Question 2- Discuss the main differences between the Liberal, Social Democratic and Conservative models of Welfare State as identified by Esping-Andersen (1990).

Introduction: In my essay I will discuss the main differences between the ‘three worlds of welfare capitalism’ as identified by Esping-Andersen (1990). They are the Liberal, Social Democratic and Conservative/Corporatist Welfare States. I will discuss how they differ in terms of decommodification and destratification. I will make reference to the U.S as a Liberal Welfare State, Sweden and the Netherlands as Social Democratic Welfare States and Germany as a Corporatist Welfare State. In my conclusion I will argue why I believe the Social Democratic Model to be the best way forward. To start, I feel it is necessary to briefly discuss three key concepts that are an integral part to understanding each world of welfare. They are:

• Ideal types
• Decommodification
• Destratification

Ideal types: In using countries to exemplify the different Welfare States, it should be noted that these are ideal types. Ideal types have been described as categorization based on broad characteristics, which may or may not be present all of the time (Abercrombie et al 2006). In simpler terms the U.S is viewed as a Liberal Welfare State based on characteristics that embody this Welfare State, such as: promoting individualism and favouring the free market (Considine and Dukelow 2009, p.126). This is not to say that the U.S has all these characteristics or that it doesn’t have elements of the Social Democratic and/or Corporatist Welfare State. This should be taken into account when analysing each Welfare State to maintain objectivity.

Decommodification: Huo et al (2008, p.5) describe decommodification as the fulcrum of the Welfare State, which may be “defined as exit from the labour market with little or no loss of income”. Based around this concept, Esping-Andersen created “three individual decommodification indexes (pensions, unemployment and sickness)” (Bambra 2006, p.74), in which to contrast how effective/ineffective the three Welfare State regimes were in allowing individuals, or families the option to partake or withdraw from the labour market (Huo et al 2008, p.7). It will later be discussed how each Welfare State regime fares in terms of being decommodifying-thus moving on from the view of seeing people as just capitalist workers there to be exploited, to seeing them as social beings, who can be impacted upon by the market and inadvertently by the state and its policies.

Destratification: Focuses on whether the differing Welfare States maintain or challenge the existing social stratification order (Bambra 2006, p.74). It can be best described by asking does the Welfare State seek to uphold the ‘status quo’ (things as they are) or challenge it? It should be analysed by looking at the “relative roles of the state, the family and the market in welfare provision” (Ibid.). An example of destratification would be where the Social Democratic Welfare State tackles the low level of participation by women in the labour market by providing child care facilities, which helps to remove this barrier, thus ensuring more women have the right and/or choice to work. This concept is also linked to decommodification and it no doubt had and has influenced the decommodification indexes already discussed. The role of the three Welfare State regimes in destratification will also be discussed in the main body of my essay. I will now begin by discussing the Liberal Welfare State and how it relates to decommodification and destratification.

Liberal: The Liberal Welfare State is noted for its focus on individualism, the free market and a limited role for the state (Arts and Gelissen 2002, p.141). Individualism is seen as promoting self-responsibility and liberals argue that individuals will perform best in a free market economy. Thus they deny and are opposed to social rights and state intervention, unless it is vital (Considine and Dukelow 2009, p.123). With such an emphasis on individuals and the free market one could and should argue about the state diminishing its role in favour of an ‘equal’ world which it knows doesn’t exist under capitalism.

Headey et al (1997, p.332) apply the historical perspective of the sociological imagination when they draw upon the distinctions that the Liberal Welfare State makes between the ‘deserving poor’, “who due to age, disability or family circumstances, could not be expected to earn an adequate living in the labour market” and the ‘undeserving poor’, who receive lower entitlements, which may be means-tested to encourage them to work, i.e. stay within the capitalist system. They argue that the Liberal approach to welfare seeks to provide a “decent minimum standard of living for households unable to generate adequate income in the labour market”. Surely such an approach only keeps households just above the poverty line and makes no attempt to eradicate long term poverty. Even when benefits are made universal to all who meet the strict criteria, it is argued that these benefits are set at low flat rates in an attempt to mask ‘abject poverty’ (Ibid.). Thus, I am led to believe that liberalism does nothing to eradicate poverty and inequality, on the contrary-it creates it.

The Liberal welfare approach preaches a false concept of dependency, where payments are considered enough to keep people dependent and removes the incentive to work (Considine and Dukelow 2009, p.204). However, this idea has been discredited by “studies examining the employment effects of different decommodifying policies” (Huo et al 2008, p.6). If there is such a high rate of unemployment, it is common sense to know that people are losing their jobs faster than they are being taken on, thus this view is not applicable and I curtail this stance. I would argue against this viewpoint and it is my belief that this is just an attempt to undermine and restrict the impact and advantages that the Social Democratic Welfare State model holds over Liberal ideology.

