Democracy and the Welfare State

The Two Wests in the Age of Austerity

Alice Kessler-Harris, Maurizio Vaudagna

• Publisher: Columbia University Press
• Year: 2017
• ISBN:
  9780231542654
• Topic: Politics & International Relations
• Subtopic: Democracy
• Index: Politics & International Relations

After World War II, states on both sides of the Atlantic enacted comprehensive social benefits to protect working people and constrain capitalism. A widely shared consensus specifically linked social welfare to democratic citizenship, upholding greater equality as the glue that held nations together. Though the "two Wests," Europe and the United States, differ in crucial respects, they share a common history of social rights, democratic participation, and welfare capitalism. But in a new age of global inequality, welfare-state retrenchment, and economic austerity, can capitalism and democracy still coexist?

In this book, leading historians and social scientists rethink the history of social democracy and the welfare state in the United States and Europe in light of the global transformations of the economic order. Separately and together, they ask how changes in the distribution of wealth reshape the meaning of citizenship in a post-welfare-state era. They explore how the harsh effects of austerity and inequality influence democratic participation. In individual essays as well as interviews with Ira Katznelson and Frances Fox Piven, contributors from both sides of the Atlantic explore the fortunes of the welfare state. They discuss distinct national and international settings, speaking to both local particularities and transnational and transatlantic exchanges. Covering a range of topics—the lives of migrant workers, gender and the family in the design of welfare policies, the fate of the European Union, and the prospects of social movements— Democracy and the Welfare State is essential reading on what remains of twentieth-century social democracy amid the onslaught of neoliberalism and right-wing populism and where this legacy may yet lead us.

PART I

Democracy and the Welfare State in Europe and the United States

Challenges to the welfare state have increased dramatically in the new millennium. Originally designed to promote economic security and political harmony in a world where capitalism had run rampant, early welfare states relied on widespread public support to maintain a balance between social fairness and the profit drive. But the apparent success of capitalism against the communist world and the increasing focus on austerity in the wake of globalization and financial crises have led to calls for greater market autonomy and less state intervention. In an age of retrenchment, democracy and social justice command less interest.

Europe and the United States illustrate the retreat from democracy. Maurizio Ferrera focuses on the post-1970s conflict between the European Union and the welfare state, wondering whether reconciliation is possible, and in what terms. His conclusion sounds an optimistic note on the possibility of a reformed “neowelfarism” engendered by a new, committed European leadership that may reconcile people with the old dream of the European Union. In turn, Ira Katznelson has illustrated in historical and contemporary terms the participatory potential of postwelfare America. In our heterogeneous societies, he argues, democratic activation is engaged not by pretending to erase differences but thanks to the shared confidence in common rules of the game, rules that give each opinion a chance.

These cautiously optimistic forecasts have come into question in light of political events in 2016. These include the challenges of ever-increasing refugee populations, Britain’s vote to exit the European Union, and the rise of a populist right in the United States. We may now want to ask if the efforts of almost every welfare state to acknowledge the claims to inclusion of diverse marginalized groups—an effort that seemed so successful in the late twentieth century—may not have come at the cost of the welfare state itself.

CHAPTER TWO

Reconciling European Integration and the National Welfare State

A Neo-Weberian Perspective

MAURIZIO FERRERA

The national welfare state and the European Union are two precious legacies of the twentieth century. However, their coexistence is fraught by unresolved tensions, even a potential clash, which the recent crisis has markedly exacerbated. When, how, and why did the original “elective affinity” between the national welfare state and the EU begin to weaken? Is “reconciliation” possible? If so, how? These questions lie at the center of current academic and public debates. The aim of this chapter is to cast new light on these questions by drawing on Weber’s theory, in particular his insights about the relationship connecting values, ideas, and politics. The chapter is organized as follows: the first section presents the topic and summarizes the debate. The second and third sections will illustrate the intellectual and political logics that have guided the development of the welfare state at the national level. They will then discuss the process of supranational economic integration, highlighting the responsibility of these intellectual and political logics in generating the clash. The fourth section will offer a reinterpretation of the current crisis in neo-Weberian terms and will hint at some possible scenarios.

