatively strong in polls as of Moreover, in some countries the decline of the social democratic parties was accompanied by a surge in the support for other centre-left or left-wing parties, such as Syriza in Greece, Unidos Podemos in Spain and the Left-Green Movement in Iceland.

Several explanations for the European decline have been proposed. Some commentators highlight that the social democrat support of national fragmentation and labour market deregulation had become less popular among potential voters. For instance, French political scientist Pierre Manent emphasised the need for social democrats to rehabilitate and reinvigorate the idea of nationhood. Skarstein emphasised the contrast between social democrats' strong commitment for helping people on the international scene on one side, and their strong commitment in favour of welfare policies for the nation's own population on the other.

The article claims that the SPD subsequently lost half of its former electoral coalition, namely blue-collar voters and socially disadvantaged groups, while efforts to gain access to centrist and middle-class voters failed to produce any compensating gains. Furthermore, the article concludes that the only possible remedy is for the SPD to make efforts to regain former voters by offering credible social welfare and redistributive policies. Spain is one of the countries where social democracy has governed a longer time since the transition to democracy in However, its decline has followed the european social democracy way, losing half of its electorate between and present day.

Some authors and polls consider him and its Government the last hope for Europe to recover the social democracy [] and maybe other countries can follow their example [] []. In July Jeremy Corbyn , who had led the UK Labour Party to significant gains in the general election , gave a speech at an event organised by the Dutch Labour Party in The Hague in which he argued that socialists and social democrats needed to "reject austerity or face rejection by voters", suggesting that working-class communities had become disgruntled by stagnating living standards following the financial crisis of — , and that if the left did not offer a "new economic consensus to replace the broken neoliberal model" which he said had led to increasing economic inequality and insecurity, they would be perceived as part of the Establishment and eclipsed by right-wing populists.

From a purely socialist point of view, social democratic reform is a failure since it serves to devise new means to strengthen the capitalist system, which conflicts with the socialist goal of replacing capitalism with a socialist system. Socialist critics often criticize social democracy on the grounds that it fails to address the systemic issues inherent to capitalism, arguing that ameliorative social programs and interventionism generate issues and contradictions of their own, thus limiting the efficiency of the capitalist system.

The American democratic socialist philosopher David Schweickart contrasts social democracy with democratic socialism by defining the former as an attempt to strengthen the welfare state and the latter as an alternative economic system to capitalism. According to Schweickart, the democratic socialist critique of social democracy is that capitalism can never be sufficiently "humanized" and that any attempt to suppress its economic contradictions will only cause them to emerge elsewhere.

For example, attempts to reduce unemployment too much would result in inflation and too much job security would erode labour discipline. Marxian socialists argue that social democratic welfare policies cannot resolve the fundamental structural issues of capitalism, such as cyclical fluctuations , exploitation and alienation. Accordingly, social democratic programs intended to ameliorate living conditions in capitalism—such as unemployment benefits and taxation on profits—creates further contradictions by further limiting the efficiency of the capitalist system via reducing incentives for capitalists to invest in further production.

Critics of contemporary social democracy, such as Jonas Hinnfors, argue that when social democracy abandoned Marxism it also abandoned socialism and has become a liberal capitalist movement, [] effectively making social democrats similar to non-socialist parties like the U. Market socialism is also critical of social democratic welfare states. While one common goal of both concepts is to achieve greater social and economic equality, market socialism does so by changes in enterprise ownership and management, whereas social democracy attempts to do so by subsidies and taxes on privately owned enterprises to finance welfare programs.

Franklin Delano Roosevelt III and David Belkin criticize social democracy for maintaining a property-owning capitalist class which has an active interest in reversing social democratic welfare policies and a disproportionate amount of power as a class to influence government policy.

They note that even in Scandinavian countries social democracy has been in decline as the labour movement weakened. Joseph Stalin was a vocal critic of reformist social democracy, later coining the term " social fascism " to describe social democracy in the s because in this period social democracy embraced a similar corporatist economic model to the model supported by fascism.

This view was adopted by the Communist International. There are critics [ attribution needed ] that claim that social democracy abandoned socialism in the s by endorsing Keynesian welfare capitalism. This compromise created welfare states and thus Harrington contends that although this compromise did not allow for the immediate creation of socialism, it "recognized noncapitalist, and even anticapitalist, principles of human need over and above the imperatives of profit". From Wikipedia, the free encyclopedia. For a list of parties named as such, see Social Democratic Party.

