Samenvatting PDF

### Samenvatting **What is risk** Risk: The probability of a [dangerous] event... multiplied by the amount of expected [damage] connected this event. **Social risks** Social risks: A lack of basic security = insecure circumstances + vulnerability to harm Risk: something undesirable can happen...

### Samenvatting **What is risk** Risk: The probability of a [dangerous] event... multiplied by the amount of expected [damage] connected this event. **Social risks** Social risks: A lack of basic security = insecure circumstances + vulnerability to harm Risk: something undesirable can happen Vulnerability: lack of recourses to protect oneself from harm when something undesirable happens - High risk, low vulnerability (Elon Musk) - Low risk, high vulnerability (single mother sick) [Socioeconomic circumstances] associated with a [significant loss of income] and an [increased poverty risk] - Examples: Unemployment; sickness; (occupational) disability, old age... **Why *social*?** - Risk = because of [individual] failure/choice - Social risk = risk produces by the [system] - requires collective response Social risks are building blocks of the welfare state. The welfare state is a system of social risk management. **Before industrial capitalism** Before industrial capitalism there were many risks. States but no welfare states. Welfare was provided by families and communities, informal security regime. It was the responsibility of the individual. The state didn't have to interfere to solve the risks. Poor relief was very conditional- do I like you, are you deserving? **Industrial capitalism: the emergence (opkomst) of life-course risks** People work in a collective in fabrics with machines instead of man/ animal power. People start working for a boss and get a wage. Everyone moves to the city which creates slums. - Commodification of labor, mass migration, concentration of urban poverty, slum dwelling, low wages The informal welfare collapses. Elites realize that the mass poverty is not individual failure but instead is produced by a system (socially produced). - Poverty of wage-earners is related to family cycle =\> life-course risks Wages are too low, and a new class of industrial workers begin friendly societies (private self-help and unions) **From Informal to formal security regime** The government works together with unions and employers to create social insurance programs. WELFARE CAPITALISM =\> synergy between social policy and economic growth. (A system where social policies and economic growth support and strengthen each other.) First regulation, centralization and subsidization of 'friendly societies. Social insurance programs for 'male breadwinners. WWl: disability and old-age insurance. WWll: all nation state citizens-\> universalism. Welfare: you chip in and when you are in need you get some benefits. You pay when you work and get money when you're retired for example. So it is a social insurance **Beveridge** During WII investigates poverty and wants to wipe poverty out. The main causes of poverty are because you cannot make a living. People shift from periods of earning and periods of not earning (*social insurance*). And periods of having many mouths to feed and having none to feed (*family allowances*). So why don't people put money in a social money bank and then when they need it, they can get support. This is horizontal redistribution. Poverty could be abolished by redistribution **within** the working classes" - 'Horizontal redistribution' over the life course piggy bank function of the welfare state via taxes **Five 'giants' that threatened well-being five pillars of welfare**  Idleness: werkeloosheid, squalor: vuiligheid (living in squalor, leven in ellende/vuil) **Underlying social contract:** Everyone contributes at some point and benefits at another. All welfare states systems of horizontal redistribution (taxes and contributions). Handeling free-riders by making it mandatory by law. Provide basic financial help only to those who really need it, and check (means tested) to make sure people follow the rules/control. **Types of risks** **Life-course risks** Unequal distribution of risks across the life-course - Trajectories &transitions (education, employement, parenthood) - Welfare state structures life: youth (education), mid-life (work), old (retirement) **Class risks** Unequal distribution of risks across [social classes] (occupational groups). Risks are structural inequalities tied to socioeconomic status/ class position (injury: miner vs. professor, stable job: low & high education) Unequal coverage of class risks across welfare systems The welfare state (horizontal distribution), depending on how it is designed, amplifies this. - Residual, corporativist, universalistic **Intergenerational risks** Transmission of social risks due to inheritance. So the (dis)advantages that are passed down from one generation to the next. Example: housing and education. It creates cycles of poverty and inequality - Social mobility - Achievement and [ascription] **Old and new risks**  Seminar 1 **What is welfare?** Welfare is about more than just material wealth - The [basic] [needs]: Having enough [food], [shelter], and other essentials. - Realizing [life chances]: Living a life of [autonomy] and reaching your full capabilities. - Social participation: Engage in society without feeling shame or exclusion. When Welfare is Missing: - People face [social risks], like poverty, hardship, and extreme inequality. - These situations prevent a good quality of life and can harm communities. What is welfare: Welfare is the highest possible access to economic resources, a high level of well-being, including the happiness of the citizens, a guaranteed minimum income to avoid living in poverty, and, finally, having the capabilities to ensure the individual a good life **How is welfare measured?** - Market Indicators: economic measures, like [GDP] per capital (average income) - [Social Indicators]: How well people are integrated and connected in society, such as: - [Social inclusion]: Whether people feel they are part of society. - [Social cohesion]: How well people get along with one another, both in objective ways (e.g., equality) and subjective ways (e.g., personal feelings of belonging). **Provision (bepaling) of Welfare:** Welfare is provided by both private and public organizations: 1. [Markets (labour markets):] People can sell their skills or \"capabilities\" to earn money. This is an economic exchange (work and get paid). - Market Failure: Sometimes, markets don\'t work well, leading to people needing welfare. For example, if there aren\'t enough jobs or if some people can\'t work, they might need financial help. 2. [Civil Society:] In addition to governments, welfare can come from the family, charities, or non-governmental organizations (NGOs). These groups help support people in need. - Solidarity in Social Groups 1. Guilds (like worker organizations in medieval times) 2. Friendly/mutual societies (groups of workers who helped each other during industrial times) 3. [Welfare States]: Governments also provide welfare, aiming to balance the needs of workers (labour) and employers (capital). After World War II, many countries grew their economies and set up welfare systems (this was the time from 1945-1975). - Moral and Political Questions: Who should get welfare, how much, and why? **Welfare state:** - Country\'s system for protecting people\'s income, especially in situations like old age or unemployment. - It includes other services like health care, education, and housing. A welfare state is a country where the government uses its power to: 1. Guarantee a minimum income 2. Reduce insecurity, like sickness 3. Ensure all citizens have access to the best standards available social services **Welfare is divided using different