WELFARE AND INTEGRATION: THE ROOTS OF “DECONCILIATION”

As has been shown in a wealth of historical, legal, and political studies, tensions between the national welfare state and European integration have been intensifying since the 1970s. An increasingly stronger “economic space” has come partly to encapsulate national welfare institutions, imposing exogenous constraints on their functioning, including the processes by which they internally adapt to changing social needs and demography. National governments are still largely free to determine the internal structure of social programs and spending, but through the principle of free movement, competition rules, and the rules of coordination of national social-security systems, the EU has raised two basic challenges to the national welfare state. The first is a challenge to the national welfare state’s territorial boundaries, through the explicit prohibition of most cross-border restrictions regarding access to and consumption of social benefits and, to some extent, the provision of services. Within the EU, those who cross national borders share domestic spaces and carry at least some core social rights (such as pensions) across the territory of the whole EU. The second challenge has addressed the “right to bound,” that is, the right of each national welfare state to determine autonomously who can or must share what with whom and then to enforce compliance through specific organizational structures backed by coercive power, like, for example, setting up a compulsory public-insurance scheme for a given occupational category.

Since the mid-1990s, the literature discussed the destabilizing consequences for domestic social protection of economic integration and its delicate readaptation efforts, necessitating the notion of “semisovereign” welfare states.1 Two strands of the debate demand special attention. The first concerns legal frameworks and decision-making rules, suggesting that the tension is essentially a contest between “market-making” and “market-correcting” logics. Market-making provisions can be adopted by striking down domestic barriers through simple regulations or court rulings that do not require complex bargaining processes (“negative integration”). Market-correcting measures require instead the formation of political majorities within the Council and the support of the Commission. In other words, decision rules make “positive integration” much more demanding—and thus less successful—than negative integration.2 A second and more recent strand of this debate has tried to bring the process of European integration under the umbrella of the classic “state-building” school, aimed at analyzing the historical formation of nation-states.3 According to this perspective, EU integration is a new phase in the long-term development of the European state system, characterized by a gradual weakening of spatial boundaries and an overall restructuring of sociopolitical and institutional configurations. The welfare state was, and still is, a key component of the nation-state. But, to reiterate, by imposing increasing challenges to its institutional foundations, integration has brought about a “sovereignty contest” over the bounding rules that govern social sharing practices.

The post-2007 crisis has exacerbated existing tensions and created new ones. The clash between nation-based social-protection needs and Economic and Monetary Union (EMU)–induced austerity and spending cuts has rapidly escalated and entered the electoral arena, where it is generating a new, turbulent cleavage between pro- and anti-EU actor coalitions.4 The crisis has also revealed a more or less latent distributive cleavage between richer “paying” member states and poorer “receiving” member states. The problem of a “Transfer Union” has gained increasing political salience5—even if only as a matter of financial aid to countries under fiscal stress, without any consideration of the web of “invisible” gains and losses linked to the EMU. The general strain between solidarity and economic integration has broken down into four distinct tensions: (1) market making versus market correcting at the EU level, (2) national social sovereignty and discretion versus EU law and conditionality, (3) intra-EU “system competition” between high-wage/high-welfare member states and low-wage/low-welfare member states (“old versus new” member states or “West versus East”), and (4) payers versus beneficiaries of cross-national transfers and financial assistance (“core versus peripheral” member states or “North versus South”).

These four lines of tension intersect, creating complex policy dilemmas, political turbulence, and a further erosion of popular legitimacy for the EU. While the scholarly literature largely agrees on the nature and intensity of the current predicament, prognoses tend to diverge. At one extreme we find a position of dead-end pessimism: tensions and conflicts cannot be solved at the EU level, and thus the only solution is to “bust” the status quo (including the euro), repatriate competences, and fence off supranational intrusions from domestic arrangements and policy agendas.6 At the other extreme, we find the federalist position: the EU should swiftly turn into a fully-fledged federal superstate equipped with an adequate central budget and with the powers to tax and approve social spending.7 In the middle we find a variety of “realist” positions, including “supranational incrementalism,”8 where a reconciliation between Europe’s economy and European society would prove difficult but not impossible. To some extent, the process has been underway for some time. A recognizable “social space” has been emerging within the EU architecture, especially since the treaty revisions of Amsterdam and Lisbon and the launch of employment and social “processes” based on Open Method of Coordination (OMC). As emblematic examples we can mention the Charter on Fundamental Rights; common labor and social-security standards; soft laws on employment, social inclusion, and pensions, as well as on health care and long-term care; and, more recently, the so-called social provisions of the Lisbon Treaty and the social targets of the Europe 2020 strategy.9

