Three+Worlds+of+Welfare+Capitalism

Summary by Namalie

· Capitalists preoccupied with relationship between capitalism and welfare, specifically the market (and property) and the state (democracy) · State intervention bad – stifles the equalizing process of competitive exchange and creates monopolies, protectionism and inefficiency · While there were differing opinions on whether there should be political advocacy, all liberals agreed that the way to go was with maximum free markets and a minimum of state interference · Revolutionary theory – while today, laissez-faire may not be that desirable, in their day, they were fighting against corruption and mercantilist protectionism · Afraid of democracy – liberals discovered that democracy would usurp/destroy the market – this led to conservative political economy, which wanted to stop the democratic impulse. If there is democratic mass participation, social order collapses · Social Democracy Model – balance of class power fundamentally altered when workers enjoy social rights, for social wages lessen worker’s dependence on the market and employers, and thus turns into a potential power resource o Embraced parliamentary reformism – premised on two arguments: (1) workers require social resources to participate effectively and (2) social policy is a precondition for economic efficiency o Social policy would result in power mobilization – by eradicating poverty, the welfare state increases political capacities and diminishes the social divisions that are barriers to political unity among workers
 * Gøsta Esping-Andersen, Three Worlds of Welfare Capitalism, chap. 1, pp. 9-34. **
 * Classical Political Economy **

· Difference between contemporary and classical political economy: o Contemporary is a positive science – no more normative prescriptions o Contemporary uses comparative and historical method; classical PE no interest in historical variability · Systems/Structuralist Approach o __ Industrial Society __ : industrialization makes social policy both necessary and possible. Market is no adequate substitute because it caters to only those who are able to perform in it. Welfare function appropriated by the nation-state. Modern bureaucracy: rational, efficient, universalist, manages collective goods, center of power o __ Structuralist Marxism __ : welfare state inevitable product of capitalism. Capital accumulation creates contradictions that compel social reform. The state is relatively autonomous from class directives · Institutional Approach o Any effort to isolate the economy from social and political institutions will destroy human society. The economy must be embedded in social communities in order for it to survive (Polyani) o Welfare states emerge more readily in small, open economies that are vulnerable to international markets (Katzenstein 1985). o Impact of democracies: majorities will favor social distribution to compensate for market weakness or market risks. · Why is the welfare state itself a power resource? o Wage-earners in the market are inherently atomized and stratified – compelled to compete, insecure, no collective solidarity · What are the conditions for power mobilization? o Power depends on resources that flow from electoral numbers and collectibe bargaining o But power of one agent depends on the resources of contended forces, historical durability and patterns of power alliances · Objectives to the class-mobilization thesis à cannot assume that socialism is the natural basis for wage-earner mobilization o Locus of power may shift from parliaments to neo-corporatist institutions o Capacity of labor parties to influence welfare-state development is circumscribed by structure of right-wing party power o Linear view of power – numerical increase in votes doesn’t necessarily lead into more welfare-statism · Have to think in terms of social relations, not just social categories – need an interactive model such as the coalition approach
 * Political Economy of the Welfare State **
 * Social Class as a Political Agent **

· Literature on defining the welfare state is underdeveloped · Welfare state involves state responsibility for securing some basic modicum of welfare for its citizens – this definition skirts the issue whether social policies are emancipatory or not. Studies usually just assume that the level of social expenditure is a reflection of a state’s commitment to welfare – but this is not a good indicator, for example, low expenditure on some programs may signify a welfare state more seriously committed to full employment · Welfare state definition needs to involve social rights and state activities o Esping-Anderson recommends a focus on social citizenship that grants social rights – if social rights are given the legal status of property rights, if they are inviolable, if they are granted on basis of citizenship rather than peformance, then will entail decommodification of the status of individuals vis-à-vis the market o Must take into account how state activities are interlocked with the market’s and the family’s role in social provision § Rights and de-commodification: de-commodification occurs when a service is rendered as a matter of right and when a person can maintain a livelihood without reliance on the market § State social insurance with strong entitlements
 * Re-Specification of the Welfare State **

· Social insurance model: form of class politics. Had two aims: consolidate divisions among wage earners and to tie the loyalties of the individual directly to the central state authority · State corporatist model: establishment of privileged welfare provisions for the welfare service – like the old guild tradition · Universalistic system – promotes equality of status; all citizens are endowed with similar rights, irrespective of class or market position
 * Welfare System and Stratification **

· __ Liberal Welfare State __ : modest social insurance plans, modest universal transfers. o Benefits cater mainly to clientele of low-income, working-class state dependents o Minimizes de-commodification effects o Effectively contains the realm of social rights o United States, Canada, Australia · __ Corporatist __ : granting of social rights never a seriously contested issue – what predominated was the preservation of status differentials o Rights attached to class and status o Corporatism subsumed under a state edifice that was ready to displace market as a provider of welfare o Austria, France, Germany, Italy · __ Social Democratic __ : a welfare state that would promote an equality of the highest standards, not an equality of minimal needs as was pursued elsewhere o Mix of highly de-commodifying and universalistic programs o Model crowds out the market – universal solidarity in favor of the welfare states o All benefit, all are dependent o Preemptively socialize the costs of family-hood – not only to service family needs but also to allow women to choose work rather than the household o Fusion of welfare and work
 * Welfare-State Regimes **

· Alternative to a simple class-mobilization theory of welfare-state development. · Motivated by the analytical necessity of shifting from a linear to an interactive approach with regard to both welfare states and their causes. · Historical forces behind the regime differences are interactive – pattern of working-class political formation, and political coalition-building in the transition from a rural economy to a middle-class society
 * Conclusion **