S2 - Esping-Andersen-The three world of welfare capitalism.pdf

Gosta Esping-Andersen 137 to urbanization, level of economic growth, and the proport...

Gosta Esping-Andersen 137 to urbanization, level of economic growth, and the proportion of aged in Three Worlds of Welfare the demographic structure, it was believed that the essential features of industrial modernization were properly considered. Alternatively, power- Capitalism oriented theories compared nations on left-party strength or working- class power mobilization. The findings of the first-generation comparativists are difficult to evalu- ate, since there is no convincing case for any particular theory. The short- Gasta Esping-Andersen age of nations for comparisons statistically restricts the number of variables that can be tested simultaneously. Thus, when Cutright (1965) or Wilensky (1975) find that economic level, with its demographic and bureaucratic correlates, explains most welfare-state variations in 'rich countries', rele- vant measures of working-class mobilization or economic openness are not included. Their conclusions in favour of a 'logic of industrialism' view are therefore in doubt. And, when Hewitt (1977), Stephens (1979), Korpi (1983), Myles (1984) and Esping-Andersen (1985) find strong evidence in What is the Welfare State? favour of a working-class mobilization thesis, or when Schmidt (1982, 1983) finds support for a neo-corporatist, and Cameron (1978) for an Every theoretical paradigm must somehow define the welfare state. How economic openness argument, it is without fully testing against plausible do we know when and if a welfare state responds functionally to the needs alternative explanations. of industrialism, or to capitalist reproduction and legitimacy? And how Most of these studies claim to explain the welfare state. Yet their focus do we identify a welfare state that corresponds to the demands that a on spending may be misleading. Expenditures are epiphenomenal to the mobilized working class might have? We cannot test contending argu- theoretical substance of welfare states. Moreover, the linear scoring ments unless we have a commonly shared conception of the phenomenon approach (more or less power, democracy or spending) contradicts the to be explained. sociological notion that power, democracy or welfare are relational and A remarkable attribute of the entire literature is its lack of much genuine structured phenomena. By scoring welfare states on spending, we assume interest in the welfare state as such. Welfare state studies have been moti- that all spending counts equally. But some welfare states, the Austrian vated by theoretical concerns with other phenomena, such as power, one, for example, spend a large share on benefits to privileged civil serv- industrialization or capitalist contradictions; the welfare state itself has ants. This is normally not what we would consider a commitment to social generally received scant conceptual attention. If welfare states differ, how citizenship and solidarity Others spend disproportionately on means- do they differ? And when, indeed, is a state a welfare state? This turns tested social assistance. Few contemporary analysts would agree that a attention straight back to the original question: what is the welfare state? efol med poor-relief tradition qualifies as a welfare-state commitment. A common textbook definition is that it involves state responsibility Some nations spend enormous sums on fiscal welfare in the form of tax for securing some basic modicum of welfare for its citizens. Such a defini- pr ivileges to private insurance plans that mainly benefit the middle classes. tion skirts the issue of whether social policies are emancipatory or not; But these tax expenditures do not show up on expenditure accounts. In whether they help system legitimation or not; whether they contradict or Britain, total social expenditure [grew] during the Thatcher period, yet aid the market process; and what, indeed, is meant by 'basic'? Would it this is almost exclusively a function of very high unemployment. Low not be more appropriate to require of a welfare state that it satisfies more expenditure on some programmes may signify a welfare state more seri- than our basic or minimal welfare needs? ously committed to full employment. The first generation of 'comparative studies started with this type Therborn (1983) is right when he holds that we must begin with a con- of conceptualization. They assumed, without much reflection, that the ception of state structure. What are the criteria with which we should judge level of social expenditure adequately reflects a state's commitment to whether, and when, a state is a welfare state? There are three approaches to welfare. The theoretical, intent was not really to arrive at an understand- this question. Therborn's proposal is to begin with the historical transfor- ing of the welfare state, but rather to test the validity of contending mation of state activities. Minimally, in a genuine welfare state the majority theoretical models in political economy. By scoring nations with respect of its daily routine activities must be devoted to servicing the welfare needs of households. This criterion has tar-reaching consequences. It we simply be fleshed out. Above all, it must involve the granting of social rights. If measure routine activity in terms of spending and personnel, the result is social rights are given the legal and practical status of property rights, if that no state can be regarded as a real welfare state until the 1970s, and some they are inviolable, and if they are granted on the basis of citizenship that we normally label as welfare states will not qualify because the major- rather than performance, they will entail a de-commodification of the ity of their routine activities