Session 11 - Welfare States

Question 1

What is a Welfare states? Definition

Answer 1

A set of policies, institutions, regulations aimed at:

• Subsistence of population (Lebensunterhalt der Bevölkerung)
• but beyond mere survival:
  a) basic needs: income, housing
  b) insurance against risks: health, unemployment
  c) investment for emancipation: education, services
• Well-being of every citizen: economic, social, personal (as well?)

Question 2

What are the principles of the welfare state?

Answer 2

1. basic need (negative freedom) and equal opportunities (positive freedom) –> (as) public responsibility
2. Equity: redistribution vs. individual meritocracy (Leistungsgesellschaft)

Question 3

What are the types of benefits of a welfare state?

Answer 3

1. cash (consumptive): child benefits, unemployment, pensions
2. In-kind services (investment): childcare, education, health, transport

Question 4

What are further fundamentals of a welfare state?

Answer 4

A Public-Private partnership: (public) equity and (in private) efficiency

Variability across space and time

Link with capitalist trajectory (VoC, GMs): independent variable, outcome, both -> crucial element to consider!

Question 5

Where does the Welfare state come from?

Answer 5

WS as evolving institution

Industrial Revolution -> humans (their labor) as commodity on the market
-> disembeedding from family, feudalism, guilds, church –> pauperization (Oliver Twist e.g.) Verarmung/Verelendung

productivity gains lead to the resources for welfare state
with the organization of labor: trade unions and socialist movements

partially: rise of nation states and secularization vs. Catholicism:
- catholic: poverty as God’s will -> minimal institutional self and value of mendicity
- protestands: poverty as individual fault -> ban on begging and work as calling

Question 6

Where on a historical scale does the welfare state occur? (from origins to WWII)

Answer 6

origins? to WWII
first: French Revolution principles: liberte, égalité, fraternité

to Bismarck’s Sozialstaat in 1880s:
- extension of privileges of Junkers (preußischer Adel)
- Value-driven “practical Christianity”
- but also pragmatic strategy: social insurance for blue-collar workers -> thus incentive for social investment in system -> gives an competitive advantage

then spread in the western world: productivity, unity, and social peace

more affordable alternative to communism: compromise between labor & capital

break first half of 20th century: national interest rather than individual interest -> warfare and welfare synonymous (more on weapons than on good/services of people)

Question 7

Where on a historical scale does the welfare state occur? (between 30s-WWII and the 70s-80s)

Answer 7

Great Depression and WWI+II -> state interventionism

then back from war spending to welfare spending

development of fully-fledged welfare sates: “cradle-to-grave” coverage

fordist growth with balanced negotiations between labor&capital

relatively closed economies: no cross-border race to bottom and relative distribution
-> differences btw. countries remain

Question 8

Where on a historical scale does the welfare state occur? (from the 80s to today)

Answer 8

Crisis of welfare state:

• economic: supply-side shocks and inflation -> state as part of problem, not solution
• political: capital vs. labor
• demographic: aging, declining fertility, family disaggregation -> fewer contributors, more beneficiaries
• Ideological: moral hazard, post-materialism, feminism, neoliberalism

–> Reorientation of welfare spending: conditionality work-welfare and different priorities btw. social strata (Gesellschaftsschichten)

Question 9

What a the current drivers of the evolving institution of the welfare state?

Answer 9

New challenges:
- Globalization: power to capital and race to the bottom
- low post-2008 growth: private banking -> public debt
- deindustrialization and tertiarization
- increasing private sector services and inequality ->
- ethnic heterogeneity: pros vs. cons
–> in general PERMANENT Austerity: rising needs vs. shrinking resources?

Also - new welfare state paradigm: from consumptive (demand-side) to investment spending (supply-side): social inclusion (equity) and economic growth (efficiency)
-> transition to service and knowledge economy

and last: rise of private insurance and its societal effects

Question 10

What are the welfare state regimes? 1st slide?

Answer 10

esping-andersen paper: threw world of Welfare capitalism

• not only Toal welfare spending, but also structure of spending:
  a) underlying goals of spending
  b) institutions related to welfare: industrial relations, education…
  c) types of funding, composition of spending, recipients

–> thus three main welfare state regimes based on:
- state-market-family links: public-private partnership
- social stratification
- citizenship vs. employment entitlements

Question 11

What are the main principles of the first, the liberal regime? where can one find it?

Answer 11

Mostly Anglo-Saxon countries (e.g. US)
modest welfare spending/GDP (to)

strict entitlement rules (mean-tested (bedarfsabhängig)) with tight bureaucratic control -> last resort minimum benefits (thus tax-financed)

push market-based system with private insurance:
- minimum social assistance
- social stigma: duality beneficiaries vs. non-beneficiaries
- only basic compulsory insurance schemes -> middle classes have to add private plans

complementary institutions:
- industrial relations: decentralized and deregulated
- education: private vs. (poor) publics

• high inequality: large low- and high-wage (service sector) strata

Question 12

What are the principles of the seconds, the conservative welfare state regime?q

Answer 12

mostly in continental European countries (e.g. Germany)

high welfare spending/GDP

(compulsory) social insurance for employed (contribution-based) -> SEGMENTATION (btw. those who work and those who don’t)

Family as crucial welfare unit:
- male breadwinner model
- inactive women have access to benefits via husbands
- addicitional layer of social assistance <-> thus family not enough

complementary institutions:
- industrial relations: coordinated, but dualized
- education: segmented system, specific skills and vocational training

segmented equality: industrial core vs. low-end services and small public sector

Question 13

What are the principles of the third, the social democratic regime?

Answer 13

mostly Scandinavian countries e.g. Sweden

very high welfare spending/GDP

universalistic (tax-financed)citizenship-based benefits: no duality beneficiaries and non beneficiaries -> no stigma!

“State as parent”:
- replacements of/addition to family when it comes to children, elderly, sick
- emancipation of vulnerable groups as goal
- female employment and dual-earner families (not male breadwinner)

complementary institutions:
- industrial relations: centralized collective bargaining with social democracy still central
-education: public, free, high education rate

high-level equality: high-end services and public sector

Question 14

What is the forth, the southern regime?

Answer 14

not part of initial esping-anderson paper; e.g. Italy and Spain

Modest-high welfare spending/GDP

(segmented clientelistic) social insurance (partly tax-financed) consumptive vs. investment spending in favor of core male breadwinner

family NEVER replaced by welfare state:
- male gerontocracy (Altersherrschaft): high pension spending vs. female and youth employment low
- no passive state benefits to housewives as in continental europe
- dependence on (patriarchal) parental household

complementary institutions:
- trade unions: fragmented and militant
- Education: state vs. church influence, clientelistic, export-led

dualized inequality: insiders vs. outsiders (women/young)