ECONOMIC GLOBALIZATION AND THE CITIZENS WELFARE STATE
For Miki, Asato, and Yuki
Economic Globalization and the Citizens Welfare State
Sweden, UK, Japan, US
HIROTO TSUKADA
Yamaguchi University, Japan
First published 2002 by Ashgate Publishing
Reissued 2018 by Routledge
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Copyright Hiroto Tsukada 2002
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A Library of Congress record exists under LC control number: 2001087940
ISBN 13: 978-1-138-70285-1 (hbk)
ISBN 13: 978-1-315-20698-1 (ebk)
This book questions the condition of the Welfare State today and how we can improve it.
The Welfare State that has developed in the post World War Two era has been challenged by pro-market and economic globalization trends. How it finds its balance between market and state or market and society itself is a major question today.
Having passed the 20th century, we now face fear and hope today. The fear is that our life is still difficult to live in the contradictory affluent society. The hope is that we know it. Although plagued by the cold war, civil life in the western world might have had more hopes until the early 1970s. But since then, many things have changed, the major one probably being in the total structure and atmosphere of society. Our conception of it what a society is, and what it should be has changed in some way. And so has the structure of it, too.
We will address this problem from the Welfare State view. We have witnessed the progress of the Welfare State until the 1960s and 1970s, a halt and retrenchment since the 1980s and a somewhat reactionary trend today. The nightmare of the 1970s simultaneous inflation and depression seems to have been the first watershed. Recent acceleration of economic globalization seems to be the second. And the problem is that these recent developments in economy and politics do not seem to have ensured us of a stable and hopeful prospect for our lives today. What it has given us, even when the economy appears to be as prosperous as in the late 1990s in the UK and the US, seems to be rather the opposite: insecurity and anxiety insecurity of work, life, and even human relationships as well.
We will consider this problem from the viewpoint of the relation between market and society, and their proper balance. Market mechanism is one of the most powerful devices ever invented for human happiness. But as with fire and atomic energy, it is so powerful that it must be properly harnessed. Most of all, it should remain as a servant for human happiness, not its lord. The Welfare State has been thus devised to meet this shortcoming. The major question for a society is economic distribution and redistribution. As is observed in human history, how to harmonize distribution with the progress of productive capacity has always been the core question for any society. When it succeeds in this task, it is at peace.
The highly redistributive Welfare State had been an answer in the post-war period for a few decades. But it was cut short to recover the proper balance between distribution and economic growth, which meant directing income less toward wages and welfare and more toward profit and investment. It was argued that it was necessary to recover the proper balance between investment and consumption. Whether and how much this prescription was right needs to be given a full consideration. And how to strike a balance between these two goals today or if market mechanism cannot realize the ideal balance how much the government must still interfere is another important question.
Theoretically, a democratic society determines its policies for the benefit of the greatest happiness of the greatest number. It also has the sovereign power to regulate everyone and everything toward this goal today, with market mechanism being no exception. But how to regulate market mechanism is a most complicated and difficult question. And so the experiment continues. By regulating bargaining conditions in the market as by labour laws and by correcting the uneven distribution by the market as by social welfare provisions we continue to try to find the proper balance in a society. And we will consider this question here with a concern that the recent two decades of policy changes or the movement toward stronger market mechanism and less state intervention may have lessened rather than promoted human happiness.
The difficulty in this consideration rests in its many-sidedness. The question of the Welfare State includes almost everything in social sciences. We have to deal with the people and social structure at the same time. Each of them is itself complex. We have to deal with peoples thoughts, wills and sentiments. And we also have to address economic and political problems of society. In this sense, such an exploration as in this book is always an adventure but a challenge we cannot avoid today.
Society, economy, politics, and satisfaction will be the key words in this study.
First we will address the major question of this book and what has been argued about it ().
This book expects as its readers scholars in economics and sociology, college teachers and students, particularly those interested in the Welfare State theory and its problems today. Those who are already well acquainted with the past arguments in this theory can skip , section 1.
This book originated in my pursuit of the theme of the possibility and responsibility of market economy as a social system. Since the collapse of the socialist countries in Europe, market economy has become the major social system in the world. Thus, what it is, and what it will be, have become more important questions today. This book tries to answer them, drawing on the traditional analytical viewpoint of the Welfare State. In doing this, it adds another analytical viewpoint of three virtues in a human society: efficiency, equity, and human fellowship.
Particular thanks are due to Vic George and Peter Taylor-Gooby, who have greatly helped me study about the Welfare State. I am grateful to Susan Long, Pranab Chatteijee, Terry Hokenstad, Sang-Hoon Ahn, Peter Gundelach, Jorgen Elm Larsen, and Peter Abrahamson, who have provided me with useful ideas in discussions, and Kim Dae-Hwan, Chan Se-Jin, Hiroo Higuchi and Sook Jin Sung, who have given me useful comments on the draft. I am also grateful to my colleagues in the Faculty of Economics in Yamaguchi University, many of whom have long helped me with discussions and ideas. Lastly, I am grateful to John Rawls, who, through his book,