concern defence, law and order, administration status of individuals vis à vis the market. But the concept of social citizen- - - and the like (Therborn, 1983). Social scientists have been too quick to ship also involves social stratification: one's status as a citizen will compete accept nations' self-proclaimed welfare state status. They have also been with, or even replace, one's class position. too quick to conclude that if the standard social programmes have been The welfare state cannot be understood just in terms of the rights it introduced, the welfare state has been born. grants. We must also take into account how state activities are interlocked The second conceptual approach derives from Richard Titmuss's (1958) with the market's and the family's role in social provision. These are the classical distinction between residual and institutional welfare states. In three main principles that need to be fleshed out prior to any theoretical the former, the state assumes responsibility only when the family or the specification of the welfare state. market fails; it seeks to limit its commitments to marginal and deserving social groups. The latter model addresses the entire population, is univer- salistic, and embodies an institutionalized commitment to welfare. It will, Rights and De Conmodification - in principle, extend welfare commitments to all areas of distribution vital for societal welfare. In pre-capitalist societies, few workers were properly commodities in the The Titmuss approach has fertilized a variety of new developments in sense that their survival was contingent upon the sale of their labour comparative welfare state research (Korpi, 1980; Myles, 1984; Esping- power. It is as markets become universal and hegemonic that the welfare Andersen and Korpi, 1984, 1986; Esping-Andersen, 1985, 1987). It is an of individuals comes to depend entirely on the cash nexus. Stripping approach that forces researches to move from the black box of expendi- society of the institutional layers that guaranteed social reproduction tures to the content of welfare states: targeted versus universalistic pro- outside the labour contract meant that people were commodified. In turn, grammes, the conditions of eligibility, the quality of benefits and services, the introduction of modern social rights implies a loosening of the pure and, perhaps most importantly, the extent to which employment and commodity status. De-commodification occurs when a service is rendered working life are encompassed in the state's extension of citizen rights. The as a matter of right, and when a person can maintain a livelihood without shift to welfare state typologies makes simple linear welfare state rankings reliance on the market. difficult to sustain. Conceptually, we are comparing categorically different The mere presence of social assistance or insurance may not necessarily types of state. bring about significant de-commodification if they do not substantially The third approach is to theoretically select the criteria on which to emancipate individuals from market dependence. Means-tested poor relief judge types of welfare state. This can be done by measuring actual welfare will possibly offer a safety net of last resort. But if benefits are low and states against some abstract model and then scoring programmes, or entire associated with social stigma, the relief system will compel all but the most welfare states, accordingly (Myles, 1984). But this is ahistorical, and does desperate to participate in the market. This was precisely the intent of the not necessarily, capture the ideals or designs that historical actors sought nineteenth-century Poor Laws in most countries. Similarly, most of the to realize in the struggles over the welfare state. If our aim is to test causal early social-insurance programmes were deliberately designed to maxi- theories that involve actors, we should begin with the demands that were mize labour-market performance. actually promoted by those actors that we deem critical in the history of There is no doubt that de-commodification has been a hugely contested welfare state development. It is difficult to imagine that anyone struggled issue in welfare state development. For labour, it has always been a for spending per se. priority. When workers are completely market-dependent, they are dif- ficult to mobilize for s ❑lidaristic action. Since their resources mirror market inequalities, divisions emerge between the 'ins' and the 'outs', A Re - specification of the Welfare State making labour-movement formation difficult. De-commodification strengthens the workers and weakens the absolute authority of the Few can disagree with T. H. Marshall's (1950) proposition that social citi- employer. It is for exactly this reason that employers have always opposed zenship constitutes the core idea of a welfare state. But the concept must de-commodification.  iie-commoainea rights are differentially developed in contemporary welfare states tend to be the most de-commodifying; the Anglo-Saxon the welfare states. In social-assistance dominated welfare states, rights are not least. so much attached to work performance as to demonstrable need. Needs- tests and typically meagre benefits, however, service to curtail the decom- modifying effect. Thus, in nations where this model is dominant (mainly The Welfare State as a Systcm of Stratification in the Anglo-Saxon countries), the result is actually to strengthen the market since all but those who fail in the market will be encouraged to Despite the emphasis given to it in both classical political economy and contract private-sector welfare. in T. H. Marshall's pioneering work, the relationship between citizenship A second dominant model espouses compulsory state social insurance and social class has been neglected