Comparative Politics of the Welfare State Midterm 1

American Exceptionalism

The American experience was different. Europe had a legacy of feudalism, and in order to achieve democracy they had to fight against their lords, which created a class consciousness within the working class. America never embraced the idea of the working class working against the elite. America was founded on ideas of self-determination and individuality. American exceptionalism can be used to explain the stigma surrounding welfare programs and the general 'failure' of the American Welfare State (WS) compared to other nations.

Two‐Tiered Welfare State. What are some of the political implications of it?

The two-tiered welfare state consists of the upper and the lower tiers. The tiers are compared based on three factors:
-Uniformity/Eligibility
-Generosity
-Who Benefits
The lower tiers are typically more stigmatized and politicized as those who 'don't deserve' it because they do not pay into it (the concept of deservingness).
-Having a two-tier welfare state means we have separate constituencies that require different representation which divides the classes, and the groups are divided first by policy and then additionally by race. (ex. working and middle class).

Explain in further detail the three factors that differentiate the upper vs. lower tiers of the two-tiered welfare state.

-Uniformity/Eligibility: In upper-tier programs, everyone tends to get the same benefits. More uniformity in the upper tier and less in the lower tiers.
-Generosity: How much is given.
-Who Benefits: Minorities and people of color are less represented in upper-tier welfare programs. Race and gender.

Medicare vs. Medicaid

Medicare covers patients older than 65 (or those with end-stage renal disease or ALS) and Medicaid covers those who are in significant financial need. These two programs are the closest we have to a universal healthcare system in the U.S.
(We CARE about the elderly and we AID the poor.)

Deservingness

The more generous a program, the more we tend to think its beneficiaries are deserving. If we contribute to a program, like social security, we think we deserve it because we earned it. For the lower tier, the idea is that they didn't 'deserve it'. The US prioritizes personal responsibility, the ethos of individualism in a liberal WS, and the implicit message of deservingness is that of judgement and a culture of egoism.

Policy Feedback effects

How the design of a (welfare) policy in turn affects the politics around an issue. Policy-makers vs. Policy-takers.

Tax Expenditures

Government subsidies are provided to employers and employees through tax deductions for amounts spent on health insurance and other benefits. Part of the Hidden Welfare state. This system of tax cuts benefits the wealthy because it reduces taxes on things like mortgages and health care. The largest tax expenditure in the US is employer-sponsored health care.

Hidden/Submerged Welfare State

Referring to the fact that the U.S. has a cluster of policies that operate through the tax code and these tax breaks channel benefits disproportionally to affluent citizens. We must look past social spending (the amount a country spends on Social Benefits) and look into these 'hidden' ways the Government gives out benefits.

Private Welfare State

In the US, we spend about 17 to 20% on social programs, but we subsidize a lot of private-sector welfare provision. Pensions and healthcare are big parts of the private welfare state. Getting social benefits through the employer.

What are the political consequences of the Private Welfare State?

Increased political polarization, difficulty in mobilizing support for a universal healthcare system due to fears that private benefits will be taken away, limited job mobility (due to dependency on private welfare programs such as Healthcare), and the continuing propagation of class differences.

America's Great Risk Shift, as argued by Jacob Hacker.

Argues that Americans' rights are not based on being American, but on being a worker (This idea is transcribed in Bismarckian concepts of the welfare state that form their WS around working status). Because such a substantial chunk of benefits are tied to employment status, there is no guarantee that you will have social support when something goes wrong. One of the underlying economic problems of our reliance on the private welfare state is that when things get difficult for firms, they shift it so that those 'risks' and problems are shifted onto families who are generally less able to handle those risks.

Principle of Less Eligibility

making receiving social assistance less attractive than the lowest-paying job in the labor market. Attempting to push people towards the labor market by making social assistance a last resort.
As we have seen in Adrea Campbell's account of her family's struggle with the welfare system, specifically in the Healthcare space, they had to actually give up assets to be able to qualify for certain benefits they required.

Fifty Worlds of Welfare and Andrea Campbell's argument as to why there is so much difference.

Each state has different policies and procedures about welfare. Campbell Argued that there is so much difference in the States because of the racial politics of the early American Welfare State. Southern elites and politicians opposed the idea that we would give, even very basic benefits, to low-income Americans, because they were worried this could be channeled back to black domestic and farm workers. They worried that providing income to black people in the South would undermine their class structures. At the time, Southern Senators chaired key committees, so they decided that Social Security could be federal, but not apply to farm workers, and that Social Welfare would be determined by States.

Andrea Campbell reflects on three justifications of why WS's differ and how that is a good thing. What are they?