redistributive principles**\ [Horizontal vs. Vertical redistribution] - Within groups with similar income/circumstances vs. across groups with different [Equivalence principle vs. Solidarity principle] - [Equivalence Principle]: People should get welfare based on what they contribute or what risks they face. - [Solidarity Principle:] People help each other out, even if they don't contribute the same amount, to ensure everyone is supported. The amount of help you get is usually related to what you've put in. People might receive help even if they haven\'t paid the same amount or faced the same risks. There is a proportional relation and it is loosend solidarity [Need] - Means-tested (checking income), good conduct (following rules) - Example: social assistance [Equity] - Those who contribute more should receive more - Example: earnings-based pension [Equality] - Every citizen is entitled to the same type and degree of welfare - Universal - Flat-rate transfers (everyone gets the same amount), NHS (UK) (free healthcare for everyone), AOW (NL) (basic income for all), and the education system (free education for all children) Blueprint  **Welfare state variation: 3 regimes** Variations in: The extent of [de-commodification] through social rights - How much social rights allow people to live without depending on the market. The kind of [stratification] system promoted by social policies - How social policies create differences between different groups of people. - For example, do all people receive the same pension. Some systems provide equal benefits (like a basic pension), while others give differentiated benefits depending on work history. Variation in ['key delivery mechanisms':] Relative importance of market, family and welfare state in welfare provision Not how much you spend but how you spend ### **Liberal regime**: low level of protection - ### The Market; The individual, low decommodification (private insurance), poverty protection - ### Need, Means-tested, assistance, basic safety net, little redistribution - ### High poverty, high inequality, dualism ### **Conservative Corporatist regime**: medium level of protection (high if work) - ### The State, The Family; each occupational group its own, the male breadwinner - ### Equity, contribution-based, insurance, high income protection but little redistribution - ### Class stratification ### **Social democratic regime**: high level of protection (for all) - ### The State, The individual; activation and social investment - ### Equality, universal, high-basic level; high level of redistribution - ### Little poverty, little inequality, inclusivity Liberal/ residual Conservative- corporatist Social-democratic ------------------------- ------------------- ------------------------------------- ------------------- Life-course risks ++ \+ 0 Class risks \+ ++ (protection based on occupation) 0 Intergenerational risks \+ ++ 0 Lecture 2 Globalization **What is globalization:** A [transplanetary] process or set of processes involving increased [liquidity] and the growing multidirectional [flows] of people, objects, places and information as well as the [structures] they encounter and create that are [barriers] to, or u, those flows. Examples: social media is a booster, EU free borders is a booster. Movement of capital, barring immigrants and making deals. But at the same time, it is separated from the rest of the world. Globalization started after WWII. From then on it is qualitatively different compared to previous times: extensive, intensive, velocity, impact is higher e.g. ukrain war and gas prices, the evergreen stuck in the sues canal, covid from a bat in China. **Processes of globalization** [Economic] globalization= globalization- something is made in China and sold in America [Political] globalization- a reaction to globalization. Enabling or restricting flows by (de)regulation, global and regional structures and organizations (EU, IMF) - Mostly facilitate, but also resistance -- barriers, recently: - Donald Trump and his protectionist reflexes... =\> new barriers, reduced integration - Brexit, Russian invasion of Ukraine, EU tariffs on Chinese electric cars [Cultural] globalization- religion, education and science, sports, health & medicine (Netflix, Spotify) **Measuring globalization** **KOF-globalization index:** - [De *facto*] globalization: an [actual] measure of something real- actual flows and activities. (What really is occurring such as trade, people movement and investments, so what is really happening in the world right now) - [De *jure*] globalization: variables that represent institutions, policies and\ conditions that enable or restrict flows and activities. Things that enable or restrict flows -- trade tariff of the EU. Laws, rules and agreements. The rules and laws that influence how countries interact with each other. - New: trade and financial globalization **Index criticism:** - It is aimed at measuring aspects of the western world. The cultural goods were first only measured by Ikea and McDonalds. Now by some cultural goods but still aimed at the western world. - Small villages - The unit of analysis puts a number on a country but there is huge variation within a country as well. But the globalization might be driven by certain cities like New York or San Francisco. Other villages may not be globalized - How it is measured gives an advantage to small western European countries. Which could be logical because they are dependent on trade with other countries. **Development of (economic) globalization** The financial crisis reduced the speed of which the world globalized. It caused countries to make inward policies. 1990- the end of the cold war- a barrier for globalization (eastern berlin) is taken away. The BRICS countries are outgrowing the G7- there is a rebalance going on. You can see three waves of globalization 1960- early 1970- oil crisis Early 1970- 1987- world is stable and it grows until 1987- **A Previous epoch of globalization and its fall** 1896-1914: emergence (opkomst) of global capitalist system: - Technological advancements (railroad; steamship, telegraph) (These innovations allowed people to connect) - Law of comparative advantage (nations should specialize in what they do best. When they specialize, they can innovate and specialize and take advantage) - Free trade & elimination of trade barriers =\> large-scale unregulated flows of capital - Competition between countries through manipulation of currency values, tariffs,...: 'race to the bottom' (countries tend to outsmart each other) WWI -- Great Depression -- WWII Negative effects on (almost) all major economies In Europe: war and rebuilding (Nazi-Germany; Fascist Italy: self-sufficiency). US: the stock market crash to Great Depression (protectionist reflex). And the consequence of this crises; the world became much more closed instead of open. After WWll Fear of new 'Depression'; blame on protectionism and lack of cooperation. Solution: **[Bretton Woods System WAVE 1: REGULATION]** Rules safeguarding financial stability, fair cooperation and trust between nation states for economic growth - By gold-standard, fixed exchange rates, establishment IMF and Worldbank, trade agreements. Expansion of welfare state: safety net to help citizens 'deal' with problems of capitalism Integration of global economy, e.g. emergence of Multi-National Corporations. Investing in other countries rise in globalization *The Bretton Woods System was after WWII to promote international economic stability and cooperation, preventing the protectionist policies that contributed to the Great Depression. Key features included a gold-backed dollar, fixed exchange rates, and the creation of the IMF and World Bank. Countries expanded their welfare states to support citizens, leading to economic stability. This system facilitated the rise of multinational corporations and globalization, integrating economies and increasing international trade and investment.