New Perspectives on the Welfare State in Europe

Catherine Jones, Dr Catherine Jones Jones

• Publisher: Routledge
• Year: 2002
• Print ISBN: 9781138159211
• eBook ISBN: 9781134912346
• Topic: Medicine
• Subtopic: Health Care Delivery

Not since the 1940s has there been such comprehensive scope for uncertainty within and about Europe. New Perspectives on the Welfare State in Europe offers an appraisal of comparative social policy and applies it to current uncertainties concerning European communities and European-North American and East Asian relationships.
Including contributions from Deakin, Klein, Leibfried, Mishra and Rose the work should provide essential reading for students, researchers, lecturers and policy makers in social policy, politics and sociology.

Part I
On the state of the art

1
O'Goffe's tale
Or what can we learn from the success of the capitalist welfare states?

Rudolf Klein

This paper starts with a puzzle. Looking back on the literature on the welfare state published in the 1970s and the early 1980s (Moran, 1988), there is a striking asymmetry. On the one hand, there are the grim prophecies of crisis —if not worse—threatening the welfare state in capitalist societies. On the other hand, there is the almost total silence about the likely fate of the welfare state in communist societies. Yet if we look around us now, there is a very simple observation to be made. On the one hand, the welfare state in capitalist societies has survived the crisis in remarkably good health. On the other hand, the welfare state in communist societies is going through precisely the same paroxysms of reconstruction as the regimes that created it. It is a contrast which, as I shall argue in this paper, has some important implications for both the practice and theory of comparative social policy studies.

The best starting point for exploring this puzzle is perhaps O’Goffe’s tale. In constructing O’Goffe’s tale, I have taken the three leading exponents of the neo-Marxist thesis (O’Connor, 1973; Gough, 1979; Offe, 1984) and conflated the main features of their accounts. The result may not be fully fair to any individual member of the trio—and is not intended to be so—but it gives a sense of the logic of their argument. For what distinguished O’Goffe from the myriad of other scholars wringing their hands about the plight of the welfare state at a time of economic turmoil was that he sought to explain these troubles by invoking the nature of capitalist states. In O’Goffe’s view this was not just a crisis. It was something much more serious: a contradiction. In other words, the difficulties of the welfare state did not just reflect contemporary or evanescent problems of capitalist societies but were inherent in their nature. They were inherent because of the in-built, inescapable conflict between the needs of legitimation, consumption and the demands of capital accumulation. To maintain political legitimacy, the capitalist state had to spend on welfare services and programmes; to maintain the machinery of capitalism, however, it had to promote capital accumulation and ensure profits. And all this was in addition to freeing enough resources for consumption. The development of the welfare state threatened the process of capital accumulation. While the Keynesian Welfare State had for 30 years created the illusion that both objectives of policy could be reconciled in an ever-more prosperous world, the loss of belief both in Keynesian theories of economic management and in the compound arithmetic of growth meant that conflict was inevitable. The conflict could be resolved and the welfare state saved, O’Goffe concluded, only in a new kind of socialist society.

There were important insights in this approach. It was a much-needed antidote to the kind of bland, historicist accounts of the welfare state typical of the hitherto dominant Marmuss school.¹ This tended to present the rise of the welfare state everywhere as an inevitable process: a milestone in the progress of mankind. O’Goffe rightly argued that welfare policies involved conflict about resources, and therefore raised questions about the distribution of power in society. Equally important, he pointed out that welfare policies could not be separated from economic policies, and that both are inevitably shaped by political institutions. In short, O’Goffe concluded, the welfare state could be understood only as the product of economic and political forces: as part of the total social environment.

The impact of O’Goffe’s critique was all the greater because it echoed, and in many respects overlapped with, that of Hayman.² The New Right also argued that the welfare state would destroy capitalism. The growth of social spending, so the case ran, was undermining work incentives, sapping the ability to invest, creating self-serving welfare bureaucracies and fuelling inflation. Worse still, it was a threat to liberty: the political system was being corrupted (as well as being overloaded) by having to take decisions about the distribution of resources that should be left to the market. Not the least important common element between O’Goffe and Hayman was their shared distrust for the capacity of Western political systems. For very different reasons, they had little faith in politics—seen as a dialogue between groups with different interests but a common concern to solve societal problems— as a way of tackling the difficulties posed by rising social expenditures in times of economic stringency. Indeed, rising social expenditure was seen as a symptom of political failure: democratic politics, it was often argued (Brittan, 1977), generated extravagant public expectations which in turn led to excessive expenditure.

O’Goffe had nothing to say, however, about the welfare state in communist states. Indeed, on his own premises, there was no need to say anything about this. For was not the whole point of his argument that the crisis—indeed contradictions—of the welfare state derived from the very nature of capitalist societies? There was no need to test the premises, even though some of us suggested at the time that it might be a good idea to do so (Klein, 1979): that communist societies might well have the same dilemmas —such as the conflict between meeting needs and maintaining work incentives and between the demands of capital accumulation and social spending—as capitalist ones. O’Goffe clearly took the premises to be self-evidently true. In fact, the events of the past few years suggest that they were self-evidently wrong: that the same conflicts, contradictions or crises afflicted the communist Welfare States (CWS) as the Keynesian Welfare States (KWS). The real difference lay in the fact that while the capitalist societies of the West were able to cope with the supposedly irreconcilable contradictions, the communist societies of the East collapsed under their weight. While the KWS has emerged virtually intact from the 1980s almost everywhere—a point to which we return below—the CWS is crumbling in the wake of the collapse of the regimes that created it.