Responsiveness: States are closer to the ground, so it is better for them to design a policy that makes sense for local-level needs.
Policy Innovation: Given a problem, there might be multiple solutions, giving states the capacity to innovate and give a sense of different options that might work better or worse than another.
Efficiency: Economic argument that highlights that at the base, businesses and individuals choose where they live, and we can get to more efficient outcomes if states design their own programs because states have incentives to attract people to where they live.

What is a typology? What are the two typologies of the welfare state that we discuss at length within the readings and lectures?

A typology is showing differences between things but pointing to the fundamental attribute that puts them into a certain group. Typology can help us think of the fundamental differences in terms of structures and benefits that they provide. The typologies we looked at were: Beveridgean vs. Bismarckian and Esping-Andersen's Three worlds of Welfare Capitalism.

Beveridgean welfare state

Benefits are given to you as a result of citizenship. Beveridge, a British man, was convinced of the social reformist idea during World War II that was universal, relied on general taxation, and a social safety net that would extend to all citizens of the nations. It was very radical in its conception but was unable to be maintained in Britain (where it had originally been convinced), however, it was able to make progress in countries like Sweden.

What were some of the main features of the Beveridge welfare model? (Think the three U's)

-Universality: Based on the idea that all citizens, irrespective of their circumstances, should have access to the benefits of the welfare state. This took advantage of the solidarity felt after the end of the war. Universality also created a large constituency that would allow for the adaption of such social policy.
-Unity: Taking care of large administration programs but also combating the "Five Giants'.
-Uniformity: Everyone is covered, and everyone gets the same benefits.

What were Beveridge's five giants, and how were they meant to be combated?

1. Want: Combated through (CT) social insurance
2. Disease: CT the creation of a national health service
3. Ignorance: CT the creation of free, public education.
4. Squalor: CT a robust system of public housing
5: Idleness: CT British full-employment policies that would commit to keeping unemployment below a certain level, and pumping money into the economy if the level got too high to balance it back out.

The British Welfare State (WS) became residual and more liberal over time. Why is that? What were some of the big contributors to the shift? Mention Peter Baldwin's argument.

-Economic Limitations: Butter-Guns trade-off. The UK was spending a lot of money on the military (both due to war and to maintain its imperialist motivations), which meant less money to spend on domestic ambitions.
-Program limitations/Competing systems (Peter Baldwin): Baldwin's insight was that Beveridge himself had been trying to reconcile two different models of Social solidarism and Liberal Individualism
-There was an ideological limit in Britain that didn't exist in places like Sweden. Tt didn't offer a rising floor that integrated the welfare state into an economic strategy.

Explain further Peter Baldwin's examination of Social Solidarism and Liberal Individualism that resulted in the breakdown/shift away from the Beveridgean system in Britain.

Beveridge wanted to give everyone the right to universal benefits (Solidarism), but he also didn't want to create too many incentives that would lead to people not wanting to work (Liberal). So programs like pensions were universal, but they were meager. The liberal idea of self-reliance that was sprinkled into the Beveridgean model resulted in a lack of money being contributed towards the programs, which led the middle class to turn to the private sector.

How did the loss of middle-class support/use of Britain's social welfare programs result in cuts made to British programs? Discuss the Swedish Middle Class.

The loss of the middle class (In Britain) meant that the social programs became susceptible to cuts. The UK and Sweden were on a similar path until the late 1950s when Sweden had been facing a crisis regarding their social systems due to transitions away from large-scale farming. The Social Democrats, in Sweden, used the WS to appeal to the middle classes so that they could garner enough support for their public systems. They created high-quality public services for the poor and the middle class alike. Losing the middle class makes WS programs very vulnerable to cuts. Sweden kept the middle class involved and invested, whereas the British lost the middle class to the private sector.

Bismarckian WS

In contrast to the British Beveridgean model, the goal for this was to politically demobilize and dampen social unrest in the wake of industrialization in 19th-century Germany (In response to the rise of socialism). The Bismarckian system didn't operate on the principle of citizenship but operated on social insurance. Your benefits reflected your working class.

Who was Bismarck?

Prussian, military man who feared democracy. He essentially created welfare programs as a way to give citizens social, but not political rights.

What is the Iron and Blood rule?

Basically, go to war. Be aggressive.

What is the Whip and the Sugar Plum?

Bismarck's response to the rise of socialism and unrest in workplaces.
The whip: negative consequences. Arresting prominent socialist leaders and taking down newspapers. Threatening the rise of socialism.
The Sugar Plum: Social insurance programs like disability, pensions, and healthcare systems for workers. He didn't do it because he thought they deserved it, but he did it to demobilize the working class and prevent social unrest.