Not to be confused with democratic socialism. Social justice Democracy economic industrial representative Labor rights Mixed economy Welfare Trade unionism Fair trade Environmental protection Negative and positive rights Secularism Social corporatism Social market economy. History of socialism Socialist calculation debate Socialist economics.

Decentralized planning Participatory economics. Market socialism Lange model Mutualism. Socialist market economy Socialist-oriented market. First International International Workingmen's Association. World Federation of Democratic Youth. International Union of Socialist Youth. International Committee of the Fourth International. Meanwhile, as Socialism advances throughout the world, new forces have arisen to threaten the movement towards freedom and social justice. Since the Bolshevik Revolution in Russia, Communism has split the International Labour Movement and has set back the realisation of Socialism in many countries for decades.

Communism falsely claims a share in the Socialist tradition. In fact it has distorted that tradition beyond recognition. It has built up a rigid theology which is incompatible with the critical spirit of Marxism. Where Socialists aim to achieve freedom and justice by removing the exploitation which divides men under capitalism, Communists seek to sharpen those class divisions only in order to establish the dictatorship of a single party. International Communism is the instrument of a new imperialism. Wherever it has achieved power it has destroyed freedom or the chance of gaining freedom.

It is based on a militarist bureaucracy and a terrorist police. By producing glaring contrasts of wealth and privilege it has created a new class society. Forced labour plays an important part in its economic organisation. Jawaharlal Nehru , Prime Minister of India — The examples and perspective in this section may not include all significant viewpoints.

Please improve the article or discuss the issue. May Learn how and when to remove this template message. Social democratic parties or parties with social democratic factions [ edit ] Austria: Social Democratic Party of Austria Australia: Australian Labor Party Belgium: Workers Party PT Canada: New Democratic Party Czech Republic: Czech Social Democratic Party Denmark: Social Democratic Party Finland: Social Democratic Party of Finland France: Social Democratic Party of Germany Greece: Movement for Change Greenland: Hungarian Socialist Party Iceland: Social Democratic Alliance India: Indian National Congress Ireland: Labour Party , Social Democrats Israel: Israeli Labor Party , Meretz Italy: Luxembourg Socialist Workers' Party Mexico: Party of the Democratic Revolution Netherlands: Labour Party New Zealand: New Zealand Labour Party Norway: Social Democratic Party Slovenia: Social Democrats South Korea: Spanish Socialist Workers' Party Sweden: Swedish Social Democratic Party Switzerland: Social Democrat Hunchakian Party Austria: Co-operative Commonwealth Federation France: French Section of the Workers' International Germany: Social Democratic Party Israel: Mapai , Alignment Italy: Social Democratic Workers' Party Poland: Social Democracy of the Republic of Poland.

Being based on a compromise between the market and the state, social democracy lacks a systematic underlying theory and is, arguably, inherently vague. It is nevertheless associated with the following views: Retrieved 10 August People argued that if the Stalinist Soviet empire, where the state controlled everything, showed socialism in action, then socialism was not worth having. They could be seen as a compromise between socialism and capitalism. They favored a mixed economy in which most industries would be privately owned, with only a small number of utilities and other essential services in public ownership.

Social democracy therefore came to stand for a broad balance between the market economy, on the one hand, and state intervention, on the other. Thus Bernstein summoned up Kant to point the way towards a politics of ethical choices. Social democrats have not accepted the materialist and highly systematic ideas of Marx and Engels, but rather advanced an essentially moral critique of capitalism.

England in and in Cited in Hollander , p. He expressed skepticism about state aid to the unemployed, for example, which he feared might merely sanction a new form of 'pauperism'. Cited in Steger , p. The Handbook of Neoliberalism. Tata McGraw-Hill Education, Retrieved 20 October German social democracy and the electoral consequences of the Agenda ".

Retrieved 12 July They supported and tried to strengthen the labor movement. The latter, as socialists, argued that capitalism could never be sufficiently humanized and that trying to suppress the economic contradictions in one area would only see them emerge in a different guise elsewhere e. Some hold out for a nonmarket, participatory economy. All democratic socialists agree on the need for a democratic alternative to capitalism.

As a result, capitalists will have little incentive to invest and the workers will have little incentive to work. Capitalism works because, as Marx remarked, it is a system of economic force coercion. It is idealistic to believe that tax concessions of this magnitude can be effected simply through electoral democracy without an organized labor movement, when capitalists organize and finance influential political parties.

