DO WE REALLY LIVE IN A WELFARE STATE?

...In this relationship, business cedes much of its ability to make unhindered market decisions in return for financial assistance at home and political support abroad...

...Third, the defects of the private welfare system must be recognized...

...that is, there is a concern to keep employment high enough to assure high levels of consumption and business activity...

...In social as well as economic policy, the social welfare state aims to promote equality and solidarity...

...Through this procedure public services remove important sectors of social life from the influence of the market...

...The major issue is not that all states have a policy of intervention, but that different states employ different policies for different purposes...

...The fundamental question has hardly changed: does what has come to be known as the welfare state represent a new type of society, a suitable way station to socialism, or is it rather (as Michael Harrington has argued in these pages) "a new way of protecting the older order...

...The social security state represents the program of modern European liberals based on the ideas and policy proposals of such social theorists as Beveridge and Ohlin...

...The government employs the instruments of economic policy to achieve "minimalist full employment...

...Greater emphasis ought to fall on preventive medicine, especially during pregnancy and childhood...

...Our three "models" are the positive state, the social security state, and the social welfare state...

...Consternation arises when unemployment hits sectors of the labor market controlled by organized labor whose support is conducive to the smooth operation of government-business cooperation...

...Public services give benefits to all, making no distinction as to whether the recipients can or cannot pay for these services, or whether they have contributed to the appropriate insurance programs...

...To appreciate this point one need only observe the Democratic party's traditional advocacy of public spending as the necessary and sufficient condition for public betterment...

...They may be particularly useful because of the essential145 ly irrelevant focus on government reorganization as the answer to the obvious deficiencies in domestic programs...

...While no state fits any of the patterns exactly (and numerous states contain elements of all three), the positive state broadly reflects American liberalism in theory and practice...

...Equally important are two new policies, environmental planning and redistribution of resources...

...In evaluating welfare-statist measures, then, it becomes necessary to consider which type of intervention is occurring, or, more bluntly, to ask the old question, who benefits...

...Sweden in some respects approximated the model of the social welfare state...

...The key to evaluating "welfare state" measures is to recognize the imprecision of the term...

...The social security state recognizes, however, that this insurance principle alone cannot suffice, and that in order to abolish poverty and provide security for all "from the cradle to the grave," supplemental measures such as family allowances and general assistance are required...

...Employee pension plans and security arrangements now disproportionately favor the well organized or well-to-do...

...The Beveridge Report, which laid the basis for Britain's post-World War II welfare programs, gave classical endorsement to such arrangements: it recommended that "the state in organizing security should not stifle incentive, opportunity, responsibility...

...There the labor movement has significantly altered the society in the direction recommended by theorists like Tawney and Wigforss...

...THESE THREE MODELS of governmental intervention are ideal types, but they correspond to important theoretical programs and actual government activities...

...Solidaristic wage policy," as developed by the Swedish trade union movement, aims to equalize pretax income by bargaining for relatively larger wage increases to lower-income workers...

...This vision and the policies associated with it signify, as the other two models do not, a broadening of the locus of power...

...Taxation of wealth and provision for broader ownership of capital, such as the Swedish Meidner Plan, attack the unequal ownership of industrial (productive) property...

...Such promiscuous use of the category suggests that efforts to formulate a single acceptable definition may be unavailing...

...Since one has to make certain minimum and periodic payments to qualify for assistance, systems of social insurance in effect institute a form of compulsory savings and provide a strong incentive to conform to a regular life of work...

...Because of its structural bias and haphazard provisions for individual security, the positive state should not, even charitably, be classified as a welfare state...

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...The main thrust of Democratic policy, devoid of any coherent conception of social purpose, remains an indiscriminate welcome for all organized interests (usually the already powerful) to feast at the public trough combined with a desperate desire to avoid a loss of "business confidence...

...These programs are designed for workers in relatively steady employment but who are subject to cyclical unemployment and incapable of accumulating sufficient assets for a decent retirement...