Esping-Anderson's three welfare states

-Liberal welfare state
-Christian Democratic/Continental WS:
-Social Democratic welfare state

Liberal welfare state

Liberal/Market-Oriented Welfare State (US and other Anglo States).
-Stratification: Inequality in the market is exacerbated by the WS.
-Decommodification: Low.
-Limited, means-tested, and market-based. The risk is on the individual; stratifying

Christian Democratic/Continental WS:

Think Germany
-Stratification: Inequality between groups is maintained by the WF state
-Decommodification: Medium
-Universal but segmented, groups have rights. Risk-sharing in those groups.

Class Conflict

Part of the CDU (Christian Democratic Party/Union/State). Class conflict can be eliminated because the natural order of things is harmony, and conflict is because of bad policy. Adopted an organic view of society. It is not one where everyone is equal, instead, we need one where everyone has a role to play and each individual should be treated with respect and dignity.

Social Democratic WS

Nordic countries.
-Stratification: Less economic division.
-Decommodification: High
-Universal, individual citizen rights. Broad-risk sharing.

De-commodification

The strength of social entitlements and citizens' degree of immunization from market dependency. The extent to which an individual can support themselves independently of participation in the labor market. Central to Esping's arguments. Decommodification gives people the right to say no.

Welfare State as a Rabbit Hole

Andrea Campbell characterizes how the American WS keeps people poor. For example, in the case of her sister-in-law, she wasn't allowed to have over $3000 dollars in assets not including a house and a car. She couldn't make a certain amount of money (or her husband) or she would go over the limit of how little she was allowed to make. We have classic mean tests, income tests, and asset tests. Steep marginal tax rates when going from welfare to work: If your income goes over a line, you lose your benefits (a fiscal cliff). This traps people into being poor because they lose access to key social programs if they show motivation.

Unemployment as a structural problem

The idea that unemployment is not an individual issue, but a result of the economy and different factors such as trade or international corporations. This led to employment being addressed as a problem inherent to the system.

Social Democracy vs Liberalism

Social democracy is the belief that democratic politics can and should be used to temper market forces and make markets work for the service of people. Normative underpinning that democracy is the right thing to do. The key difference between liberalism is that liberalism is too idealistic. Social democrats have a skepticism of the market. Liberalism and Social democracy are NOT opposing forces, however. SDs thought that the market couldn't take care of problems without the help of the government, and often would provide the WS as the cushion for market problems.

Social Market Economy

A system that aims to combine the efficiency of market economies with a concern for fairness for a broad range of citizens. Social Democrats trying to change the labor market to make capitalism more egalitarian; the idea that capitalism can exist within a social democratic welfare state.

Sweden the Bumble Bee (Steinmo)

Bumblebees should be able to fly because of their big bodies and little wings, but yet they prevail. The same is considered in Sweden. The Swedish shouldn't be productive, efficient, one of the highest per capita AND take the longest vacation, be taxed at a really high rate, have the highest unionization, and heaviest taxes. Yet... they do! Sweden has high taxes and high spending, and they have a dynamic economy.

Fiscal Churning

When the government pays out a benefit to the citizen but then taxes the benefit. Essentially, everything in taxed.

Saltjösbaden

The historic compromise between labor and private industry in Sweden between 1936 and 1938, Significance:1. Unions and Private Industry can share goals (increasing productivity and employment goals) 2. Developed a symbiotic relationship (cooperation over wages and employment), 3. Government policy in Sweden (SDs saw the opportunity to state appeal to the middle class)

Democratic corporatism

Business/trade unions work together on a regular basis on things like policy. Unions are one part of the body politic and employers are the other.

Andrea Campbell's four 'tiers' of social provision in the US: the bottom tier (social assistance), the middle tier (social insurance programs), the bottom tier (private welfare system), and the 'icing on the cake tier'. Discuss each one.

The bottom tier:
The middle tier:
The Upper tier:
The 'icing on the cake tier'

What are the strengths and weaknesses of the Liberal System (The United States)?

Individualism means less support. Risk-shifting. Stigma surrounding welfare systems. Low decommodification.

What are the strengths and weaknesses of the Continental/Christian Democratic System?

Weakness: Traditional Family roles

What are the strengths and weaknesses of the Social Democratic System

Weakness: High taxes (but they benefit)

What is the economic rationale for the Welfare State? How does it benefit the economy?

Christian Democratic and Social Democratic ideals of the welfare state as a cushion for a capitalist system. Labor Market Efficiency.