both theoretically and empirically. with fairly strong entitlements. But again, this may not automatically Generally speaking, the issue has either been assumed away (it has been secure substantial de-commodification, since this hinges very much on the taken for granted that the welfare state creates a more egalitarian society), fabric of eligibility and benefit rules. Germany was the pioneer of social or it has been approached narrowly in terms of income distribution or in insurance, but over most of the [twentieth century] can hardly be said to terms of whether education promotes upward social mobility. A more have brought about much in the way of de-commodification through its basic question, it seems, is what kind of stratification system is promoted social programmes. Benefits have depended almost entirely on contribu- by social policy. The welfare state is not just a mechanism that intervenes tions, and thus on work and employment. In other words, it is not the in, and possibly corrects, the structure of inequality; it is, in its own right, mere presence of a social right, but the corresponding rules and precondi- a system of stratification. It is an active force in the ordering of social tions, which dictate the extent to which welfare programmes offer genuine relations. alternatives to market dependence. Comparatively and historically, we can easily identify alternative The third dominant model of welfare, namely the Beveridge-type citi- systems of stratification embedded in welfare states. The poor-relief tradi- zens' benefit, may, at first glance, appear the most de-commodifying. It tion, and its contemporary means-tested social-assistance offshoot, was offers a basic, equal benefit to all, irrespective of prior earnings, contribu- conspicuously designed for purposes of stratification. By punishing and tions or performance. It may indeed be a more solidaristic system, but stigmatizing recipients, it promotes social dualisms and has therefore been not necessarily de-commodifying, since only rarely have such schemes a chief target of labour-movement attacks. been able to offer benefits of such a standard that they provide recipients The social-insurance model promoted by conservative reformers such with a genuine option to working. as Bismarck and von Taffe was also explicitly a form of class politics. It De-commodifying welfare states are, in practice, fairly recent. A sought, in fact, to achieve two simultaneous results in terms of stratifica- minimal definition must entail that citizens can freely, and without poten- tion. The first was to consolidate divisions among wage-earners by legis- tial loss of job, income or general welfare, opt out of work when they lating distinct programmes for different class and status groups, each with themselves consider it necessary. With this definition in mind, we would, its own conspicuously unique set of rights and privileges, which was for example, require of a sickness insurance that individuals be guaranteed designed to accentuate the individual's appropriate station in life. The benefits equal to normal earnings, and the right to absence with minimal second objective was to tie the loyalties of the individual directly to the proof of medical impairment and for the duration that the individual monarchy or the central state authority. This was Bismarck's motive when deems necessary. These conditions, it is worth noting, are those usually he promoted a direct state supplement to the pension benefit. This state- enjoyed by academics, civil servants and higher-echelon white-collar corporatist model was pursued mainly in nations such as Germany, employees. Similar requirements would be made of pensions, maternity Austria, Italy and France, and often resulted in a labyrinth of status- leave, parental leave, educational leave and unemployment insurance. specific insurance funds. Some nations have moved towards this level of de-commodification, Of special importance in this corporatist tradition was the establish- but only recently, and, in many cases, with significant exemptions. In ment of particularly privileged welfare provisions for the civil service almost all nations, benefits were upgraded to nearly equal normal wages (Beamten). In part, this was a means of rewarding loyalty to the state, and in the late 1960s and early 1970s. But in some countries, for example, in part it was a way of demarcating this group's uniquely exalted social prompt medical certification in case of illness is still required; in others, status. The corporatist status-differentiated model springs mainly from entitlements depend on long waiting periods of up to two weeks; and in the old guild tradition. The neo-absolutist autocrats, such as Bismarck, still others, the duration of entitlements is very short. [...] The Scandinavian saw in this tradition a means to combat the rising labour movements.  1 he labour movements were as hostile to the corporatist model as they ratist insurance tradition was, in a sense, best equipped to manage new were to poor relief — in both cases for obvious reasons. Yet the alternatives and loftier welfare-state expectations since the existing system could tech- first espoused by labour were no less problematic from the point of view nically be upgraded quite easily to distribute more adequate benefits. of uniting the workers as one solidaristic class. Almost invariably, the Adenauer's 1957 pension reform in Germany was a pioneer in this respect. model that labour first pursued was that of self-organized friendly socie- Its avowed purpose was to restore status differences that had been eroded ties or equivalent union- or party sponsored fraternal welfare plans. This because of the old insurance system's incapacity to provide benefits tai- is not surprising. Workers were obviously suspicious of