Even in the Scandinavian countries, strong apex labor organizations have been difficult to sustain and social democracy is somewhat on the decline now. Archived from the original on 16 August Interviews with Ingmar Bergman. Swedish edition copyright ; English translation The Nobel Peace Prize ".

Politics Today 2nd ed. Nehru on Social Issues. International Encyclopedia of Political Science. Bardhan, Pranab ; Roemer, John E. A Case for Rejuvenation". Journal of Economic Perspectives. Archived from the original PDF on 30 December Retrieved 30 January Barrientos, Armando; Powell, Martin The Third Way and Beyond: Criticisms, Futures and Alternatives. The Battle for Asia: From Decolonization to Globalization. The Social Democratic Moment: Ideas and Politics in the Making of Interwar Europe. The Primacy of Politics: What's Left of the Left: Liberalism and Social Democracy in a Globalized World.

Retrieved 29 January Bernstein, Eduard []. The Preconditions of Socialism. Cambridge Texts in the History of Political Thought. Translated by Tudor, Henry. Blaazer, David []. The Popular Front and the Progressive Tradition: Socialists, Liberals, and the Quest for Unity, — Popular Movements in the Revolutionary Era. Britain, Ian [].

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A Study in British Socialism and the Arts, c. Bronner, Stephen Eric Political Tradition in the Twentieth Century. Under the Shadow of War: Fascism, Anti-Fascism, and Marxists, — Imperial Germany and the Great War, — The Two Red Flags: European Social Democracy and Soviet Communism since Routledge Companions to History.

Liberals and Social Democrats. The Future of Politics: Bury St Edmunds, England: Governing Purpose and Good Society". In Cramme, Olaf; Diamond, Patrick. After the Third Way: The Future of Social Democracy in Europe. Edinger, Lewis Joachim University of California Press. Anthony Crosland and the Affluent Society". In Black, Lawrence; Pemberton, Hugh. Modern Economic and Social History. After the New Social Democracy: Yet the precise definition of the welfare state and exactly what constitutes it remains implicit.

Indeed, the theoretical intent of the traditional sociological and economic inquiry into the welfare state has remained primarily concerned with the issues that are less about arriving at an understanding of the welfare state itself and more about addressing the social question as to what extent and under what conditions welfare provisions influence social and economic outcomes e.

Over time, however, a significant degree of intellectual progress has been made as the socioeconomic inquiry into welfare has turned toward historical and political reasoning cf. Hicks and Esping-Andersen More explicitly, the recent contribution of political science literature has shifted our attention to the political causes of welfare state development and cross-national variation. The welfare state is no longer being treated only as an independent variable but also as a dependent variable van Kersbergen ; cf.

Clasen and Siegel The theoretical progress advancing our understanding of welfare has grown in tandem with the specific historical development of the welfare state itself. During the early years of welfare state evolution, it was the economic and sociological approaches that almost exclusively dominated the welfare state expansion literature. In comparison, the retrenchment literature that has occupied the past two decades or so has been the domain of the political science approach Green-Pedersen and Haverland Against this backdrop, the most promising and intellectually inspiring progress was made as the emphasis turned to the confluence between different disciplinary traditions not only in answering why welfare states ever emerge and continue to develop, but also in accounting for why and how they differ.

It is also where primary explanatory variables typically stressed by each disciplinary tradition are exchanged that we see many of the most convincing accounts of welfare state development. Over a long period, a series of discrete, incremental theoretical developments have coalesced into new theoretical paradigms, most of which share the comparative tradition of welfare state development. The most fruitful and intellectually stimulating pieces of research have emerged in this tradition not only because comparative research often challenges our preconceptions about the nature of best practices and exposes us to alternative ideas, but also because it reminds us that there are vast differences between the welfare states of today.

The first generation of welfare state research was very much occupied with the question of why welfare states emerge, rather than why welfare states differ and how they differ. The logical conclusion drawn from this premise is one of convergence or technological determinism: It is therefore this industrial development that indirectly leads to greater social equality through higher welfare spending from which those in need benefit most Kerr et al.

The differences between welfare states are seen merely as being those of the degree of development. Clearly, this line of reasoning carries some compelling elements, not least because it offers a narrative that broadly fits with the historical path of development of the nations to which it was applied. Nonetheless, the core proposition of this logic of industrialism has been subject to a number of criticisms.