Headey et al (1997, pp.329-359) in their comparative study on how the three models of welfare capitalism contrast in terms of poverty, inequality and the redistributive impact of governments, concluded that, based on one and five year comparisons, the U.S Liberal welfare regime “works least well along all those dimensions in the short term works little better in the longer term”. It is no surprise then to hear that Liberal Welfare States demonstrate a low level of decommodification and destratification because their welfare provision is strictly tied to market regulation, more so than government intervention (Considine and Dukelow 2009, p.154). It is thus harder to escape the market without losing income and putting yourself in the poverty line or below. Clearly these states are ineffective in addressing inequality, poverty and in challenging meritocracy –an equal chance based on individual effort (Ibid., p.289).

Corporatist: The Corporatist Welfare State shows some similarities and differences to the Liberal Welfare State. The basic idea that encapsulates this welfare system is the policy to ‘unburden’ the state (Offe 1996, p.69). This links in with the limited role of the Liberal Welfare State in welfare provision. People at risk of poverty are expected to rely on family, friends, the church or any other social network before seeking state aid (Headey et al 1997, p.332). In contrast with some liberal states, the corporatist state in Germany legislates for social insurance, continuity of income at “something close to the level of the breadwinner’s normal labour income” (Ibid.). It is perhaps a little more generous than the Liberal welfare system, but in terms of challenging the existing social order (destratification) it fails in this regard.

German social stratification is based on broad occupational categories; they are “Beamte (tenured civil servants), Angestellte (salaried employees) and Arbeiter (workers)” (Ibid.). The state helps prepare people for work through various schemes including; training programs, education and apprenticeships, but it cannot guarantee the right to work, even through subsidised work as seen in social democratic welfare states (Ibid.). Unlike the liberal welfare model, the Corporatist Welfare State discourages married women from working in the labour market. This is based on the traditional values of family and the influence or intrusion of the Christian Church into other aspects of life (Bambra 2006, p.142).

Unlike the Liberal Welfare State, Corporatist Welfare States do not reject the welfare state ideology, but they are ‘sceptical’ of the welfare state because of fears it could potentially damage core values and the role of the family (Considine and Dukelow 2009, p.128). Despite the role of the family being paramount than that of the market or state, which is the opposite for Liberal Welfare States, Corporatist Welfare States like Germany are “much more redistributive over five years than would ordinarily be expected” (Headey et al 1997, p.331). Likewise, their main aim is not directly to reduce poverty and income inequality, but to establish the upkeep of the dominant social order (Ibid., pp.332-333).

The Corporatist Welfare State greatly reduces poverty over time and surprisingly it nearly achieves as much income equality as the Netherland’s social democratic regime (Ibid., p.354). The German Corporate Welfare State demonstrates a greater level of decommodification than the U.S Liberal model despite its low level of destratification as I have detailed. It is easier to drop out of the market in these states without losing income and with more people being transferred out of poverty than in the U.S you have a greater chance of staying above the poverty threshold (Ibid.). The argument about Corporatist Welfare States being more beneficial than Liberal Welfare States has been profoundly passed. The Corporatist model has been proven to tackle poverty and redress inequality more so than the Liberal Welfare State, despite this not being their objective.

Social Democratic: The Social democratic Welfare State is best depicted by Sweden and to a lesser extent the Netherlands-because of its Corporatist past. The main characteristic which separates this model from the others is ‘Universalism’-this concept embodies that benefits should be universal-available to all, independent of their circumstances as a social right (Gilbert 2002, pp.135-136). This comes into conflict with both the Corporatist welfare regime, to a lesser extent and the Liberal welfare regime which advocates selectivity and dependency or need (Ibid.).

Social Democratic welfare regimes also recognise the importance of social rights in advocating equality and in striving for social justice (Considine and Dukelow 2009, p.137). Again this brings it into confrontation with the Liberal Welfare State and the Corporate State, who advocate responsibility and obligations before social rights and/or in order to achieve these rights. Furthermore it recognises the need for state intervention in addressing the inequality generated by capitalism and the provision of comprehensive services (Ibid.). It sees the family as having a marginal role, as does the Liberal welfare regime. It also agrees with the Corporatist welfare model, in terms of the market having a marginal role. However the labour market regulation in Social Democratic states-such as Sweden and the Netherlands is at an unprecedented scale. “Taxes, benefits, encouragement of reduced differentials in occupational earnings (‘wage solidarity’) and active labour market programs (job retraining and subsidised jobs for those who might otherwise be unemployed) are all used to promote income equality and a standard of living for all citizens” (Headey et al 1997, p.333).