reforms spon- lored to expectations. This it did simply by moving from contribution- sored by a hostile state, and saw their own organizations not only as bases to earnings-graduated benefits without altering the framework of of class mobilization, but also as embryos of an alternative world of soli- status-distinctiveness. darity and justice; as a microcosm of the socialist haven to come. In nations with either a social-assistance or a universalistic Beveridge- Nonetheless, these micro-socialist societies often became problematic type system, the option was whether to allow the market or the state to class ghettos that divided rather than united workers. Membership was furnish adequacy and satisfy middle-class aspirations. Two alternative typically restricted to the strongest strata of the working class, and the models emerged from this political choice. The one typical of Great weakest — who most needed protection — were most likely excluded. In Britain and most of the Anglo-Saxon world was to preserve an essentially brief, the fraternal society model frustrated the goal of working-class modest universalism in the state, and allow the market to reign for the mobilization. growing social strata demanding superior welfare. Due to the political The socialist 'ghetto approach' was an additional obstacle when socialist power of such groups, the dualism that emerges is not merely one between parties found themselves forming governments and having to pass the state and market, but also between forms of welfare-state transfers: in social reforms they had so long demanded. For political reasons of coali- these nations, one of the fastest growing components of public expendi- tion-building and broader solidarity, their welfare model had to be recast ture is tax subsidies for so-called 'private' welfare plans. And the typical as welfare for 'the people'. Hence, the socialists came to espouse the political effect is the erosion of middle-class support for what is less and principle of universalism; borrowing from the liberals, their programme less a universalistic public-sector transfer system. was, typically, designed along the lines of the democratic flat-rate, general Yet another alternative has been to seek a synthesis of universalism and revenue-financed Beveridge model. adequacy outside the market. This road has been followed in countries As an alternative to means-tested assistance and corporatist social insur- where, by mandating or legislation, the state incorporates the new middle ance, the universalistic system promotes equality of status. All citizens are classes within a luxurious second-tier, universally inclusive, earnings- endowed with similar rights, irrespective of class or market position. In related insurance scheme on top of the flat-rate egalitarian one. Notable this sense, the system is meant to cultivate cross-class solidarity, a solidar- examples are Sweden and Norway. By guaranteeing benefits tailored to ity of the nation. But the solidarity of flat-rate universalism presumes a expectations, this solution reintroduces benefit inequalities, but effec- historically peculiar class structure, one in which the vast majority of the tively blocks off the market. It thus succeeds in retaining universalism and population are the 'little people' for whom a modest, albeit egalitarian, also, therefore, the degree of political consensus required to preserve benefit may be considered adequate. Where this no longer obtains, as broad and solidaristic support for the high taxes that such a welfare state occurs with growing working-class prosperity and the rise of the new model demands. middle classes, flat-rate universalism inadvertently promotes dualism because the better-off turn to private insurance and to fringe-benefit bar- gaining to supplement modest equality with what they have decided are Welfare State Regimes accustomed standards of welfare. Where this process unfolds (as in Canada or Great Britain), the result is that the wonderfully egalitarian spirit of As we survey international variations in social rights and welfare-state universalism turns into a dualism similar to that of the social-assistance stratification, we will find qualitatively different arrangements between state: the poor rely on the state, and the remainder on the market. state, market and the family. The welfare state variations we find are It is not only the universalist but, in fact, all historical welfare state therefore not linearly distributed, but clustered by regime-types. models which have faced the dilemma of changes in class structure. But In one cluster we find the 'liberal' welfare state, in which means-tested the response to prosperity and middle-class growth has been varied, and assistance, modest universal transfers or modest social-insurance plans so, therefore, has been the outcome in terms of stratification. The corpo- predominate. Benefits cater mainly to a clientele of low-income, usually working-class, state dependants. In this model, the progress of social furnished by guaranteeing workers full participation in the quality of reform has been severely circumscribed by traditional, liberal work-ethic rights enjoyed by the better-off. norms: it is one where the limits of welfare equal the marginal propensity This formula translates into a mix of highly de-commodifying and to opt for welfare instead of work. Entitlement rules are therefore strict universalistic programmes that, nonetheless, are tailored to differentiated and often associated with stigma; benefits are typically modest. In turn, expectations. Thus, manual workers come to enjoy rights identical with the state encourages the market, either passively — by guaranteeing only those of salaried white-collar employees or civil servants; all strata are a minimum — or actively — by subsidizing