First, as is the case with the transnational diffusion literature that predicts the sequence within which welfare programs are adopted but not their form e. Second, most studies in the tradition focus on welfare spending levels, which may be misleading as these levels tell us very little about where and how money is being spent. Third, the perspective has a significant problem in accounting for the timing of change within societies as well as in explaining varying time lags between industrialization and welfare development.

The stability and the legitimacy of the state seem to be bound to technological success and prolonged economic growth Carrier and Kendall Unlike industrial determinism, the logic of capitalism approach or neo-Marxism regards welfare state development as either a response to threats to the interests of the ruling class i.

For neo-Marxists, social provisions emerge and progress because state action promotes the needs or requirements of capital accumulation ; because states take preemptive action to prevent working class discontent legitimation ; and because states require a response to class conflict. The extent of class struggle becomes the key determinant. The development of the welfare state is therefore a necessary response to the contradictions within capitalism. This neo-Marxist understanding of welfare state development is not uniform, however: To start with, instrumentalists heavily criticize the core claim of pluralists that the state plays the role of neutral broker in mediating conflicts between various interests.

It is the capitalist who monopolizes economic organizations, exercises strong influence on political organizations, and determines social provision depending on the necessity for capital accumulation. Hence welfare reforms basically function as a form of social control rather than of social investment Piven and Cloward ; Ginsburg ; Miliband Neither the basic structure of capitalist society nor the status, income, and political power of those who have already been influential are affected by social policy.

While this instrumental version of neo-Marxism comes closest to classical Marxist theory, a slight modification was made by those who stress the objective relation between the state and the capitalist. For this reason, the state might purse welfare provisions against the wishes of the capitalists. In other words, the stability of a relatively autonomous state is a precondition for the political system to serve the interests of capitalists in the long run Skocpol Of course, political conflict induced by the working class can be threatening to this political stability. Therefore, one of many important functions of the welfare state is to control and dismantle labor power.

Similarly, welfare provisions can be expanded as part of a cooperative strategy of control Piven and Cloward In comparison, the third variation puts more emphasis on political class struggle. Therefore, this working-class mobilization thesis explains that the development of the welfare state is dependent upon the strength of the labor movement and its political ability to implement collective welfare provisions through electoral control of the state. Strictly speaking, the class mobilization thesis should be seen not as a mere variation but as a distinctive theory that has its root in the neo-Marxist tradition because, unlike the logic of capitalism, which sees welfare spending as a means for capital to maintain its dominant position, it views welfare spending as a reflection of the political power gained by workers.

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Indeed, it is this thesis that has worked as a theoretical foundation for many. Nonetheless there are several valid objections.

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First, it places a strong emphasis on the harnessing of working-class power through its representative left-wing party. Indeed, a social democratic or labor party that represents the working class and highly centralized labor unions has been influential in driving welfare state expansion. However, socialist parties have not always played a dominant role in pushing forward welfare provision, especially in the early stage of welfare state development.

Failure to account for the role and, indeed, power of non-leftist parties is its key weakness Wilensky ; Borg and Castles Second, one of the assumptions that it makes is that the locus of decision-making power lies in parliaments. Thus great efforts have been made to collect data on leftist party representation in parliaments.

But parliaments are not always the locus of power; indeed, extraparliamentary organizations often play a major role in policy development George and Wilding Third, the ways in which working-class power is measured are problematic. Levels of unionization and percentages of votes gained by leftist parties in elections are typically used as proxy measures of working-class power Korpi And finally, as with much of the early work, this too was hampered by treating the development of welfare in a linear manner, using aggregate welfare expenditure as a proxy for welfare development.

A significant advance has been made in theorizing welfare state development. Yet much of early work tends to focus on finding one single powerful causal force within the well-established procedures and assumptions which are based on conceptions of linearity.

Instead, the second generation of welfare state research began to identify salient interaction effects of multiple factors. Yet later, in his masterwork Esping-Andersen , he refined and significantly changed this duality, abandoning an ideal mode of one extreme or the other, and identified three separate routes of welfare state instead. Breaking with his own past, Esping-Andersen points out that there are three particularly important factors at work: The identification of these clusters itself was the key contribution of his work. Yet what is more compelling is his explanation for the reasons why particular nations developed their welfare provision along one particular path or another.

