Development of Welfare States in Europe and America

Peter Flora

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351304900
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This volume seeks to contribute to an interdisci-plinary, comparative, and historical study of Western welfare states. It attempts to link their historical dynamics and contemporary problems in an international perspective.

Building on collaboration between European-and American-based research groups, the editors have coordinated contributions by economists, political scientists, sociologists, and historians. The developments they analyze cover a time span from the initiation of modern national social policies at the end of the nineteenth century to the present.

The experiences of all the presently existing Western European systems except Spain and Por-tugal are systematically encompassed, with com-parisons developed selectively with the experi-ences of the United States and Canada. The devel-opment of the social security systems, of public expenditures!and taxation, of public education and educational opportunities, and of income inequal-ity are described, compared, and analyzed for varying groupings of the Western European and North American nations.

This volume addresses itself mainly to two audi-ences. The first includes all students of policy

problems of the welfare states who seek to gain a comparative perspective and historical under-standing. A second group may be more interested in the theory and empirical analysis of long-term societal developments. In this context, the growth of the welfare states ranges as a major departure, along with the development of national states and capitalist economies.

The welfare state is interpreted as a general phenomenon of modernization, as a product of the increasing differentiation and the growing size of societies on the one hand, and of processes of social and political mobilization on the other. It is an important element of the structural convergence of modern societies by its mere weight in all countries and at the same time a source of divergence by the variations within its institutional structure.

Part One

What Is the Welfare State?

Chapter 1

The Historical Core and Changing Boundaries of the Welfare State

Peter Flora and Arnold J. Heidenheimer

I. British Experience and the History of the Concept

The question of the nature of the welfare state can be related to the process of its “discovery” and labelling. In one way it is strange that, according to the chronology which has now become conventional, the welfare state should have been growing for several generations before it was recognized and labelled by this name. But from a broader perspective on the historical introduction of new political concepts it is not so strange. Even an entity with seemingly clear-cut delineations, like the British Empire, took several centuries to become recognized and labelled for what mapmakers then informed all school children it had come to be.

The German Empire, by contrast, appeared on maps rather suddenly in 1871, largely as the culmination of several successful European wars. In 1878 it initiated a governmental campaign to destroy the growing social democratic movement, and then the emperor, in his Social Message of 1881, laid the basis for the subsequent innovative social security legislation. Reviewing this accomplishment in a 1915 volume celebrating the five hundredth anniversary of the establishment of the Hohenzollern rule in Brandenburg-Prussia, Otto Hintze admitted that it had not succeeded in shifting working class loyalties, as Bismarck and Emperor William had hoped. Still, he concluded, “it provides the government with a good conscience, and enables it to take a strong and decisive position vis-à-vis the lower classes and their demands, as is befitting the traditions of the Hohenzollern state.”¹

It would have been very dissonant with those traditions if the Prussians had referred to their creation as a “Wohlfahrtstaat.” The terminology they employed was strictly bureaucratic and by implication reserved to the emperor the power of setting larger national and societal goals. Thus, the German Interior Ministry mounted an exhibition at the 1904 St. Louis World’s Fair under the title, “The German Worker Insurance as a Social Instrumentality.” When conservatives depreciated it as a “social-political carnival,” German officials pointed out that their pioneering effort had . won not only worldwide attention, but also widespread imitation. They claimed that “imitation would doubtless have been even more widespread had not initiatives in various states been retarded by prevailing social political ideas—and, as in Switzerland, France and England, by far-reaching concessions to the attitudes of the voting masses. What this illustrates are the advantages of the monarchical government in Germany, which provides the strength for the resolute implementation of necessary social reforms despite the opposing powers of political shortsightedness, heartless insensitivity, sluggish routine or economic recklessness.”²

Empirical analyses pertaining to the diffusion or imitation of the German model will be presented below, particularly in Chapters 2 and 4. Our concern here, however, is to identify divergences and convergences between the growth of social security institutions and their recognition in political vocabulary and symbolism. For this purpose we will contrast developments in Germany—the institutional innovator—with those in Britain, the country from which the term welfare state came to be diffused around the world in the 1940s. One can see how overseas recipients who did import terms like “kindergarten” might boggle at adopting Wilhelmine concepts like “social monarchy” or other terms that draped citizen entitlements with hierarchical condescension. But why was the term, which has come to be generalized, coined in Britain, and why in the 1940s?