private welfare schemes. incorporated under one universal insurance system, yet benefits are grad- The consequence is that this type of regime minimizes de-commodifi- uated according to accustomed earnings. This model crowds out the cation effects, effectively contains the realm of social rights, and erects an market, and consequently constructs an essentially universal solidarity in order of stratification that is a blend of a relative equality of poverty favour of the welfare state. All benefit; all are dependent; and all will among state-welfare recipients, market-differentiated welfare among the presumably feel obliged to pay. majorities, and a class-political dualism between the two. The archetypical The social democratic regime's policy of emancipation addresses both examples of this model are the United States, Canada and Australia. the market and the traditional family. In contrast to the corporatist-sub- A second regime-type clusters nations such as Austria, France, Germany sidiarity model, the principle is not to wait until the family's capacity to and Italy. Here, the historical corporatist-statist legacy was upgraded to aid is exhausted, but to pre-emptively socialize the costs of familyhood. cater to the new 'post-industrial' class structure. In these conservative and The ideal is not to maximize dependence on the family, but capacities for strongly 'corporatist' welfare states, the liberal obsession with market individual independence. In this sense, the model is a peculiar fusion of efficiency and commodification was never pre-eminent and, as such, the liberalism and socialism. The result is a welfare state that grants transfers granting of social rights was hardly ever a seriously contested issue. What directly to children, and takes direct responsibility of caring for children, predominated was the preservation of status differentials; rights, there- the aged and the helpless. It is, accordingly, committed to a heavy social- fore, were attached to class and status. This corporatism was subsumed service burden, not only to service family needs but also to allow women under a state edifice perfectly ready to displace the market as a provider to choose work rather than the household. of welfare; hence, private insurance and occupational fringe benefits Perhaps the most salient characteristic of the social democratic regime play a truly marginal role. On the other hand, the state's emphasis on is its fusion of welfare and work. It is at once genuinely committed to a upholding status differences means that its redistributive impact is full-employment guarantee, and entirely dependent on its attainment. On negligible. the one side, the right to work has equal status to the right of income But the corporatist regimes are also typically shaped by the Church, protection. On the other side, the enormous costs of maintaining a soli- and hence strongly committed to the preservation of traditional family- daristic, universalistic and de-commodifying welfire system means that it hood. Social insurance typically excludes non-working wives, and family must minimize social problems and maximize revenue income. This is benefits encourage motherhood. Day care, and similar family services, are obviously best done with most people working, and the fewest possible conspicuously underdeveloped; the principle of `subsidiarity' serves to living off social transfers. emphasize that the state will only interfere when the family's capacity to Neither of the two alternative regime-types espouse full employment service its members is exhausted. as an integral part of their welfare state commitment. In the conservative The third, and clearly smallest, regime-cluster is composed of those tradition, of course, women are discouraged from working; in the liberal countries in which the principles of universalism and de-commodification ideal, concerns of gender matter less than the sanctity of the market. of social rights were extended also to the new middle classes. We may call [...] Welfare states cluster, but we must recognize that there is no single it the 'social democratic' regime-type since, in these nations, social democ- pure case. The Scandinavian countries may be predominantly social dem- racy was clearly the dominant force behind social reform. Rather than ocratic, but they are not free of crucial liberal elements. Neither are the tolerate a dualism between state and market, between working class and liberal regimes pure types. The American social-security system is redis- middle class, the social democrats pursued a welfare state that would tributive, compulsory and far from actuarial. At least in its early formula- promote an equality of the highest standards, not an equality of minimal tion, the New Deal was as social democratic as was contemporary needs as was pursued elsewhere. This implied, first, that services and Scandinavian social democracy. And European conservative regimes have benefits be upgraded to levels commensurate with even the most discrimi- incorporated both liberal and social democratic impulses. Over the nating tastes of the new middle classes; and, second, that equality be decades, they have become less corporativist and less authoritarian.  