* **Profit Squeeze and the role of oil since the 1970s WAVE 2: DEREGULATION** Oil crisis and the consequences was oil production cut, shortage, so the price increased Solution = deregulation Searching to reduce cost of (industrial) labour =\> export of industrial (low-skilled) work to low-wage countries ([off-shore outsourcing]), transition to high-skilled 'post-industrial service-economy' in the West = global division of labour Economic deregulation makes import of off-shore goods possible End of Bretton Woods And Trade openness enables countries to exploit comparative advantages = gain from specialization, more efficient production Rise in globalization **Profit-squeezes since 1990s:** **WAVE 3: DEREGULATION** Increased living standards in industrializing countries: Improvements in education in global south: technological advancement, (offshore) outsourcing & export out of the West of non-industrial and more skilled jobs (e.g. call centers, copy-editing, etc., also because of ICT-revolution). Production for own consumers. Increased global competition for commodities (oil, steel, gas,..., corn, wheat, soy) Solution: From economic to financial deregulation; increase competition and efficiency by deregulating capital flows Loosen capital controls and economic growth by offering cheap credits to people rise in globalization 3 waves: Wave 1: regulation Wave 2: (trade) regulation Wave 3: (financial) deregulation **How globalization affects welfare states** In theory, expansion or no effects of welfare state, however it is mixed. All theories get some confirmation by some indicators and impact of globalization is outweighed by some factors as aging population, right wing. So it is complex. Welfare state expands because globalization brings a lot of risks. And people will vote for political parties that are for the welfare state Convergence- countries that are poor will have a growing welfare state while western countries will have a reducing welfare state Lecture 3 **Washington consensus**: [free, unrestricted markets] are important for [economic growth]. Promotes [neoliberalism] that emphasizes free markets, privatization, and minimizing state intervention. Favoring [privatization of industry], [deregulation], and [less government intervention]. Investing in [specializing] in which is efficient for the country (law of comparative advantage). Often tied to **trickle-down theory**: [wealth from the wealthy] will benefit everyone. Top to bottom. when the wealthy and businesses get [tax cuts] or financial benefits, they will [invest more] in the economy. This investment is expected to [create jobs] and help everyone else, as the benefits \"trickle down\" to lower-income people.  Globalization has reduced extreme poverty but led to [wider gaps] in wealth both [within and across] nations. It is also about [how its distributed]. Trickle-down theory doesn't work. [High inequality slows down economic growth]. So, support poor and middle class instead via redistribution and taxing. **Divergence theory** [Instead of becoming more similar, rich and poor countries may grow further apart over time.] As some countries develop and become wealthier, they can create [advantages] like better technology, education, and infrastructure, which helps them continue to grow even faster. Meanwhile, poorer countries may [struggle] with issues like political instability, lack of resources, or poor governance, preventing them from catching up. In simple terms, divergence theory is that [economic inequality can increase between nations, leading to a wider gap between the rich and the poor.] **The Kuznets Curve (1955)** Inverted U-shape The relationship between economic growth and income inequality. As a country develops, [income inequality increases because the benefits of growth often favor a small group]. However, over time, as the economy matures and becomes [more industrialized, inequality tends to decrease, leading to a more even distribution of wealth]. This creates a U-shaped curve on a graph, indicating that while [inequality may rise in the early stages of growth, it usually falls in the later stages]. **Convergence theory** As countries develop economically, they will become [more similar] in terms of income levels and living standards. It suggests that [poorer countries will catch up] to wealthier countries over time because they can [adopt existing technologies and practices], which allows them to grow faster. Essentially, the theory argues that [differences in economic performance will decrease] as countries become more [interconnected through trade, investment, and globalization]. In simple terms, it means that over time, rich and poor countries will become more alike in terms of wealth and quality of life. **Four traps theory** (within country factors) Some countries struggle to escape poverty despite having potential for growth. 4 main traps that can keep a country poor: 1\. Conflict Trap: Countries affected by civil wars or violence often find it hard to develop because instability disrupts economic activities. 2\. Natural Resource Trap: Countries rich in natural resources might rely too heavily on them, leading to poor economic management and corruption, which can prevent broader development. 3\. Landlocked Trap: Countries without access to the sea can face challenges in trade, making it harder to grow their economies. 4\. Bad Governance Trap: Poor leadership and corruption can hinder economic progress, as resources may not be used effectively for the benefit of the population. **World systems theory** Afbeelding met tekst, logo, grafische vormgeving, Graphics Automatisch gegenereerde beschrijving How the global economy is structured and how countries interact within it. Dividing the world into 3 main categories: 1. **Core** Countries: These are wealthy, developed nations that dominate global trade and have strong economies. 2. **Semi-Periphery** Countries: These are nations that are in between; they are developing but still have some influence and economic power. 3. **Periphery** Countries: These are poorer, less developed countries that rely heavily on exporting raw materials and are often exploited by the core countries. This system creates inequalities and keeps poorer countries dependent on wealthier ones, making it difficult for them to develop. **Globalization and economic growth: evidence** - Potrafke: review studies using KOF index - Globalization has a positive impact on economic growth, humans and women's rights - Does not lead to a reduction in welfare state activities, but there is an increase in inequality within countries - Gygli: new KOF index - All dimensions of globalization boost economic growth - Different effects for de jure and facto - De jure globalization (policies and regulations): Economic and political dimensions have strong effects on growth. - De facto globalization. Social globalization plays a key role in driving economic growth - Non-OECD countries benefit most **Extreme poverty** There is an incline in absolute poverty due to globalization, but 8% still lives in poverty (earlier 38%). Extreme poverty is still high in sub-Saharan Africa and there is an increase in the middle east and north Africa. However, there south Asia is decreasing very fast.  **Measuring inequality** - **Gini-coefficient** - From least to most earning person. From left to right. Diagonal is the line of equality; everyone earns the same. The distribution of income - Mostly calculated within countries Afbeelding met atlas, kaart, tekst Automatisch gegenereerde beschrijving Conclusions - Europe is the most equal - Sub-Saharan Africa and south America, probably corruption and colonialism, highly unequal. - US highly economic developed, however highly inequal **3 concepts of cross-country income inequality** 1.Inequality Focused on [inequality between nations]. Calculated across **[GDPs or mean incomes]** from household surveys of all countries, **[without population weighting].