Introduction to Social Policy in Capitalist History
Social Policy in Capitalist History is an inquiry into the relationship between capitalism and social policy. The book approaches social policy as a response to socioeconomic tensions and conflicts brought along by the dynamics of capitalist development and investigates the nature of this response in the way it reflects and to a certain extent shapes the characteristics of the world of work and socioeconomic life in societies integrated in the capitalist world order. A historical overview of the ideas and politics of social policy is presented in a discussion framed around the interrelated questions of ‘poverty’, ‘work and employment’, and ‘membership in society’. In this overview, the approaches to these questions in debates on social assistance, labour market regulation and provision of social security and services are examined as an area where it is possible to see a mutually constitutive relationship between the attitudes toward social policy intervention and the imaginaries of society where the terms of participation of different groups in society are approached from different perspectives. Ideas on the place of the poor and the working population in society pertain to the broader question of the terms of co-existence in society in a way to determine the ways in which membership in society is conceptualized. Not only class positions but also differences of gender, age or conditions of health and disability affect the way individuals participate in society, and they are addressed in debates where inequality is accepted or problematized.
In this book, the continuity and change in the types of social policy-related problems addressed and the way they are interpreted is examined in a long time span by tracing the origin of modern social policy back to the period of massive transformations in the early capitalist societies of Europe without the common divide between the earlier forms of poverty relief and the later measures of social insurance and social service provision. Although some forms of support to people faced with ‘social risks’ such as old age, disability, ill health or poverty could exist in all societies, what is discussed in this book is the modern social policy interventions introduced by political authorities and shaped by the conflicts and alliances between different segments of the population through the expansion of capitalist relations and the formation of labour markets. While slavery and different forms of bonded labour are integral elements of the history of the capitalist world economy, it is the problems
Social policy in capitalist history
of work, poverty and the terms of participation in society associated with the rise of ‘free labour’ which are central to the modern social policy debate. This book follows the historical history of this debate from its sixteenth-century origins to the present in today’s advanced capitalist countries and includes the approaches to social policy through structural change and socioeconomic transformation in developing countries since the post-Second World War period.
The book does not have the ambitious objective of presenting a dynamic analysis of the changing social policy interventions and institutions through centuries. It rather aims to place the ideas on social policy in the wider context of capitalist transformations where societies are affected by the commercialization of agriculture, the changes in the sectoral composition of production, technological and organizational innovations or the changing patterns of integration in the capitalist world economy. It follows the trends toward the commodification of labour and the emergence of new forms of poverty through these transformations and examines their appraisals in societies where they were taking place. These appraisals are found in policy debates and social analysis, as well as in fiction or cinema, and they constitute this book’s area of investigation of the ideas on the impact of capitalist transformations on the work and livelihoods of people which reflect different imaginations of society and social cohesion. This historically grounded investigation follows a chronological order as described by the detailed outline given below.
The idea to write this book has emerged during the health and economic crisis caused by the global COVID-19 pandemic. The pandemic has revealed a series of serious problems which have been affecting the lives and livelihoods of people throughout the world in the pre-pandemic international order. In this environment, critical debates on economic globalization1 have acquired a new relevance and, either explicitly or implicitly asked, the question whether the end of the pandemic would be followed by the return to ‘business as usual’ or the crisis could be expected to have a transformative impact on the global economy and perhaps instigate the advent of a ‘different type of capitalism’ has come on the agenda.2
Many of the problems revealed by the pandemic pertain to social policy-related issues such as the precariousness of work and income, rampant inequalities in living conditions or the inadequacies of the systems of health, education and social care. State-provided social security has acquired a crucial significance in all societies faced by these problems, and this has shed a new light on the debates around the welfare state and drawn attention to the importance of social policy intervention in developing country contexts. In this environment, in a briefing on the future of the welfare state in the post-COVID world in the Economist magazine it was stated that ‘the pandemic has forced a re-evaluation of the social contract’.3
The emergence of the post-Second World War international economic order constitutes a well-remembered example of socioeconomic and political transformations instigated by an international crisis. The collapse of the nineteenth-century market-dominated world economy after the Great Depression, the rise of fascism in Europe and the Second World War was followed by the emergence of the international economic order regulated by the institutions within the Bretton Woods system, the Keynesian welfare state and national developmentalism in the capitalist periphery. In The Great Transformation, written at the end of the war, Karl Polanyi wrote that ‘After a century of blind improvement, Man is restoring his habitation’.4
Could we expect the global crisis caused by the pandemic to instigate a similar attempt at ‘the restoration of habitation’ after four decades of socioeconomic disruptions brought along by the late twentieth-century market-dominated economic globalization and lead to the emergence of a ‘new social contract’? What could be the nature of the possible changes in the approaches to social policy in our post-pandemic future and how would these changes articulate with the political economy of the emerging capitalist order at national and international levels? These questions inform the attempt this book makes to remember the historical debates on the social policy-related problems where certain ideas continue to appear and reappear in different views on the economy and the terms of co-existence in capitalist societies.