He rejects the conception of an evolutionary development of social reform. For him, it is the interaction of three most important factors over time that produced a distinctive welfare state regime, much of which depended on the outcome of the power constellations during the formative phase of welfare states. For instance, his ideal-typical treatment of regime types sits uncomfortably with the real worlds of welfare capitalism Leibfried ; Castles and Mitchell ; Jones ; Ferrera ; Goodman and Peng ; Bonoli ; Castles ; White and Goodman ; Goodin et al.

Kasza dismisses the usefulness of welfare regimes typology altogether for it generates too many bad fits and argues that policy-specific comparisons could provide better offerings instead. And this perspective, which is claimed to have a much wider policy span than regime interpretations, shows the coherence and persistence of the clustering of nations over time despite fundamental transformations of the international and domestic political economy Castles and Obinger His typology therefore does not confine itself to a specific social program or a type of welfare state.

This construction of typology per se, however, is not entirely new. As Esping-Andersen himself acknowledges In fact, Esping-Andersen is not alone in stressing historical and institutional factors. Indeed, much of the recent literature focuses on the argument that institutions play a key role in the determination of social and political outcomes. This forms the core of an important body of theory that has attracted increasing attention see Baldwin ; Steinmo et al.

If the welfare state scholarship until the mids was dominated by works that examined the patterns, reasons, and ways of welfare state expansion, a significant shift began in the late s. Particularly important was the upheaval of the new streams of literature, especially in relation to welfare state retrenchment that brought about a renewed emphasis on the role of institutions.

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Evolved from the state-centered approach that criticizes the demand-driven approaches e. Institutions establish the rules of the game, have long-term effects, foster stability by resisting dramatic change, and condition the opportunities and incentives for political action or inaction. They are thereby seen as intervening or intermediate variables that shape behavior and political outcomes Krasner ; Gorges Historically informed work by the likes of Esping-Andersen , Baldwin , Immergut and Skocpol could all be grouped under this tradition, particularly in their articulation of the ways in which institutions and interests interact and in their claims that different paths of welfare state development have occurred over an extended period of time.

It is recent debates surrounding globalization and the crisis of the welfare state, however, that have brought with them a fresh wave of theorizing in the realm of the institutional analysis of social policy. Led by the work of P. Pierson , who examined the attempts of conservative governments in the United Kingdom and the United States to cut back entitlements and weaken the political foundations of the welfare states, the politics of welfare state resilience came into the center stage of welfare state literature.

Obviously, the coming into office of Margaret Thatcher in and of Ronald Reagan in sparked the academic interests, backed by conservative academics who claimed that the welfare state had become a significant source of social and economic problems instead of solutions Murray ; Mead ; Marsland Also, significant changes in the economic environment practically ended one of the key foundations of the Golden Age welfare state: For many welfare states, the conventional method of pursuing full employment has been through neo-Keynesian interventions. However, substantial shifts in productive activity have led to problems of job security and deterioration in pay for the jobs most subject to competition.

Social foundations in postindustrial economies are also fundamentally different from those in the immediate postwar period Esping-Andersen The postwar welfare state settlement was particularly directed at meeting needs during interruptions of the industrial wage, while care provisions were mostly assumed to be widely available informally. But the increasing rate of female labor participation led to demands for more equal opportunities and for care services.

On the one hand, the growth in jobs was confined within the service sector, which tended to produce low or unskilled jobs. Low productivity growth in this sector compared to the manufacturing sector resulted in a downward pressure on wages. On the other hand, a low-skilled service sector afflicted with an abundance of female labor placed added pressure on wages and on care industries. Both generated a dilemma between job growth in the service sector and rising inequality Esping-Andersen At the same time, the shift away from manufacturing tended to weaken union power and labor-associated political parties which were traditionally understood to be able to mobilize political pressure for welfare state expansion.

The long list of formidable challenges and pressures that would potentially threaten the viability of the welfare state or even its survival exerted a combined pressure on traditional forms of state welfare both in terms of the range of options available for governments to promote employment and finance social provision, and in terms of increasing risks, needs, and demands as a result of labor market and family changes Baumol ; Iversen and Wren ; Esping-Andersen ; P. Pierson a ; Taylor-Gooby In short, the Golden Age of postwar welfare state expansion and its achievement were being viewed as having grown to its limits cf.