** The height of each person represents the GDP or mean income of his or her country. When we calculate this concept of inequality, we take all [**countries with their mean incomes and calculate the Gini-coefficient**.] China and Luxembourg have the same importance, because we do not take population sizes into account. Every country counts the same.  2.Inequality Individuals from poor countries are all equally short but the difference lies in the fact that countries [population sizes] are now considered. We do the [same as 1, but with population]. However, in both cases the calculation takes into account not the actual incomes of individuals but [country averages]. 3.(global) inequality World as composed of individuals, not nations. this one is [individual based:] each person, regardless of his or her country, enters in the calculation with their [actual income.] Because the calculation of global inequality relies on household surveys, we cannot calculate inequality 3 with much precision for the period before the mid- or late 1980s.  Concept 1: Around 1980 increase in inequality at the beginning of globalization. Rich countries grew on average, faster than poor countries. Concept 2: during the globalization era 2 declined measured by population size. more convergent or more equal Those who desire to emphasize the unevenness of globalization tend to focus on [growing inter-country gaps] without taking into account sizes of population and prefer inequality 1. Those who wish to focus on the positive aspects of globalization tend to favor concept 2 China counts for a lot because of its large population size. And China has grown very quickly. Now, it has support from India. [The high rates of growth of these two countries are the major factor underlying the downward trend of inequality 2]. Concept 3: inequality is higher. In inequality 3 people enter the calculations with their actual incomes, not with country averages. To calculate 'true' global inequality, we must adjust people's incomes with the price levels they face After 2002 there is a drop. The main reason is the fast growth of relatively poor and very populous countries, most notably China and India. Global inequality is substantially greater than inequality in Brazil, a country that is often held as an exemplar of excessive inequality. And it is almost twice as great as inequality in the US. Sweden has a very low index. Brazil is very big and very inequal. **3 phases of global inequality** Before the industrial revolution there was a little development. When the IR kicked in you saw sky rocketing inequality. A story of divergence: the west growing due to colonialism. Phase I: IR -- 1950 - [Divergence. Rising within & between] countries. The west exploiting the south. Phase II: 1950-2000 - [Inequality in its highest. Peaking between, declining within countries.] Why: in the west WOll welfare states start to develop. Education equality Phase III: 2000 -- [Convergence. Declining between, rising within] l mirrors lll The figure shows that the distribution of the world population along the income scale is not even and does not a smooth process. [It is clusters into 3 zones; low middle and high income]. This also attests [the world system theory (core etc.).] And supports the theory that [countries can move across different clusters]. Example, Japan. Most of the world population is in the low-income crest of the distribution. Large portion has moved to the middle crests at the turn of the twenty-first century, [thanks largely to the rapidly growing average income of China], and to a lesser extent India. These findings illustrate that the falling global inequality under globalization is driven by the rise of a massive global middle class, constituted mainly by China and India. **The elephant chart** [2 groups are winners] of globalization; 1[. The very rich], 2[. The middle classes] of the emerging market economies, China, India, Indonesia and Brazil. Showing the change in real income (measured in constant international or PPP dollars) between 1988 en 2008. The top [1 per cent has seen its real income rise by more than 60] per cent over those two decades. [The largest increases were registered around the median: 80 per cent real increase] at the median itself and some 70 per cent around it. It is between the 50th and 60th percentiles of global income distribution that we find some 200 million Chinese, 90 million Indians. The only exception is the poorest 5 per cent of the population, whose real incomes have remained the same. But the biggest losers (other than the very poorest 5 per cent), or at least the 'nonwinners', of globalization were those between the 75th and 90th percentiles of global income distribution, whose real income gains were essentially nil. These people, who may be called a [global upper middle class], include many from former [communist countries and Latin America], as well as those [citizens of rich countries whose incomes stagnated]. Who lost between 1988 and 2008? Mostly people in Africa, some in Latin America and post-communist countries. **Global inequality: components and implications** The height of the bar represents the Theil coefficient of global inequality in two baseline years: 1870 and 2000. The height of the bar is much greater now, meaning that [global inequality today is greater than in 1870.] Global inequality two parts. Class: [differences in incomes within nations,] which means that that part of total inequality is caused by income differences between rich and poor. The sum of income inequalities between different '[income classes'] within countries. The second component, the '[location'], is the [differences between the mean incomes of all the countries in the world]. In technical terms, the first part ('class') is also called '[within inequality']; the second part ('location') is called '[between inequality']. The composition of global inequality is very different, a very large chunk of our [income will be determined by only citizenship]. Back then class determines inequality and the occupation you had. Now, Milanovic, is not what you do, but where you live, determines where decide, its location. 60% is based on your location of birth. **Gaps between country incomes** the poorest will be at x = 1. Consider, for example, the poorest 5 per cent of people in the US. I put them all together, and calculate their average income The poorest Americans are at the 60th percentile of world income distribution. This means that [they have a higher annual income than 60 per cent of the world's population]. As one moves higher up the US income distribution, each richer ventile of Americans will obviously stand even higher in the world income distribution But the key point is that although there are some very rich people in India, their numbers are not statistically significant; the number of people who enjoy the standard of living of the American middle class is still very limited. it makes sense for Indians to migrate. They will become better up in US instead of India. So, [migration is an obvious solution]. This is because the major implication of a world where location matters is that migration can increase a person's income significantly. China's rapid growth has reshaped the global income distribution, but the [change is most around the middle and upper middle of the global rankings (]the part typically full of working-class people in Western countries.)  Urban [Chinese moved up between 24 and 29 global percentiles], meaning that people in [each Chinese urban decile jumped] over one-fourth or more of the world's population in just 30 years.  