A number of implications can be drawn out from O’Goffe’s tale. The first is about the logic of political analysis. Before we can make a statement about cause-and-effect in a particular society—or class of societies—we surely have to be able to test it against a counter-factual. Otherwise, we are operating in a solipsistic universe. The point is as obvious as it is frequently neglected. The comparative method is not just a luxury add-on to the study of social policy but an essential component if we are to avoid repeating O’Goffe’s blunder in over-predicting the crisis of the welfare state in the West while under-predicting its collapse in the East.

The point can be simply illustrated. Take O’Goffe’s assertion about the conflict between the competing claims of political legitimation, capital accumulation and consumption. What evidence is there to support the assumption that this is somehow peculiar or unique to capitalism? None. But if O’Goffe had chosen to search for evidence that such conflict was also apparent in communist regimes, he might well have found it; certainly there are hints that communist regimes used welfare spending as a means of buying legitimacy and popularity (Ferge, 1986) when they failed to deliver the goods of economic prosperity or political acceptability. Indeed, it might quite plausibly be argued (using the O’Goffe line of reasoning) that, in doing so, they damaged their capacity for capital accumulation and further undermined their legitimacy, so creating what proved to be a fatal downward cycle.

But of course it may be argued in O’Goffe’s defence that information about social policy in the communist bloc was remarkably scant at the time (as it still is). Therein, however, lies the second implication which can be drawn out from O’Goffe’s tale. It suggests the need for self-examination in the social policy community. Why was there so little information in the 1970s and 1980s? And why, as anyone trying to teach comparative social policy soon found, were most of the available studies unsatisfactory in quality? Part of the answer lies, obviously, in the fact that communist regimes did not release accurate data or encourage research; even now it is extraordinarily difficult to establish with precision, for example, what percentage of the national income is spent on health care (or education and the social services) for purposes of comparison. But this is an incomplete answer. Even when there was evidence of the failure of the communist regimes in the welfare field—notably that provided by rising mortality (Wnuk-Lipinsky and Illsley, 1990)—it tended to be neglected in comparative social policy studies.

Similarly, the evidence of parallelisms between capitalist and communist welfare states tended to be overlooked: for example, Wilensky’s conclusion (1975) that much the same (non-ideological) factors explained the growth of welfare state spending in capitalist and communist countries. It is therefore difficult to resist the conclusion that the under-prediction of crisis reflected both the linguistic incompetence and ideological predispositions of most of the scholars in the field. There has always been, and continues to be, a serious shortage of scholars in the field equipped with the languages required for the serious study of East European welfare systems. And there is a lingering tendency to use comparative studies as a search for ammunition in domestic political battles: to be able to cite examples of how much better things are done in other (preferably non-capitalist or left-wing) countries.

This is not to imply that O’Goffe was necessarily or invariably uncritical of the welfare state in communist societies. Indeed, some Marxists (Deacon, 1983) argued that the social policies of the Eastern bloc countries were, in themselves, evidence that these countries could not be considered to be fully communist or socialist societies. Despite the limitations of their analysis, dependent as they were on English-language sources, they were able to see the multiple inadequacies of the CWS. The analysis also conceded that, to establish a fully socialist welfare state, there would have to be a ‘class struggle’ against the political leadership in Eastern Europe. But it crucially stopped short of considering whether a form of economic organisation that rested on the collective ownership of the means of production was compatible with a fully socialist welfare state. Might not the capture of the welfare state by the self-interest of the party bureaucracy represent an inherent, unavoidable contradiction in communist societies? Rather than conceding this point, the Marxist literature sought to argue that some communist regimes had demonstrated that truly socialist social policies were feasible. In Deacon’s case, the examples cited were China, Cuba and (incredibly) Mozambique.

In short, the Marxist literature represents the search for a social policy Utopia, i.e. a society where there is no conflict betwe...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• ILLUSTRATIONS
• CONTRIBUTORS
• EDITORIAL INTRODUCTION
• PART I: ON THE STATE OF THE ART
• 1. O'GOFFE'S TALE: OR WHAT CAN WE LEARN FROM THE SUCCESS OF THE CAPITALIST WELFARE STATES?
• 2. SOCIAL POLICY IN THE POSTMODERN WORLD: THE WELFARE STATE IN EUROPE BY COMPARISON WITH NORTH AMERICA
• PART II: ISSUES FROM BRITAIN
• 3. DEVELOPMENTS IN SOCIAL SECURITY POLICY
• 4. ENCOURAGING HOME OWNERSHIP: TRENDS AND PROSPECTS
• 5. PRIVATISM AND PARTNERSHIP IN URBAN POLICY: SOME COMPARATIVE ISSUES
• 6. RETURNER AND RETAINER POLICIES FOR WOMEN: SHORT-TERM OR LONG-TERM GAINS?
• PART III: PROSPECTS FOR EUROPE
• 7. TOWARDS A EUROPEAN WELFARE STATE?: ON INTEGRATING POVERTY REGIMES INTO THE EUROPEAN COMMUNITY
• 8. THE END OF THE MIDDLE WAY?: THE SWEDISH WELFARE STATE IN CRISIS
• 9. DEVELOPMENTS IN EAST EUROPEAN SOCIAL POLICY
• 10. THE PACIFIC CHALLENGE: CONFUCIAN WELFARE STATES
• PART IV: ON THE STATE OF THE ARGUMENT
• 11. BRINGING FREEDOM BACK IN: RETHINKING PRIORITIES OF THE WELFARE STATE