Notwithstanding the lack of purity, if our essential criteria for defining will command a parliamentary majority long enough to impose its will. welfare states have to do with the quality of social rights, social stratifica- [..] The traditional working class has hardly ever constituted an electoral tion and the relationship between state, market and family, the world is majority. It follows that a theory of class mobilization must look beyond obviously composed of distinct regime-clusters. Comparing welfare states the major leftist parties. It is a historical fact that welfare state construction on scales of more or less or indeed, of better or worse, will yield highly has depended on political coalition - building. The structure of class coali misleading results. tions is much more decisive than are the power resources of any single class. The emergence of alternative class coalitions is, in part, determined by class formation. In the earlier phases of industrialization, the rural classes The Causes of Welfare-State Regimes usually constituted the largest single group in the electorate. If social demo- crats wanted political majorities, it was here that they were forced to look If welfare states cluster into three distinct regime-types, we face a sub- for allies. One of history's many paradoxes is that the rural classes were stantially more complex task of identifying the causes of welfare state decisive for the future of socialism. Where the rural economy was domi- differences. What is the explanatory power of industrialization, economic nated by small, capital-intensive family farmers, the potential for an alliance growth, capitalism or working-class political power in accounting for was greater than where it rested on large pools of cheap labour. And where regime-types? A first superficial answer would be: very little. The nations farmers were politically articulate and well organized (as in Scandinavia), we study are all more or less similar with regard to all but the variable of. the capacity to negotiate political deals was vastly superior. working-class mobilization. And we find very powerful labour move- The role of the farmers in coalition formation and hence in welfare state ments and parties in each of the three clusters. development is clear. In the Nordic countries, the necessary conditions A theory of welfare state developments must clearly reconsider its obtained for a broad red—green alliance for a full-employment welfare causal assumptions if it wishes to explain clusters. The hope of finding state in return for farm price subsidies. This was especially true in Norway one single powerful causal force must be abandoned; the task is to identify and Sweden, where farming was highly precarious and dependent on state salient interaction effects. Based on the preceding arguments, three factors aid. In the United States, the New Deal was premised on a similar coali- in particular should be of importance: the nature of class mobilization tion (forged by the Democratic Party), but with the important difference (especially of the working class); class-political coalition structures; and that the labour-intensive South blocked a truly universalistic social secu- the historical legacy of regime institutionalization. rity system and opposed further welfare-state developments. In contrast, [...] There is absolutely no compelling reason to believe that workers the rural economy of continental Europe was very inhospitable to red— will automatically and naturally forge a socialist class identity; nor is it green coalitions. Often, as in Germany and Italy, much of agriculture was - plausible that their mobilization will look especially Swedish. The actual labour-intensive; hence the unions and left-wing parties were seen as a historical formation of working-class collectivities will diverge, and so threat. In addition, the conservative forces on the continent had succeeded also will their aims, ideology and political capacities. Fundamental differ- in incorporating farmers into 'reactionary' alliances, helping to consoli- ences appear both in trade unionism and party development. Unions may date the political isolation of labour. be sectional or in pursuit of more universal objectives; they may be Political dominance was, until after the Second World War, largely a denominational or secular; and they may be ideological or devoted to question of rural class politics. The construction of welfare states in this business unionism. Whichever they are, it will decisively affect the articu- period was, therefore, dictated by whichever force captured the farmers. lation of political demands, class cohesion and the scope for labour-party The absence of a red—green alliance does not necessarily imply that no action. It is clear that a working-class mobilization thesis must pay atten- welfare-state reforms were possible. On the contrary, it implies which tion to union structure. political force came to dominate their design. Great Britain is an exception The structure of trade unionism may or may not be reflected in labour- to this general rule, because the political significance of the rural classes party formation. But under what conditions are we likely to expect certain eroded before the turn of the century. In this way, Britain's coalition-logic welfare state outcomes from specific party configurations? There are many showed at an early date the dilemma that faced most other nations later; factors that conspire to make it virtually impossible to assume that any namely, that the rising white-collar strata constitute the linchpin for politi- labour, or left-wing, party will ever be capable, single-handedly, of struc- cal majorities. The consolidation of welfare states after the Second World turing a welfare state. Denominational or other divisions aside, it will be War came to depend fundamentally on the political alliances of the new only under extraordinary historical circumstances that a labour party alone middle classes. For social democracy, the challenge was to synthesize working-class and white-collar demands without sacrificing the commit- equality. We have presented a framework for comparing welfare states that ment to solidarity. takes into consideration the principles for which the historical actors have Since the new middle classes have, historically, enjoyed a relatively willingly united and struggled. When we focus on the