But the [growing of Chinese earners has resulted in the relative decline of those in other countries]. Between 1988 and 2018, average Italians in the country's bottom decile have seen their global [ranking slide by 20 percentiles].  The second and the third lowest Italian deciles have fallen globally by six and two percentiles. The [global position of the wealthy has barely changed] by the rise of China. But rich Italians, Germans and Americans have remained where they were before: at the top. [Conclusion ] - Extreme poverty sharply declined - Yet regional unevenness & pace of decline is slowing down - Global inequality is declining - Yet largely due to China and India (growth and populous) - Is it a trend or a (small) aberration? Will it continue? And how? Covid; Ukraine war; Trade wars between US/EU & China, Gaza, development of Africa, migration\ At the same time: within country inequality is on the rise\ Is globalization civilizing, destructive or feeble? Seminar 3 GDP growth- economic growth Gini -- income inequality Poverty China won the race to the bottom and succeeded in industrial upgrading. The poverty reduced massively. Under communism everyone was equal, then with economic equality it went down, and now it is going up, because of class differences etc. impressive economic growth, poverty reduction and declining inequality (income) **Stratification**- hierarchy- [the ordering of society into layers]. Slavery, caste system, gender, ethnic class, etc. **Wrights class scheme** The job you do mediates between your income and education. For instance, a nurse studies less than a doctor, so she ends in a different class. [Mobility]: the fact that you can change class in your lifetime ([intra mobility]). Or improve compared to your parents ([inter mobility]). For some societies is for children easier compared to others. For instance, the UK is not mobile compared to the Netherlands. Key dimensions of control & power - Ownership of means of production - Number of employees - Relation to authority - Supervising & being supervised - Skill level of the job - Expert to non-skilled (schooling) [The distinguishment between employers and employee]. He distinguishes employees between equality, and the skill level. For instance, the security would be a non-skilled person, you don't need special skills. Elon Musk on the other hand is a capitalist and would be ranked on the top. Professor; expert or expert supervisor. But a nonskilled person gets regularly a check compared to a skilled person. **Stratification under communism in China** People used to get the same credit/ reward/ wage for very different kinds of work. It wasn't based on skills but [about how good of a communist you were]. Problem: The power of the people high up in the hierarchy could be abused. Pros communism: equality, maximized welfare, reduced stress Cons: no work incentive (people get lazy), total lack of freedom, lack of innovation [Market transition in China: Consequences for stratification] ***Market transition theory*** (Victor Nee) = decline in relevance political power Economic success: Economic stimulants \> political loyalty Achievement based: Human capital \> political capital - Talent, competence, capacities, skills, entrepreneurial mindset Affects economy: increase in efficiency, productivity & innovation - Market signals (*competition, and consumer behavior)* rather than central planning directives Stratification = remaking inequality: growth, less poverty, higher social mobility, changing inequality - = rise of class stratification similar to the West; middle class (Basically, China would become more like the west) *Economic success increasingly outweighs political loyalty. Economic Achievement Over Political Loyalty. Success is increasingly determined by individual or organizational talent, competence, capacities, skills, and an entrepreneurial mindset, rather than relying solely on political connections or capital.* *This shift could lead to greater social mobility, economic growth, and a reduction in poverty. However, it may also bring about a new form of inequality tied to class stratification, resembling patterns seen in Western societies.* ***Power conversion thesis*** (Walder) = no decline in relevance political power, persistence of political influence (predicted the complete opposite. There will not be a decline in political power. The people higher up in the hierarchy could. Conversion in those in power and high political power) (economic growth but the system stays the same) When this system chances to a capitalistic system people high in the hierarchy in communism will be able to convert their political power to economic power. Although in name it isn't communism anymore it still is. The same people will have the same power and connections Transitioning to the market would lead to a decline in relevance of political power. Stratification/ inequality would change. Not about the family you were born into but based on your talent. - Political elites use their power to gain control over economic resources - Manipulate reforms to their advantage - Continuity of state influence - Political and economic elites form alliances - Convergence of political and economic power - Successful entrepreneurs have/need political ties: connection = success - Stratification = economic growth; unlikely poverty reduction; little social mobility; exacerbating inequality (elites keep benefits for themselves) First article: (remaking inequality: institutional change and income stratification in urban China - How do institutional changes towards the market transform income inequality in China's urban economy? - Compare two urban regions that are very similar - Both very populous and industrialized, but different reform trajectories - Shangai (later, state-controlled) - Guangzhou (earlier, more marketized) - Expectations: - Mindset will be more important than political network The human capital is a more important factor of your income in Guangzhou Education and the type of firm you work for influence your wage Political money doesn't matter- but this is not the case for every communist party member- older people tend to earn more Second article: Hukou stratification, class structure, and earnings in transitional China - Earnings driven market liberalization or state power? - Race between two stratification systems: - Hukou- it is loosened a bit. People can change it but it is still very hard - China well into capitalism - Rural stayers- because they don't know better Class stratification coefficient (.262) has more than the hukou coefficient (.104) Evidence is pro market transition theory, but people with a lot of power can get their children to the best schools. Lecture 4 In the western world there is [slow economic growth], [rising within-country income inequality] and lower income groups are struggling. People get their [income] from [the labour market and welfare state]. Labour market changes explain rising inequality. There is more [labour market flexibility], which means that employers can hire more people, but also can fire. Also, the welfare state can explain changing inequalities. [Social investment & active labour market policies]: make people more employable. But there is also [Welfare conditionality]: tightening of social protection. [So changes in labor market and welfare state both have an effect on job security, earnings and welfare policies which explain the changes in the west. ] Long term, [structural unemployment] brings problems and [labor market flexibility is the solution]. It [reduces risks] for companies and keeps the west as an [interesting investment]. It reduces unemployment. Forms - Outsourcing *-- freelancers* - Functional flexibility *-- role variation* - Wage flexibility *-- wage adjustments (US, UK, companies can give employs a wage cut) (Also getting a bonus)* - Numerical flexibility *-- shrink core of workers with permanent contracts + increase numbers of workers with flexible contracts (PHILIPS in Eindhoven used to give employees a contract, now they don't have.)