A good scout to follow in this quest is Winston Churchill, who in 1906 entered the Liberal cabinet to help prepare the initial British social insurance laws. In those years he was telling the voters that, “In Germany they have a very much wider national system of safeguards, of bulwarks against accidents and against all the dangers and all the chances of those who are engaged in industry. . . .” We find Churchill the wordsmith avoiding bureaucratic terminology, and attempting to coin political phrases which will catch on. One term that recurs is that of the need for “averaging machinery”; another is that of “the left out millions” who are “miserable,” even as the fortunate in Britain are “more happy than any other equally numerous class have been in the whole history of the world.” Assisted by experts like William Beveridge, Churchill and Lloyd George prepared the Liberal government’s National Insurance Act. By the time of its passage in 1911, Churchill was talking of “bringing in the magic of averages to the aid of the millions.”³

It was to be another thirty years until the insurance metaphors were replaced by the “welfare state” metaphor. Again the stimulus came from Germany, but this time the causal chain followed a more complex dialectic. The Germans had pioneered again in 1919 by anchoring social rights in the Weimar Constitution. But their experiences in the 1920s did not invite replication elsewhere. In 1930 deep divisions over the magnitude of unemployment and other benefits led directly to the fall of the last democratic government based on a parliamentary majority. In Britain the unions also failed to prevent cutbacks in unemployment insurance. But then they helped depose Ramsay MacDonald and salvaged the Labour party, whereas the German unions sought to avoid repression by adopting a lower political profile. They were unable to counterattack when Chancellor von Papen prepared the ideological transition to fascism by sharply attacking the Weimar Republic “Wohlfahrtstaat” in June 1932.⁴ He accused his predecessors of inducing the “moral exhaustion” of the German people by “creating a kind of welfare state” that burdened the state with tasks which were beyond its capability.⁵ When they took power the next year, the Nazis cleaned out the union-supported sickness funds even before they dissolved the unions themselves. Then they reduced unemployment problems by initiating an armaments drive.

Public usage of the “welfare state” term in Britain began in 1941, during a period when Britain was holding out virtually alone against threats from the German war machine. While Churchill was heading the wartime coalition government, a clergyman, Archbishop Temple, coined the phrase in an attempt to characterize a polar contrast to the “power” and “warfare” state of the Nazis.⁶ Thus launched to sustain morale and discipline during a period of wartime crisis, the term subsequently came to be more closely associated with the social benefits that democratic governments hoped to offer once the war was over. It was after the publication of the Beveridge Report in 1942 that the term became increasingly linked to the kinds of definitions employed in this book. This linkage was to the liking of neither Churchill nor Beveridge, who had gone different ways since their collaboration in the period from 1908 to 1911.

World War II reinforced these differences, “for it confirmed Churchill in his fundamental commitment to traditional values, whereas it induced in Beveridge an almost extra-sensory consciousness of revolutionary change.” Accepting advice to give his report a Messianic tone, Beveridge aimed his proposals at promoting solidarity and “bringing institutions and individuals into partnership with the state, in a common condemnation of ‘the scandal of physical want.’” In lecture tours he promoted his plan as a practical embodiment of the Atlantic Charter’s guarantees of freedom from want, but Churchill and other ministers refused to commit themselves to its implementation. Later, as a Liberal member of the House of Lords, Beveridge was embarrassed by his reputation as “chief architect of the welfare state in the English-speaking world.” He disliked the phrase and never used it because of what he called its “Santa Claus” and “brave new world” connotations, preferring the term “social service state.”⁷