principles embed- privileged position in the market, they have also been quite successful in ded in welfare states, we discover distinct regime-clusters, not merely meeting their welfare demands outside the state, or, as civil servants, by variations of 'more' or 'less' around a common denominator. privileged state welfare. Their employment security has traditionally been The historical forces behind the regime differences are interactive. They such thgt full employment has been a peripheral concern. Finally, any involve, first, the pattern of working-class political formation and, second, programme for drastic income-equalization is likely to be met with great political coalition-building in the transition from a rural economy to a hostility among a middle-class clientele. On these grounds, it would middle-class society. The question of political coalition-formation is deci- appear that the rise of the new middle classes would abort the social sive. Third, past reforms have contributed decisively to the institutionali- democratic project and strengthen a liberal welfare state formula. zation of class preferences and political behaviour. In the corporatist The political leanings of the new middle classes have, indeed, been regimes, hierarchical status-distinctive social insurance cemented middle- decisive for welfare state consolidation. Their role in shaping the three class loyalty to a peculiar type of welfare state. In liberal regimes, the welfare state regimes described earlier is clear. The Scandinavian model middle classes became institutionally wedded to the market. And in relied almost entirely on social democracy's capacity to incorporate them Scandinavia, the fortunes of social democracy over the past decades were into a new kind of welfare state: one that provided benefits tailored to the closely tied to the establishment of a middle-class welfare state that ben- tastes and expectations of the middle classes, but nonetheless retained efits both its traditional working-class clientele and the new white-collar universalism of rights. Indeed, by expanding social services and public strata. The Scandinavian social democrats were able to achieve this in part employment, the welfare state participated directly in manufacturing a because the private welfare market was relatively undeveloped and in part middle class instrumentally devoted to social democracy. because they were capable of building a welfare state with features of In contrast, the Anglo-Saxon nations retained the residual welfare state sufficient luxury to satisfy the wants of a more discriminating public. This model precisely because the new middle classes were not wooed from the also explains the extraordinarily high cost of Scandinavian welfare states. market to the state. In class terms, the consequence is dualism. The welfare But a theory that seeks to explain welfare state growth should also be state caters essentially to the working class and the poor. Private insurance able to understand its retrenchment or decline. It is generally believed that and occupational fringe benefits cater to the middle classes. Given the welfare state backlash movements, tax revolts and roll-backs are ignited electoral importance of the latter, it is quite logical that further extensions when social expenditure burdens become too heavy. Paradoxically, the of welfare state activities are resisted. opposite is true. Anti-welfare-state sentiments [since the 1980s] have gen- The third, continental European, welfare state regime has also been erally been weakest where welfare spending has been heaviest, and vice patterned by the new middle classes, but in a different way. The cause is versa. Why? historical. Developed by conservative political forces, these regimes insti- The risks of welfare state backlash depend not on spending, but on the tutionalized a middle-class loyalty to the preservation of both occupa- class character of welfare states. Middle-class welfare states, be they social tionally segregated social-insurance programmes and, ultimately, to the democratic (as in Scandinavia) or corporatist (as in Germany), forge mid- political forces that brought them into being. Adenauer's great pension dle-class loyalties. In contrast, the liberal, residualist welfare states found reform in 1957 was explicitly designed to resurrect middle-class loyalties. in the United States, Canada and, increasingly, Britain depend on the loyalties of a numerically weak, and often politically residual, social stratum. In this sense, the class coalitions in which the three welfare-state Conclusion regime-types were founded explain not only their past evolution but also their future prospects. We have here presented an alternative to a simple class-mobilization theory of welfare-state development. It is motivated by the analytical Note necessity of shifting from a linear to an interactive approach with regard to both welfare states and their causes. If we wish to study welfare states, From The Three Worlds of Welfare Capitalism, Cambridge, Polity Press, and we must begin with a set of criteria that define their role in society. This Princeton, Princeton University Press, copyright © 1990, pp. 18-34, by permis- role is certainly not to spend or tax; nor is it necessarily that of creating sion of Polity Press Ltd. and Princeton University Press. 150 Three Worlds of Welfare Capitalism References Cameron, D. R. (1978) 'The Expansion of the Public Economy: A Comparative Analysis', American Political Science Review, 72,4, pp. 1243-61. Cutright, P. (1965) 'Political Structure, Economic Development, and National Social Security Programs', American Journal of Sociology, 70, pp. 537-50. Esping-Andersen, G. (1985) 'Power and Distributional Regimes', Politics and Society, 14. 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