* - Temporal flexibility *-- working time/hours (Time management, parental leave etc.) (0 hour contract; it can also be an advantage for employers)* Individual level consequences: From stable to temporary work. Attractive work-life balance, sense of control, but poorer labour conditions, less protection, pays less, less training, higher unemployment risk. **Exclusionary (uitsluitend) vs. 'integrative': stepping stone or not?** 17 career types that are classified based on employment and income security. The *[stepping-stone clusters]* with both high levels of employment security and income security are clusters [1 to 5]. Workers make the transition to [permanent employment] relatively fast and earn decent and stable incomes. The *[trap clusters]* can be found at the opposite side of the grid. In clusters [14 to 17], non-employment plays a central role. The bottom-right quadrant of the grid contains careers that have [high employment security], but low levels of income security (clusters 6 and 7). These workers make the transition to permanent employment, but earn quite low wages, making them [economically vulnerable].  Cluster 8, in the top-left of the quadrant, consists of careers in which workers have low levels of employment security as they work mostly in fixed-term contracts, but earn quite high incomes, giving them high levels of income security [It can act as a stepping stone: you start with a fixed term and improve your job and get a permanent job]. Only in the countries above the 50 percent line. It can be a trap if it doesn't work as a steppingstone. Even in the Netherlands only 41% move to permanent positions - the upper right quadrant. System level **Social-democratic** welfare states: '[flexicurity'], also NL; all work is more or less protected **Liberal** countries: stepping stone, [integrative], but: *all* work became more uncertain **Conservative-corporatist** variations: trap, [exclusionary]; insider-outsider divide Welfare state response: **Efficiency hypothesis** Governments and companies adopt the most [efficient policies to stay comparative]. Often prioritize [profits over labor concerns]. This can lead to [a race to the bottom], where lower wages, standards and rights attract investments. Power of [capital over labor] increases, business gain more control. This can create [financing problems,] struggling to provide public services. Global competition can lead to lower standards for workers and make it harder for governments to maintain protections. **Compensation hypothesis** When globalization and economic changes lead to [job losses or insecurity], governments respond by [increasing welfare and social spending to compensate]. This includes things like [automatic] [spending], where programs such as unemployment benefits or pensions automatically increase when more people lose jobs. Politically, there's often an [increased demand for spending] to help those affected by job loss, providing financial support or retraining. In [conservative-corporatist countries, early retirement] schemes may be used as part of this compensation, allowing older workers to retire early in exchange for making room for younger workers, a system sometimes referred to as [exchange politics]. In simple terms, when people lose jobs due to economic changes, governments often step in with financial support to reduce the impact. Political: people will be confronted with the social risks and express an interest in the voting booth for [political parties that support the welfare state]  How they sought to test the hypothesis was very [simplistic]. It wasn't scientifically sound. They just compared countries, instead of looking at them over time It is almost impossible to not find that globalization expands the welfare state. Countries with largest / most generous welfare states tend to be small countries with very open economies scoring high & methodologically unsound. theoretical & methodological advancements **Busemeyer** One way to [measure the impact of globalization on the welfare state] is measuring [the state spending.] focus on modelling *[within-country] change over time.* Impact of globalization on spending has become negative over time. Within countries, more globalization leads to less spending **Nam** Focus on *[between-country]* variations. Measures it by looking at something that the [welfare state tries to prevent rising income inequality.] Focus on 'compensation': which welfare states compensate for 'distributional consequences' of globalization (rising income inequality). Results: All globalization variables impact positively on [market income] inequality. Lesser and smaller positive significant effects on disposable income inequality, large negative effects of welfare generosity. [Positive effect of globalization on disposable income inequality is smaller in countries with more generous unemployment insurance]. There is development within counties and the extend of inequality is different across countries. They all look like increasing. The [Nordic countries], Denmark and Sweden, Norway are low. For the US it goes up to 35  Blue line: effect of globalization on inequality The effect of trade volume on income inequality. In cases of low welfare generosity is a positive effect. [The more trade in a situation with low welfare generosity the more positive the effect.] With high generosity there is a negative effect. Answer to these studies is [dualization] Even though globalization creates displaced workers, generous benefits of unemployment insurance compensate them for reduced or lost wages and mitigate the negative impact of globalization on disposable income inequality. Basically, the impact of globalization on welfare states differs. Conclusion - Not Retrenchment/efficiency (too simplistic a mechanism) - Not Compensation: U-curve response: increase over time - Variation across Welfare States - The mechanism? **'dualization'** = indirect [impacts] of globalization [on social risks] by [influencing the relationship] between [welfare states and labour markets] **[Dualization ]** A framework that brings together the c[hanges in the labour market and the changes in the welfare state]- these combined give answer to the question with [the impact of globalization] is We live in different boats- huge gaps between winners and losers of globalization **Downward dualization** Downward dualization refers to the [reduced inclusiveness in labor markets], leading to distinct groups of insiders and outsiders. Downward dualization leads to [greater stratification of class risks] and creates distinct \'loser\' and \'winner\' groups. It has various factors: globalization and people aging **Two related processes to dualization** - A process of less inclusiveness on [the labour market]: [labour market insiders vs outsiders ] - A process of less inclusiveness in terms of [social insurance]: insurance in vs outsiders both are related and reinforce each other [Two related processes]; the lucky people who het permanent jobs because they are highly educated, the labor market insiders, they are very secure. But you also have, [most of them lower educated, do not contribute to social security]. Less inclusiveness in terms of securance. You have in and outsiders in a welfare state. They intersect. [The winners in the labor market are also the winners in the welfare state. ] **How dualization started** Originally the welfare state is a case of full employment. There is horizontal distribution and almost everyone contributes and collects. However[, globalization led to structural unemployment]. 