An increasingly interdependent world economy has also led many scholars to anticipate a significant degree of convergence Scharpf ; Mishra ; Greider ; Martin and Schumann ; Gray On the other hand, many studies of welfare state trajectories during the s and the early years of the twenty-first century indicate that various welfare states respond differently to more or less similar sets of challenges, thereby negating a second coming of convergence thesis.

The key to this divergence has been the politics of reform in each country, which has produced very different results and reform paths Esping-Andersen ; Scharpf and Schmidt a ; b ; Huber and Stephens ; P. The gap between the theoretical prediction and empirical reality gave rise to a new body of literature with substantially different aims. Pierson a ; Huber and Stephens ; Swank And these new factors at play make the logic of welfare state retrenchment very different from welfare state expansion P. The key questions that dominated the academic inquiry of the late twentieth century were concerned with how and why existing welfare state regimes either seem to resist change or appear to change only incrementally according to a built-in regime logic that seems to reaffirm, if not aggravate, the difficulties that are typical for the regime Starke First, welfare provisions established during the period of postwar welfare state expansion created their own program-specific constituencies that subsequently led to the political unpopularity of cutbacks Boeri et al.

Second, deeply entrenched welfare state institutions exert path-dependent rigidity. Any radical attempts to alter them are severely constrained by institutional structures and existing policy designs which are intrinsically very difficult to change also. Put simply, history matters for institutional development P.

A number of scholars have contributed to this resilience thesis by adding to or refining the argument by stressing a specific dimension of institutional analysis Green-Pedersen and Haverland Overall, it is not a political logic that governs welfare state adaptation but an institutional logic that explains it. The renewed emphasis on the functioning of institutions is broadly divided into two central considerations: First, the institutional fragmentation of political systems makes welfare reform either more difficult or relatively easier.

Large-scale retrenchment is often less likely to be envisaged in systems with a high degree of vertical and horizontal fragmentation of power due to the higher number of veto players. In systems with federalism, a bicameral parliament and inclusive electoral system provide various points of veto power which substantially reduce the room for governments to make reforms Immergut ; Bonoli ; Huber and Stephens ; Swank ; Tsebelis ; Obinger et al.

Conversely, those countries with a relatively small number of veto players could potentially enjoy a high concentration of political power. Nonetheless this remains a potential, for a concentration of power is often accompanied by a concentration of accountability Pal and Weaver In those countries, for instance, dissatisfied voters can easily identify who is responsible for unpopular cutbacks.

Politicians ultimately seek to be reelected, and hence try to avoid blame. How, then, have those countries with a high degree of concentration of power managed to cut back on welfare entitlements? Pierson highlights three particular strategies governments use to avoid blame: Those countries with power fragmentation may be better positioned to make retrenchment reforms but they are also equally vulnerable to blame sharing, while those countries with power concentration seem to have facilitated various strategies of retrenchment. Importantly, in this context, the execution of these strategies is often highly dependent upon institutional structures and existing policy designs.

Second, welfare state institutions themselves generate enduring effects. Social policies themselves, either intended or unintended cf. Baldwin ; , tend to create their own institutions that are often difficult to reform because, as most vividly outlined by the experience of pensions reform e. The overall notion of path dependency is also present in the welfare regimes literature in the sense that distinctive welfare regimes produce distinct policy legacies which in turn largely determine both the extent of change and the types of change that may be possible.

Pierson ; a ; b , it was more of a sectoral dynamic that generated varying policy outcomes depending on the specific social policy areas in question. And they claim that examining preexisting pension arrangements provides the best explanation for the paths of reform chosen. In both cases, specific regimes, once consolidated, tend to produce unique policy path dependencies that in turn overdetermine solutions to new problems as well as strategies of welfare reform cf.

Scharpf and Schmidt a ; b. The idea of path dependency tending to lock the possibility of change into a predetermined trajectory seems somewhat overdone, however, ignoring the impact of subsequent changes in, for instance, power constellations. Indeed, preceding developments are often corrected or programs completed by complementary institutions. Hall ; Even in the prototype Scandinavian redistributive welfare states, contribution-based schemes providing earnings-related benefits are increasingly supplementing, if not replacing, their universal flat-rate benefits systems.

Occupationally separated schemes in conservative welfare regimes have approached near universalism, making the distinction between different occupational categories more or less meaningless.