CHALLENGE OF CAPITALIST DEVELOPMENT AND THE RESPONSE OF SOCIETY
Capitalism is a socioeconomic order which is characterized, first and foremost, by dynamic change; structures of production, patterns of employment as well as forms of political government do not remain the same through centuries. It also differs in its productive organization and in the institutional context of economic and social policy between countries as examined in the comparative literature on the ‘varieties of capitalism’ and the variations in ‘welfare regime types’. However, capitalism has a tendency to reach beyond geographical boundaries and become a ‘world system’ presenting common challenges to all societies where markets expand. As Wolfgang Streeck puts it in the preface to the second edition of Buying Time where he approaches ‘capitalism as a unity’, ‘difference and commonality are not mutually exclusive, and … depending on the problem one is seeking to understand either one or the other may be highlighted’.5 What is highlighted in the present inquiry into the place of social policy in capitalist history is the continuity and change in the approaches to the challenges capitalist development presents to societies.
In The Long Twentieth Century, Giovanni Arrighi approaches the world capitalist history by introducing the idea of ‘systemic cycles of production’ with
different organizational structures of government and business.6 According to Arrighi, these cycles alternate between ‘regulated’ and ‘unregulated’ ones in a pendulum movement as the prevailing organizational structures become constraining for the capital accumulation process at a certain stage. This particular imagination of the history of capitalism as a world system provides useful insights especially to the analysis of the change in social policy approaches from the nineteenth-century market-dominated global capitalism to the international capitalist order of the post-Second World War period and then to the ‘neoliberal’ global economy whose sustainability is now being discussed.7
However, the terms ‘regulated’ and ‘unregulated’ might not be useful since orders of production and social relations, with the changes they undergo through capitalist development, are always accompanied by some form of socioeconomic regulation. Social protection systems are part of these forms of regulation and, with the historically changing character of their objectives and instruments, they remain present in all capitalist societies.8 Systems of social protection are a part of these modes of regulation, and in their historically changing forms remain present in all capitalist societies. In each new phase of capitalism social policy intervention is shaped in response to the new challenges which affect all capitalist societies. In this book, the ideas on social policy are situated in capitalist history by insisting on ‘creative destruction’ and ‘accumulation by dispossession’ as defining features of capitalism highlighted in Marx’s writings, but the discussion is pursued beyond the boundaries of class analysis by drawing on Polanyi’s ideas on economy, society and class.
We find a succinct description of the capitalist creative description in a well-known passage from The Communist Manifesto:
The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first and condition of existence of all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation, distinguish the bourgeois epoch from all earlier ones. 9
The theme of ‘dispossession’ appears in Marx’s analysis of capital ‘as a relation’ between ‘free labour’ and the owner of means of production now separated from the producers, where Marx writes about the severance of traditional social relations and the loss of earlier forms of livelihood in the beginning of the road to the labour market:
a mass of living labour powers was … thrown onto the labour market, a mass which was free in a double sense, free from the old relations of clientship, bondage and servitude, and secondly free of all belongings and possessions, and of every objec-
tive, material form of living, free of all property; dependent on the sale of its labour capacity or on begging, vagabondage and robbery as its only source of income. It is a matter of historical record that they tried the latter first, but were driven off this road by gallows, stocks and whippings, onto the narrow path to the labour market.10
The dynamics of dispossession, whose origin is traced to the context of emerging capitalism in this quotation, has continued in the following capitalist centuries with further weakening of traditional relations of reciprocity which could provide support to those in need, albeit with inequality and subordination as their characteristic features, with independent producers turning to ‘free labour’, with technological and organizational innovations leading to the challenges to employment as well as changing the meaning of work in radical ways.
The question is whether any human society could survive without taking measures to control and check the impact of this capitalist development on people and society. This question informs the framing of this book’s discussion of social policy interventions as both reflecting the patterns of socioeconomic change brought along by the dynamics of capitalist development and attempting to modify the play of the market forces.