Although rich and insightful, the scholarly debate on “Social Europe” has two weak points: specifically, its poor conceptualization of both the political and the intellectual logics that underpin institutional and policy developments. By “political dimension,” I mean the sphere where at various levels elected leaders and state officials make choices regarding both welfare-state building and EU building. This understanding of politics combines different types of rationalities: epistemic-instrumental (“puzzling” for problem solving), consensus seeking (“powering” through the democratic process), and axiological (“valuing,” i.e., opting for a specific cause to serve, some ultimate objective that gives “meaning” to political change and persuades those affected by such change). Likewise, by “intellectual dimension,” I mean the sphere where ideas and broad normative symbolic visions are generated, justified, and weighted against their ends, instrumental implications, and substantive consequences. These two dimensions—political and intellectual—are practically intertwined but should be kept analytically distinct in order to sort out their intrinsic logics and their causal significance.

The loose articulation of these two dimensions is especially lamentable for the “supranational incrementalist” approach, which has ambitions both to explain the tension between the national welfare state and European integration while also maintaining normative commitments to institutional reconciliation. During the 2000s, incrementalist scholars tended to suggest that the social space was the outcome of some form of gradual, evolutionary adaptation essentially linked to problem pressures. From this point of view, the post-2007 crisis appears as the effect of a powerful exogenous shock, but the implicit expectation is that sooner or later an institutional “bounce” is going to take place. This perspective is not adequate to explain the logic of how these changes occur, since it remains ultimately anchored to quasi-functionalist assumptions at the macro level as well as to theories of reactive policy learning and “political voluntarism” at the micro level. How can we enhance the theoretical understanding of institutional frictions, the margins of maneuver that are available to purposive political actors, their strategies of response, and thus dynamics of persistence versus change?

Often, “grand thinking” requires that we stand on the shoulders of great thinkers. I suggest we take a step back and revisit the theory of Max Weber. Why Weber? Because his legacy (as further developed by neo-Weberian theory) is precious and salient for capturing the role of both the intellectual and political spheres in the processes of institution building and change. Weber’s thought is especially useful for this task by virtue of his general theory of “value spheres” as well as his analysis of the nexus between “(social) science” and “(democratic) politics.” The general theory of “value spheres” casts light on the way in which ideas, values, and power typically interact in molding the strategies of political leaders, allowing under certain conditions for creative change. Which, incidentally, is exactly what is needed in the EU today.

THE WELFARE STATE AND EUROPEAN INTEGRATION AS AN INTELLECTUAL PROJECT

For Weber, the emergence and consolidation of a number of new life orders, or value spheres, was a prominent feature of European modernity. These orders slowly gained independence from religion and began to operate according to an autonomous inner logic (Eigengesetzlichkeit). Weber listed these spheres as the economic, political, intellectual, erotic, and aesthetic.10 “Ideal interests in particular characterize the intellectual sphere,” that is, by the search for rationalized meanings, interpretations, and explanations of the natural and social world (which thus became increasingly “disenchanted”), through the exercise of theoretical reason. Weber did not use the concept of ideology in any systematic sense. Recent Weberian theory, however, has suggested that the grand twentieth-century ideologies (socialism, liberalism, and Christian democracy) have affirmed themselves as secular “theodicies”:11 like religion, they have provided symbolic visions of “salvation” (though they are “this-worldly” rather than “other-worldly”), or, in other words, they have provided rationalized justifications of the problems of “suffering” and “injustice” as well as prescriptive agendas on how to combat them through practical action.12

Although value spheres are sometimes treated in quasi-ontological terms, they ultimately exist in individual agents. Thus intellectuals are typically producers of ideas for the sake of ideas—whether they serve as scientists, philosophers, or ideologues. As long as the meanings of their actions remain “ideational” rather than linked to material interests, however, intellectuals can specify their mission along a continuum between pure epistemic devotion and socially engaged thinking. But in recent years, Weberian theory has elaborated a more neutral and articulated sociology of intellectuals, one centered not only on the contrast betwee...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Contents
• Acknowledgments
• Introduction: The Uneasy Promise of the Welfare State
• One: Historians Interpret the Welfare State, 1975–1995
• Part I: Democracy and the Welfare State in Europe and the United States
• Part II: Varieties of Retrenchment
• Part III: Gender, the Family, and Social Provision
• Part IV: Possibilities of Resistance
• Selected Bibliography
• Contributors
• Index