Gyu-Jin Hwang

Buddhist Christian Islamic Jewish left. The Soviet Union and the West since Publication of the US Social Security Administration providing concise information on the coverage, qualifying conditions and benefit levels, and the financing of the main social security programs in countries all over the world. Ideas and Politics in the Making of Interwar Europe. Forced labour plays an important part in its economic organisation.

Thus far, much of scholarly endeavor has been either about welfare state expansion or welfare state retrenchment, and accordingly the resilience of welfare states in relation to change. More recently, though, a number of research projects have begun to examine the new risk configurations that have emerged in the transition to postindustrial societies and that in turn have challenged welfare state arrangements that were established in the context of old, traditional risk contexts of industrial societies Taylor-Gooby ; Bonoli ; Armingeon and Bonoli Numerous risk categories peculiar to postindustrial restructuring make an entry Esping-Andersen Yet the central driving force of this postindustrial change is the notable rise in the international mobility of capital, which has an unprecedented impact on the welfare state.

Drawing from the international relations literature, Evans and Cerny argue that the era of postindustrialism is remarkably different from the period that preceded it. In the postwar boom period, social policy was a relatively autonomous field of policy, a domestic issue that was unimpeded by wider economic concerns and so favorable to continual increases in state spending on welfare state activity. A similar line of argument has been developed in the sociological literature too. Much of this begs serious questions about the ability of distinctive welfare regimes to survive, particularly if their norms clash with those of the competition, or Schumpeterian workfare state.

While many have been keen to proclaim the end of the high-spending welfare state and welcome convergence on a more limited model of welfare, others have pointed to a continuing diversity in welfare provision and, crucially, the generally incremental nature of welfare reform, and consequently the continuation of distinct welfare regimes.

These two types are the product of the ways in which particular combinations of institutions cluster in order to solve coordination problems that characterize the rules governing industrial relations, vocational training and education, corporate governance, interfirm relations, and internal relations with employees. Firms are seen as the central actors in the economy whose behavior aggregates into national economic performance.

Mares and Estevez-Abe et al. According to them, contrary to the view that social policy is often thought to interfere with labor markets by raising labor costs or the reservation wage, social policies can also improve the operation of labor markets from the perspective of the firm. Unemployment benefits with high replacement rates, for instance, can improve the ability of firms to attract and retain pools of labor with high or specific skills.

Saving the World Economy: Paul Krugman and Olivier Blanchard in Conversation

Disability benefits and early retirement benefits can also allow firms to release labor without violating implicit contracts about long-term employment. So they argue that specific types of political economies lead toward distinctive welfare states not least because relative abundance in certain skills in a given country constitutes a comparative advantage for firms in that country.

The existence of institutional complementarities, in short, is therefore the theoretical core of this highly influential approach. As discussed earlier, this has led to a significant rethinking of the sustainability of welfare state. Hall and Midgley However, this is at odds with the history of welfare policy development in Western Europe. In fact, the presupposed incompatibility of the hierarchical relationship between social policy and economic policy has been seriously challenged. For instance, the United Nations Research Institute for Social Development has launched a series of publications that are in line with welfare state renewal literature.

Much work under the heading of Social Policy in a Development Context is organized in such a way as to point to the interlocking relationship between economic policy and social policy. Social policy goals are not necessarily in conflict with economic goals. Rather, they can be merged to build up a modern industrial market economy Mkandawire ; Kangas and Palme ; Kwon a. The first social policy measure introduced by Bismarck was intended not only to undermine political support for the socialist movement in Prussia but also to facilitate industrialization.

Hence these initial offerings were not designed to meet social needs and protect against social risks but to serve political and instrumental objectives Rimlinger The Swedish invention of an active labor market policy in the s was to battle against mass unemployment, not by providing income maintenance through creating social insurance but by equipping the recipients with the necessary skills to enable them to enter the labor market, thereby contributing to economic development Dahl et al. Like many developing countries, Nordic countries, too, in their early years of industrialization used their pension funds as a source of capital accumulation.

In Sweden, for instance, supplementary pension funds were used to provide housing in urban areas, while the national pension funds in Finland were used to build up national basic infrastructure Kangas and Palme Both the Bismarckian tradition and the Scandinavian social democratic tradition share this productivism: What often characterizes developing countries is not simply a lack of democracy but also, more importantly perhaps, the absence of a legitimate state and a pervasive formal labor market, both of which are often considered to be prerequisites for the development of social policy.

The state in the South often lacks political legitimacy, hence being only a weak institutional actor.