It is clear that equality is the central goal of Social Democratic welfare regimes. Earlier I addressed how corporate labour market policies allowed for training programs and education, but did not advance to the right to work (Headey et al 1997, p.332). This right is copper fastened by a people’s social welfare policy. I will explain this statement in my conclusion. In total disparity to the Liberal and Corporatist ideology underpinning their respective welfare states, Social Democratic Welfare States see the individual as the ‘intended beneficiary’ (Ibid.). Women are actively encouraged to enter the labour market, both because the welfare state needs full employment and huge taxes to maintain the universal provision of services, and because it seeks to counter the Liberal ‘male breadwinners model’ (Ibid.)

In comparison to Liberal and Corporatist Welfare States, poverty spells have a short lifespan in the Netherlands because the state intervenes to prevent ‘social exclusion’-benefits are universal and at a high level in parity to those in Liberal welfare regimes (Ibid.).

One thing is for sure-“The social democratic (Dutch) welfare regime transfers more people out of poverty, shortens their poverty spells and reduces recurrence of poverty much more over five years than one” (Ibid.). This is the kind of welfare state that I would like to live in.

Conclusion: It comes as no surprise to find that Social Democratic Welfare States, such as those in Sweden and the Netherlands have one of the most generous and highly developed systems in the world (Gould 1996, p.91). As I have already mentioned, these states also are most effective in combating extreme poverty and in terms of decommodification and destratification they are the undisputed champions. It therefore allows a huge degree of immunity and offers protection to workers-it protects their work from being viewed as just a commodity and if they had to fall outside the system of labour they would be well protected (Gilbert 2002, p.19).

While the Social Democratic Welfare State is not without its faults, namely high taxes and high market regulation (red tape), it is still a hugely effective model in fostering equality. Critics will indefinitely argue against how it has become a burden on the economy and how the rising costs of welfare destroy “growth potential and competiveness”. While this may be partially true, it should be noted that by alleviating poverty you not only help citizens to improve their standard of living, you help the unborn generation have an equal start in life. If you are proactive rather than reactive and you take on the cause before it becomes a problem then you will save the state a fortune than if you let the problem (poverty or inequality) foster and spiral out of control for a few years and then decide to solve it. It makes practical sense, yet the Liberal and Corporatist Welfare States forget that people aren’t just collateral or a commodity, they are social beings too. Maybe if they used the sociological imagination and perspective a little more often then they too could see their own shortcomings.

When I said that the Social Democratic Welfare State was a people’s welfare state, I was referring to (Marshall, cited in Haynes 2010, p.232) which describes ‘The citizenship approach’. This approach describes three distinct rights: Civil, Political and Social. Civil rights include: “freedom of speech, the right to own property”, political rights include: “the right to participate in the exercise of political power” and Social rights include: the whole range from the right to a modicum of economic welfare and security…to live the life of a civilised being according to the standards prevailing in the society”. I feel that these rights are guaranteed under the social democratic model and personally it incorporates these rights better than the liberal and corporatist regimes. For me, a universal, democratic and equal society is the greatest success of the 20th and 21st century. I would sacrifice high taxes, and market regulations just to be a part of it.

It needs to be noted that Headey et al (1997, p.331) carried out their research based on the period 1885-89. While critics will try to defeat this research on the basis it is irrelevant, there is no such evidence to counter their research. By relative means I believe their research is still young, 20 years is such a small time period by all acounts. It must also be made known that they intend to cover a ten year period stretching from 1985-94 (Ibid., p.355). Only then can we see if the ‘three worlds of welfare capitalism’ identified by Esping-Andersen (1990) have learnt from their past failings.

In drawing my argument for the Social Democratic Welfare State to a close, I have demonstrated the main differences between the Liberal, Corporatist and Social Democratic model of welfare. I have addressed the question posed, with reference to the relevant literature and by using the main sociological tools-the sociological imagination and the sociological perspective. I have also used examples where necessary to strengthen my argument. While I did not go into detail on individual welfare regime policies, such as workfare, etc. I felt this was necessary to remain impartial and objective. I also showed my ability to be critical and my understanding of key concepts throughout. I hope that you have found my argument informative, argumentative and enjoyable.

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