POLITICS OF SOCIAL POLICY WITH INSIGHTS FROM KARL POLANYI
In The Rhetoric of Reaction, Hirschman discusses three reactionary theses against purposive policy action taken to improve the socioeconomic order. The perversity thesis holds that policies implemented to remedy certain ills only serve to aggravate the problems addressed; according to the futility thesis the attempts at improvement of the existing conditions would fail to bring about any change in the desired direction; the jeopardy thesis maintains that the attempted reforms would put in danger the previously achieved objectives of economic, social or political development.11 In Hayek’s ferocious criticisms of socialist central planning and then the Keynesian welfare state, one finds these three reactionary theses in their probably most typical form. However, in different combinations and formulations, essentially similar arguments have also been used by other writers who have contested the developments in protective legislation through the history of the social policy debate. Protective legislation has been challenged with reference to the incompatibility of equality with society, the laws of the economy or the imperative of economic progress. Nevertheless, social policy intervention has continued, albeit with its objectives defined in different ways and pursued with different instruments, as an integral part of the historically changing form of the society’s response to market expansion. Measures of social protection could be introduced without
necessarily contesting the ideas on the unavoidably of inequality, laws of the economy or the requirements of economic development, but the debate has always included criticisms voiced against the socioeconomic order where the problems affecting people’s lives emerged. The views on the objectives, instruments and institutions of social policy differed and these differences shaped the environment of the politics of social policy in all periods of capitalist history.
Politics of social policy has a rich and complex history which would not be easy to examine solely with reference to economic interests of different classes. An alternative approach could benefit from Polanyi’s discussion of the nineteenth-century developments, especially from the concept of the ‘double movement’ which he introduces in his analysis of these developments. In his analysis of the nineteenth-century market economy, Polanyi insists on the uniquely powerful influence on economic policy of a particular perception of the economy as an autonomous domain separated from politics. This was an imagination of an economy disembedded from society and making it a reality required the elimination of former mechanisms of protecting the natural and human substance of society and its productive organization with the aid of a ‘commodity fiction’. As Polanyi discusses, land, labour and money, none of which are commodities produced for sale, were treated as commodities, and the attempts to control socioeconomic disruptions by checking the pace of economic progress were abandoned with a faith in market-led progress. Nevertheless, no society could tolerate the subordination of its human and natural substance and its productive organization of the society to the laws of the market, market expansion had to be countered by a protective movement. As Polanyi puts it, ‘[f]or a century the dynamics of the modern society was governed by a double movement: the market expanded continuously but this movement was met by a countermovement checking the expansion in definite directions’.12
Polanyi argues that the countermovement was wide and comprehensive and its dynamics was not limited to class action. He pursues this argument with a criticism of narrow class theory and writes that sectional interests could be a ‘vehicle’ of social and political change, but individual motives are not determined by purely economic factors. Besides, economic interests which are voiced only by those persons to whom they pertain would necessarily be less effective than the interests which have a wide constituency. He insists that in a society faced by the challenge of socioeconomic transformation, the threat is to the society as a whole and the response is shaped by the reactions that come from many different directions; class conflicts and alliances could not be understood apart from the situation from the situation of society.
Polanyi’s discussion is situated in the context of the nineteenth-century market economy which he sees as a ‘historical aberration’, a ‘stark utopia’.
Nevertheless, his analysis of the dynamics of the double movement has wider historical relevance for an investigation of the politics of social policy. In the mercantilist age of government-regulated economies, the economy was far from being conceived as an autonomous domain separated from politics. However, national wealth and economic development were important concerns, and as capitalist development proceeded the appeal to ‘the natural laws of the economy’ have become increasingly important in providing support to the commodity treatment of labour much before the nineteenth century developments discussed by Polanyi. The trends toward commodification of labour have been present through the history of capitalism. Braudel, for example, observes that the labour market was not a creation of the Industrial Revolution and writes that the idea that labour is a commodity like any other was already discussed by Hobbes.13
At the same time, the claims for the introduction of different types of social protection mechanisms against market expansion have never been absent. In sixteenth-century European cities where poverty came to be considered as a social problem, assistance to the poor was accepted as a responsibility which lay municipal authorities had to assume by considering the moral as well as the social and economic foundations of a stable society. In his impressive book on the history of poverty, Geremek writes that from the emergence of early capitalism onward ‘modern views on poverty are all united by a common thread: the conviction that the proper role and duty of the poor, the condition for which they are naturally fitted, is work’.14 However, the tendency to reduce people who are in a position to earn their living by working to ‘labour power’, which is inherent in capitalism, was accompanied by the reality of mass poverty which constituted a threat to social stability and informed the criticisms of a society where those ‘who are naturally fitted for work’ remain idle and destitute for reasons which are beyond their responsibility. The effectiveness of the measures taken to prohibit begging and to punish vagrants were questioned and they were criticized on moral grounds. In the following centuries, the co-existence of poverty and wealth, deepening inequalities or the deplorable conditions of work of large groups of people have continued to form part of the discussions on social justice in societies where capitalist progress proceeded.