2 solutions: 1: early retirement financial issues 2: LMF + making social protection stricter From 'passive' compensation To Social investment & ALMP, active labour market policy (It promotes social reintegration into the workforce) **Result: [recommodification]** Recommodification signifies a shift towards a [more market-oriented welfare state that emphasizes individual responsibility.] The welfare state has become less pro-poor and increasingly restricted horizontal redistribution primarily to the insiders or \'winners\' of globalization in response to dualization. **Consequences** Social polarization between 'losers' and 'winners' Horizontal redistribution becomes more restricted to insiders Welfare states became less 'pro-poor: decreasing solidarity Class risks became more stratified (new risks groups heterogenous Variation across Welfare States **Conclusions** 1\. The impact of globalization on social risks and the welfare state is indirect. 2\. Processes of globalization interact with 'local' institutionalized power structures (in particular nation-(welfare) states) and local cultures, and therefore lead to diverse outcomes in different countries and social groups. 3\. Globalization decreased global inequality (i.e. between countries), but it tends to increase within-country inequality because it intensifies existing inequalities. Social polarization results from increased differences between 'losers' and 'winners'. Such polarization undermines the 'social contract' on which welfare states are based. 4\. (Economic) globalization has had little direct impact on welfare states, but has transformed 'old' social risks and created 'new' social risks (partly through the flexibilization of labour markets). Globalization has thus a larger indirect impact on welfare states by changing the nature of social risks, which prompts further policy reform and leads to 'uncertainty', which in turn impacts on individual life courses. 5\. Globalization requires responses and policy-coordination (a new 'social contract') at a higher level (i.e. Europe, the world), but collective action of this sort can become problematic or even impossible. Global problems require coordination of actions of nation-states (e.g. the 'European Social Model', climate treaties,...), but its outcomes are more diffuse and uncertain. Afbeelding met tekst, schermopname, Lettertype Automatisch gegenereerde beschrijving Lecture 5 **Politicization** Politicization is the accumulation of salience (stand out) through contestation (protest)- the conflict draws a lot of attention [Politicization = salience x (actor expansion + polarization)] It is about salience and urgent. How can we define polarization. You have a lot of actors involved, also people from the government. And if you would draw an illustration, you would get a distribution like: U. Not only society but also politicians etc. diverse set of actors. If you look at the distribution of the opinions on the topic it would be polarized. There are many people at the extremes. Politicization on different levels: citizen (pegida), state (electric car tariffs) Key events: Trump and Brexit **Globalization and cleavage theory** [Cleavages]: a deep and lasting division between groups based on some kind of conflict. (left-right) **Three core elements:** - **Structural**: large social [groups with conflicting interests] - Position of class, religion, education, region - You have in all nations a conflict like this. For example, Scotland and Catalonia, they have a different interest. Social class is also a structural determined conflict. - **Cultural**: element of [collective identity (]you demonize the other side, for example abortion is for the devils. For example, Trump telling baby's are being aborted, or standing in front of a abortion center) - Consciousness of group identities and ideological values... and willing to act on that basis - **Organizational**: [Organizational expression] in form of collective action by movements/political parties; mobilization of these identities. - Unions defending workers' interests; Labour Party - Parties institutionalize the conflict and articulate it (continuously) politically **4 types of cleavages** Owner vs. worker (labour- capital) Church vs. state Urban vs. rural Centre vs. periphery [Revolutions caused these conflicts] National revolution ("nationalization") - Centre-periphery cleavage (And the nation state is an aggregation of regions that may want to be independent) - **Religious cleavage (**needed to compete with the church) Industrial revolution ("industrialization") (huge migration from rural to urban for example. Overtime the wish to organize themselves.) - Urban-rural cleavage - **Labour-capital cleavage** Global revolution ("Globalization") - ? - Some argue what we are now experiencing is global revolution. This will cause new structural conflicts There is a reshuffling **Economic and cultural globalization create a new integration-demarcation cleavage** It has become more about people who [social economically profited] a lot from globalization. Higher educated people. And the losers of globalization whose jobs are outsourced. - [Socio-economic] division between those who (do not) benefit from globalization - Winners vs losers. Employees competitive and traditionally protected sectors - [Cultural division] of integration versus demarcation (division) - Open (cosmopolitans) vs closed society (protecting culture, elements of welfare-state chauvinism) **Integration-demarcation is embedded in two-dimensional political space** - Socio economic dimension: pro state vs pro market position (Left right) - Degree of social redistribution and government intervention - National welfare state: solidarity issues--inclusion and exclusion - Which groups should get what and why? - Welfare conditionality and welfare chauvinism - Cultural dimension: universalism vs particularism - Libertarianism vs authoritarianism (individual autonomy vs traditional order) - Cosmopolitanism vs communitarianism/anti-immigration (open vs closed society) **Welfare chauvinism** [Welfare chauvinism: welfare should be restricted to 'our own'] - a belief, you consider the benefits of the welfare state to be constricted ethnically. It should be restricted to our own. - Populist for a long time against redistribution and for a closed society (right) - Populist: mythical, homogeneous and unified common people + elite + 'threat **Example** By asking the question welfare chauvinism is being measured. Strict welfare chauvinism is the idea that welfare benefits should be reserved for the native position. [Most Europeans defend a middle position.] Only 10% of the Europeans share this idea, however there are regional differences. [Eastern European respondents are ] [more unwilling to provide social rights for immigrants.] The percentage of welfare chauvinists is also higher than in other regions. Eastern Europe has relatively low immigration rates and levels of [social spending.] Apparently, welfare chauvinism can succeed in a climate of [dissatisfaction with the social protection system] (corruption) combined with unfamiliarity with immigrants. In [Portugal and Spain, the percentage that newcomers should receive social rights upon arrival has even increased]. The refugee crisis did not trigger welfare chauvinist feelings (across Europe) and after the economic crisis Portugal and Spain became more open. The Nordic countries have the [more open system and more equality], so they support equal rights more. The Nordic welfare states are strongly developed. In Northern and Western Europe, granting rights based on reciprocity (having paid taxes for at least one year) is the most popular position by far. Conclusion, [the generosity of the welfare system is a driver of the differences in attitudes towards social Europe/immigrants/welfare chauvinism]. Example 2  Immigrant welfare claimants receive lower levels of solidarity than native welfare claimants. There is large variation across the electorates in welfare chauvinism The biggest distinction made is among the party members of Geert Wilders. **70 per cent of Wilders' electorate would grant unemployed Daan 70 per** **cent or more welfare provision of his latest income. In case this unemployed person is of foreign origin, this drops to 40 per cent. This means that there is a deservingness gap of 30 percentage points between natives and foreign-born people.