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Crisis and Transformation of the British Welfare State

Author: MaChunWen
Tutor: ChiYuanJi
School: Jilin University
Course: World economy
Keywords: Britain Welfare state Keynesian Thatcherism Third Way Laurie countries Political Economics
Type: PhD thesis
Year: 2008
Downloads: 984
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1970s marked a watershed in human history and a starting point of another Great Transformation. In advanced Capitalist countries, a major change is happening in the relationship among the state, market and civil society. In the post-World War II period, in western countries, the relationship is mainly characterized as the form of the Keynesian Welfare State (KWS), so the change expresses itself in the crisis and transformation of the KWS. This thesis attempts to throw light on this change both theoretically and empirically by analyziing the crisis and transformation of the British Welfare State (BWS) from the perspective of political economy.This thesis comprises four chapers. The first chapter—the Introduction introduces the issues as well as its significance,reviews relevant literature and explain my own approach and the structure of the thesis. Chapter 2 rather thoroughly examines various kinds of theories on this topic. We are going to see that, first of all, welfare state is really a complicated phenomenon. It consists of at least four dimensions, namely, political, economic, organisational and social. Welfare state is, above all, a kind of form of state, a political fact. But it concerns with the relationship of the state, economy and society. Broadly speaking, it comprises a post-war economic and political order in advanced capitalist countries. Secondly, the development and change of welfare state has been overdetermined. The determinants include ideological, political, administrative, social and cultural factors, which reinforce each other, and work together to make the reality and the change of the welfare state. The determinants can also be divided into domestic factors and international and global ones. Thirdly, for most of the commentators,1970s marked an important turning point, for before it is the period of growth and consolidation, and after it comes its retrenchment and decline. Fourthly,although Esping-Andersen argues that“a theory that seeks to explain welfare state growth should also be able to understand its entrenchment or decline”, the factors which determine its growth may not be the same as those which determines its retrenchment. Its growth and decline may not share the same framework of explanation. Finally, it can be argued that the classic welfare state has been in crisis, this does not follow that the state should not intervene in the economy and society. The state intervention is still essential to the operation of the economy and society. In other words, it is the particular type of welfare state that is in crisis, but not welfare state in general, let alone the welfare itself. Chapter 3 examines the experiences of BWS. We follow often used pattern of periodisation to divide the development of the BWS into four periods, namely pre-classic welfare state, classic welfare state, restructured welfare state, and modern welfare state. The classic welfare state can also be called KWS. It was created in 1940s. Intellectually, it is a combination of Keynesian economics, Beveridgean social policies and the notion of claiming benefits as a kind of entitlement and social right. In practice, KWS accordingly consists of three group of government’s activities—commitment to full employment, universal social service provision and prevention and allevation of poverty. By engaging in these activities, welfare state becomes a kind of poitical-economic order in post–war capitalist countries,a social mode of intervention, a sort of relationship of the state and individuals. Despite certain modification during the 30 years from 1940s to 1970s, the basic structure remains intact.From 1970s onwards, however,under the shocks of oils price, the increasing pressures of globalization and aging population, welfare state has been in crisis. With the victory in 1979 election, Thatcher aimed for modernizing the British economy, the state and civil society, promoting radical neo-liberalism. By the end of 1980s, the landscape of BWS has changed significantly. Commitment to full employment has been dropped, the scope of universal service reduced, conditionality on benefits claiming tightened.In 1997,new labour under the leadership of Blair won election. Blair continued to carry out neoliberal projects initiated by Thatcher, meanwhile he led new labour to form a new welfare contract with the public, strived for building new welfare society around work ethic.After recent retrenchment, adjustment and reform of 30 years, the BWS has changed a lot. Whither the BWS? Various visions were made out, which mainly include regulatory state, competition state, social investment state and Schumpeteran workfare state. These new form of state were imagined based on the experience of Britain and other advanced countries, each has its own merits and rationales. In fact,these generalizations have many things in common,although with different emphasis and scope. The differences are directly associated with different definitions of welfare state. In my opinion,relatively speaking, Schumpeteran workfare state is the best alternative among those new terms, it is more comprehensive and appropriate. In other words, the BWS now is experiencing the transition from KWS to SWS.In the final chapter, we employ relevant theoretical constructs to demonstrate the process of the transition of the BWS from KWS to SWS, and discussed some related issues briefly. Firstly we argue that the practice of welfare state of 30 year in post-war Western Europe including Britain is of socialist nature. Secondly, the so called crisis of welfare state is actually of a particular kind of welfare state, i.e., classic or Keynesian welfare state, not of welfare state in general. Thirdly, crisis and transformation of welfare state imply the adjustment and redefinition of socialism as well as related notions. Fourthly, with the transition of welfare state from KWS to SWS, the roles of the state also changes. Overall,the role of the state needs changing in the following aspects. Economically, the emphasis of intervention of the state shoud move from demand to the supply side, from macro control to micro reglution,actively promotes innovation, strengthen structural or systematic competitiveness of a nation. Socially,the state should rebuild welfare system around work ethic. During the process, the state must act as a social investor, actively investing in human and social capital.

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