...What cannot be tolerated is a system built on private insurance with invidious distinctions among citizens who can and cannot afford such coverages...

...The social welfare state does not intend merely to extend benefits to the underprivileged and to raise benefits relatively over time...

...In housing, this goal entails the building of durable equities into the housing stock—the creation of public agencies to buy, build, rent, and sell housing and associated neighborhood services of a quality significantly above that which the recipients could afford on their own resources...

...Of these, employment policy is the most basic, for full employment is essential not only to stop the wastage of human talent and the various social pathologies associated with unemployment, but also to provide the resources for other public initiatives...

...We propose to distinguish among three kinds of public intervention in the operation of private property...

...Does public initiative strip capitalists of some of their traditional property rights and establish them in the hands of the public or its representatives...

...This interest puts major emphasis on social insurance programs...

...The ultimate aim is to shift decision-making power from employer to employer and (the two are not necessarily compatible) to increase citizen participation within all decision-making organizations...

...To actualize this vision requires a different policy mix from that animating the refurbished liberalism of the social security state...

...At least until recently Great Britain offered an attractive example of its accomplishments...

...In the field of "welfare," there is a disinclination to do anything inconsistent with economic efficiency...

...The Carter administration, it can safely be predicted, will not act satisfactorily in these areas...

...The goal corresponds generally to what Titmuss labels the "residual welfare model": welfare policy "is to function as a means of social control...

...Enactment of these welfare measures would move the United States close to the social security state model...

...Baldly stated, the bureaucracy is a "mess"' because the policies bureaucrats are supposed to administer are a mess...

...There is in addition an effort to bring previously underrepresented groups into the formation of economic and political policy...

...The redistribution of resources similarly involves a variety of measures...

...They fail to benefit those without steady employment...

...It pursues a "maximalist full employment" policy, preferring to provide public employment rather than to pay unemployment insurance...

...All the more reason for democratic socialists to appreciate what sorts of governmental intervention can lead to the creation of a more just and equal society, and which merely promote and entrench our present American "positive state...

...We use the term "environmental planning" in its most comprehensive sense as the regulation of property to preserve amenities, the prohibition of activities resulting in unacceptable levels of pollution, urban planning, and the development of "new towns"—in sum, an effort to inject social and collective values into a society founded, as it must be, on the good life for the individual...

...Its orientation is government-business collaboration for economic growth...

...The vision of the positive state is thus one of rugged individualism operating within the context of government promotion of balanced economic growth and protection of corporate interest...

...The difference between the vision underlying the social security and the social welfare state is evident when we juxtapose to Beveridge the argument of Ernst Wigforss, one of the leading Swedish Social Democratic theoreticians...

...In economic policy government-business collaboration becomes an expedient that at least in theory can, and should, be transcended by greater public direction of investment...

...For Wigforss, the wage-earner cannot readily agree to that view of the welfare state that is now frequently put forth, that it should secure a minimum livelihood for all, but allow whatever goes beyond this to be won through each individual's or each group's asserting itself in an unlimited competition for standards, wealth, and power...

...These programs tend to deflect potential redistribution from the rich to the poor, to noneconomic categories (the young to the old, the healthy to the sick...

...It supplements social insurance programs with a variety of measures to aid the casualties of the industrial order—the chronically sick and disabled, single-parent families with small children, workers with negligible or unneeded skills...

...And the goal of full employment is to be realized more by government and union initiatives in the labor market than by public works or simply the regulation of aggregate demand...

...Even proposals for reform are framed within its governing assumptions, as witnessed by Okun's postulate that there does exist a linear trade-off between efficiency and equality...

...These programs are founded 143 on actuarial principles (with occasional help from general revenues) and are designed to even out income over a person's "life cycle" and to spread the risk of unemployment and illness from the individual to the general population...