** **No other party electorate reports equally sizeable deservingness gaps. However, the left-wing SP, Christian-Democratic CDA, and conservative VVD voters report similar deservingness gaps of approximately 15 percentage points. As a left-wing party, solidarity is on average rather high among the electorate of the SP. Almost 90 per cent perceives a native unemployed person as deserving of 70 per cent of his latest income** **Lower levels of solidarity are present among the conservative electorates of the CDA and VVD** **Most egalitarian are voters of the social-democratic PvdA and the left-liberal D66, with deservingness gaps close to five percentage points. While voters of PvdA are generally in favor of a generous welfare state, they also favor immigrants to have an equal amount of welfare provisio** **Most egalitarian are voters of the social-democratic PvdA and the left-liberal D66, with deservingness gaps close to five percentage points. While voters of PvdA are generally in favor of a generous welfare state, they also favor immigrants to have an equal amount of welfare provisio** **voters of the most progressive parties, no distinction is being made between natives and immigrants therefore does not hold.** **Welfare deservingness criteria** CARIN - - - - - **Institutional theory** [Political preferences & attitudes are shaped by institutions.] The structure of welfare regimes influences/frames how people perceive those in need. Welfare regimes welfare deservingness welfare chauvinism **Three Worlds of Welfare Chauvinism** Welfare regimes differ on three dimensions: (1) selectivity,\ ranging from residual or means-tested to universal; (2) inequality, indicating the level of\ income inequality; and (3) labor-market trajectory, indicating the extent to which regimes\ offer employment opportunities. For each of these dimensions, the expected rank order of\ the three welfare regimes is indicated. The next column displays rank orders on the three\ deservingness criteria: (1) deviance, indicating the extent to which majority populations\ consider immigrants to be deviant; (2) need, representing the extent to which majority\ populations perceive immigrants to be in need of welfare services; and (3) control,\ indicating the extent to which those populations perceive immigrants to be in control\ over their own employment situation. hese by and large expect that social-democratic welfare states result in the highest\ levels of solidarity and tolerance among their majority populations, followed by conservative\ and liberal ones respectively majority populations in liberal welfare regimes are on average less supportive of\ policies directed at the poor and the unemployed than those in conservative regimes, and\ especially less than those in social-democratic ones - Selectivity dimension: means tested vs universal - Inequality dimension: reduction of market inequality (the Scandinavian states) - Labor market trajectory dimension: opportunities for the low skilled **Welfare regimes** - Selectivity dimension: means tested vs universal - Inequality dimension: reduction of market inequality (the Scandinavian states) - Labor market trajectory dimension: opportunities for the low skilled **Deservingness criteria** - Deviance/identity - Control - Need (Remember the means tested and... test. USA vs Scandinavian 1\. Selectivity & Inequality deviance/identity - Selectivity = "not one of us"; "us-vs-them" because of on welfare vs not. - Inequality= "not one of us"; "us-vs-them" because of different lifestyle (for example having no pool so not being able to swim. The rich would hire someone) 2\. Labor market trajectory need & control - Liberal (high labour demand given low wages) and social democratic (employed in public sector) more job opportunities compared to conservative corporatist (in vs outsider), so low 'need' - Social democratic and conservative corporatist have higher employment regulation compared to liberal regimes, so more leeway to find a job/less difficulties/more control in liberal Selectivity and inequality in welfare systems can lead to social divides and identity issues. Selectivity creates an \"us vs. them\" mentality, where those receiving welfare are seen as outsiders, fostering social exclusion. Inequality, on the other hand, emphasizes lifestyle differences between the rich and poor, further deepening this divide. For example, wealthier individuals can afford luxuries like swimming pools, while the poor cannot, reinforcing perceptions of difference. In terms of labor market trajectories, liberal welfare states, with high labor demand due to low wages, offer more job opportunities and flexibility, allowing people more control over their work situations. Social democratic states provide stable public sector jobs and strong worker protections, making employment more accessible. Conservative corporatist states, however, have fewer job opportunities and stricter divisions between secure (insiders) and insecure (outsiders) employment, despite having higher employment regulations similar to social democratic states. **Welfare chauvinism and welfare state**  Explanatory: higher education means less chauvinism. And there are 2 words instead 3, only social democratic have less chauvinism Seminar 5 **What are arguments pro or contra globalization:** - PRO: cultural improvement and diversity and connection (influences of different cultures on other cultures). - CONS: Poor countries, political globalization. Some organizations are not politically elected it is problematic that they regulate globalization. For example, Kenia had a problem with IMF because they could not make decisions on their own. **Yellow vests** What caused the wave of Yellow Vest protests? - In response to the government's decision to abolish the tax advantage for diesel fuel. A tax that was normally being held on diesel fuel, they wanted to stop it. It was simultaneously when Greta started with climate protests. A month later Macron decided to keep the tax advantage. What were characteristics of the yellow vest protesters? - 89% had difficulties with money, working-class, but mainly small independent people who stressed about politics. How, if at all, is the yellow vest movement related to globalization? - Diffusion: the protest diffused globally, they went viral, all of a sudden people started demonstrating, there weren't any organization or structure behind it, it was just a Facebook page. It is a very globalized dimension. Other argument: Macron decided to cut to tax advantaged, because the climate change. And this creates a tension between the needs of the large and the people with the needs in different strata. Economic argument: the yellow vest people are who gain less from globalization, basically they are the losers of globalization. And all of the sudden they are in another world and their jobs are being outperformed with other jobs due to globalization. Milanovic uneven distribution of globalization. Would you consider the yellow vest movement primarily as an expression of economic alienation, political alienation, or both? Argue. - The urban/rural divide. Class, and politics. The new players make claims and are threatening. Migrants are parasites and profit from the welfare state. They don't feel represented anymore by the main players.