Britain in the 1940s and 1950s was exceptional in the history of European welfare state development in that intellectual conceptions formulated primarily by academic social scientists had an important impact on the development of social policy institutions. Especially important were the contributions of T. H. Marshall and Richard Titmuss, both affiliated with the London School of Economics and Political Science, of which Beveridge had been director in the interwar period. In his famous lecture on “Citizenship and Social Class,” Marshall argued that political development in Britain had induced the realization of increments of citizenship rights, with civil rights becoming universalized in the eighteenth century, political rights in the nineteenth, and social rights in the twentieth.⁸

Marshall also elucidated why the convergence between institutional development and conceptual change occurred in that particular decade. He argued that in certain periods in the history of a society an exceptionally strong consensus may develop with regard to “key points” of the social system—a consensus favoring the growth of collective self-awareness. For Marshall, the 1940s in Britain were such a period, and the term “welfare state” took shape also as the antithesis to the old poor law situations in which “welfare” recipients, the paupers, lost their personal freedom and their right to vote because social dependency implied the sacrifice of citizenship rights.

For Marshall, the growth of the new consensus was explained by the coincidence of repudiation of a discredited past, with a specific historical constellation containing two interrelated elements. Firstly, the war created a national solidarity that formed the foundation for new institutions—and at the same time was strengthened by it. Secondly, the social reforms were carried out in a time of economic austerity, when public regulation of consumption and control of markets was commonplace and when society felt committed to “fair shares” in redistributing real income. “It [the welfare state] was born at a time when the sense of national solidarity created by the war coincided with the enforced restraints on consumption and the régime of sharing imposed by post-war scarcity. ... the Welfare State reigned unchallenged while linked with the Austerity Society and was attacked from all sides as soon as it became associated with the Affluent Society.”⁹

Janowitz acknowledges that British social historians “have produced a richer and more interpretative analysis of the expansion of the welfare state than have American specialists.”¹⁰ Indeed, the detailed and sensitive studies produced by British writers about their own society may be unmatched in quality in other European countries as well. But many readers familiar with this rich literature can agree with an Indian critic who has noted that

English analyses, in spite of their descriptive richness, are in a curious sense, “culture-bound.” In emphasizing the unique British historical development in the matrix of which the British welfare state was born, they help us little in understanding developments in the direction of welfare states elsewhere. Most of the definitions of the welfare state are heavily overlaid with facts and circumstances peculiar to British historical development.¹¹

Indeed, it would appear that the conceptual and ideological problems encountered by this generation of British social historians and analysts in critically probing their own society may have limited the energy they devoted to comparative studies. The fruits of such efforts are a small number of incisive essays, several of them devoted to particular subaspects of welfare state development.¹² Representative of the way in which the British scholars circumscribed their efforts may be the fact that Richard Titmuss’ only large-scale attempt at cross-national institutional analysis was his brilliant study of the operation and financing of blood banks.¹³

The assumptions and methodologies of contributors to this volume are in contrast with some of the tentative conclusions articulated on the basis of this British corpus of analysis. Thus we deviate from Marshall’s Britain-centered conceptualization when he wrote that “perhaps we should conclude that France and Germany pressed on into the Affluent Society without ever pausing to establish a Welfare State.”¹⁴ Also we lay the basis for questioning assertions, like that by Janowitz, that “British experience can be taken as the prototype of welfare institutions under parliamentary governance.”¹⁵

Experiences since Marshall wrote have reinforced the impression that intensive study of the British case is not the optimal way of starting to grasp the general characteristics of welfare state development. With regard to many important determinants, the British experience is unrepresentative of Western Europe as a whole. The labor relations and management traditions shaped in the course of its longer antecedent industrialization experience have proved more resistant to change. The tempo with which social security measures were extended between 1909 and 1946 was quicker than in countries like Germany and Sweden, as is shown in Chapter 2. The manner in which social welfare legislation was linked to the rhetoric of a period of wartime crisis was more dramatic and direct than elsewhere. Its ability to restabilize its international political and economic position in the post-1945 period has been more problematic than in the case of any other larger or post-imperial nation. Its economic growth rate has been lowest in Europe. These considerations make it more understandable that the welfare state should have become more vulnerable to attack in Britain than in most other countries.

For those who seek to predict the future, as for those who want to understand better the past, this volume seeks to distill some answers from the cen...