...It seeks not merely to produce a guaranteed minimum for its citizens, but to achieve a general equality of living conditions, The primary social policy instrument for attaining equality is the 144 substitution of public services for social insurance programs and public assistance in the provision of health care, child-rearing facilities, legal services, and the like...

...but there is equal concern that the demand for labor not be so strong as to bid up its price and extend the influence of unions...

...Policies serving primarily capitalist interests within a parliamentary regime characterize what is often referred to as the positive state, a system of corporate welfare...

...These standards can also be used to provide criteria for judging the Carter administration...

...Our objective is to introduce a different way of approaching this debate and, in the process, to suggest some criteria for judging the policies of the Carter administration...

...A public insurance program covering basic health care costs would be a second-best but acceptable solution...

...Above the assured minimum standard, liberal capitalist institutions and attitudes continue to flourish...

...The primary aim of the positive state is to protect the holders of property from the difficulties of unregulated markets and from redistributive demands...

...It borrows just enough from socialism to mandate meeting each citizen's basic ecnomic, educational, and health-care needs, but not so much that it represents anything more than a modern and noble restatement of the traditional liberal ideal...

...Progress, if it is to be meaningful, must involve fundamental policy changes that will move the United States away from the positive state model in at least the four critical areas of employment, health, income security, and living environment...

...Ideally it should be organized, like education, as a public service, possibly with modest user charges...

...The governing principle of the social security state is not equality, but equality of opportunity...

...But this does not, of course, mean that all interventionist states are alike...

...No modern, democratic state has failed entirely to address the difficulties resulting from the operations of unrestricted markets and property...

...All governments have attenuated property rights, and all have intervened in the operations of the "market...

...It is clear which value in the positive state is to take precedence...

...Harrington is indeed correct to argue that when governments intervene to promote the public good in a society dominated by private corporations, the corporations and the wealthy will normally be the prime beneficiaries...

...Quite ignored is the hardly socialist advice of such commentators as Galbraith, who as early as The Affluent Society was arguing for an expansion of the public sector that would reorient the economy toward more urgent human needs...

...in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more for himself and his family...

...The social security state, in contrast, establishes a guaranteed national minimum as a right of citizenship and thus aims to ensure economic security, educational opportunities, and access to decent health care for all citizens...

...Much remained to be done however, and documents such as the Myrdal report on Equality and the Meidner Plan did point the way to a fully developed social welfare state...

...Rather than simply concluding in dogmatic a priori fashion that welfare-statist measures cannot restructure capitalist society, these standards should be applied to determine whether social reforms introduce elements of socialism or simply reproduce capitalist society...

...In Germany alone the Federal Republic, the Third Reich, the Weimar Republic, even Bismarckian in Germany all have received this appellation...

...Progressive taxation, combined with social services directed toward the neediest sectors of the population, equalizes living standards after taxes...

...Does it favor the democratic socialist values of liberty, equality, democracy, solidarity, security, and economic efficiency...

...The assessment must depend upon the type of state under review...

...It would be difficult to discover a modern Western regime to which the label has not been applied...

...The creation of a national health service is the second most important priority...

...Anything more than modest collective efforts to provide for individual security is said to lead directly to what Arthur Okun has called the "big trade-off" between equality and efficiency...

...That spirit clearly conflicts with the ideas that both the trade union movement and social democracy seek to follow in their public labors . . . that it still shall be the labor movement's ideas of equality, cooperation, and solidarity, that shall set their stamp upon society's continuing transformation...

...Finally, the enormous social costs of private real estate development and unregulated urban and industrial expansion must be reduced...

...Social insurance has the further advantages of tying the destiny of wage-earners to the destiny of the state and of encouraging proper work habits...

...Nearly half of all firms still do not provide retirement plans and gain an economic advantage over their competitors by not doing so...

...As American regulatory commissions and welfare bureaucracies attest, not all government activity redounds to the welfare of the group purportedly served, let alone to the benefit of the general population...