The bourgeoisie, as Marx writes, continuously changes the productive process and socioeconomic relations and this presents a threat to security and social standing of large segments of the population both privileged and underprivileged. Accumulation of capital is guided by the profit motive, and the pursuit of economic interests would normally involve continued access to a supply of cheap labour and the resistance to sharing the profit income with other members of the society. However, through the history of capitalism these interests, which position the bourgeoisie against protective legislation, have required reconsideration in light of the threats to social stability presented by
poor people’s riots, working-class agitation or socialist movements and poor relief or other types of protective legislation benefitting the underprivileged had to be accepted. Arguments guided by economic interest had to be pursued with political concerns about the protection of law and order, but always with some perception of broader social objectives with reference to which the terms of co-existence in society are defined.
The imperative of economic progress could provide support to the pursuit of bourgeois interests, but would be resisted not only by the working population but also by those whose privileged status in society is threatened through capitalist transformation. The resistance to capitalist progress could be informed by imagination of society where people are bound by unequal relations of deference and protection, and hence could lead to a conservative support for the grievances and claims of the working population. Through the history of capitalism, the divide between conservatives and progressive believers in market expansion could, and often did, lead to political alliances between the former and the working people. This alliance could sometimes involve working-class support for authoritarian politics as it did in several historical episodes in the nineteenth century and after.
Polanyi writes that ‘the chances of classes in a struggle will depend on their ability to win support from outside their own membership, which again will depend upon their fulfilment of tasks set by interest wider than their own’.15 The bourgeoisie has not been exempted from this requirement to serve interests wider than its own and it has been in a situation to consider its role as the agent of economic progress in light of the impact of progress on society at large. Hence, the introduction of protective legislation could be supported also by progressive liberals.
In Polanyi’s words,
An all too narrow conception of human interest must in effect lead to a warped vision of social and political history, and no purely monetary definition of interest can leave room for the vital need for social protection, the representation of which commonly falls to the persons in charge of the general interest of the community – under modern conditions, the governments of the day. Precisely because not the economic interest, but the social interest of different cross sections of the population were threatened by the market, persons belonging to various economic strata joined forces to meet the danger.16
Politics of social policy is shaped by this vital need for social protection which political authorities in charge of the general interest of the community have to address. It might be possible to approach social policy in its ‘legitimating function’ along the lines of the Marxist structuralist theories of the state where the state is seen to be in charge of assuring the survival of the capitalist order by considering the objective of legitimation along with the requirements of
accumulation.17 This, however, would be too limiting for an overview of the debates where certain salient themes are pursued in different ways in different historical periods, shedding light on the dynamics of creative destruction and dispossession in their effects on society and people in each phase of capitalist development. It is in these debates that we find the controversies and agreements on the nature of what is legitimated and by which means it is attempted to make it compatible with the cohesion of society. Social policy interventions, in different forms, are present in all capitalist societies including those with authoritarian regimes whose ascendance is made possible largely by the failure to contain market expansion in ways which would be compatible with social cohesion without political repression.
THEMES OF THE SOCIAL POLICY DEBATE IN HISTORY
The problem of poverty and the characteristics of the world of work – and the close relationship between the two – have been central to the modern social policy debate. Poverty as the condition of people unable to live by working has always existed in all societies in different periods of history, but the importance and the nature of poverty have not been the same across societies and historical periods. Unemployment or precariousness of employment, low wages and miserable conditions of work have not affected all working people in the same way. Diversity has always been a characteristic of the working population. In Capital, Marx gives some workforce statistics which show that ‘agricultural labourers’ and the ‘servant class’ together largely outnumber the workers in manufacturing and mining with bitter comments on the large number of ‘modern domestic slaves’ in the industrial English economy.18 In the neoliberal era, we have seen the rise of new patterns of employment where independent contract work, or workers having the status of self-employed rather than employees of an enterprise, have become widespread in the ‘gig economy’ or ‘platform economy’, and introduced a new element of diversity in the world of labour.19 Apart from the difference in sectors and types of employment, the diversity of skills as well as that of gender, ethnicity or race have always been important.
This book follows the change and continuity of the ideas on the challenge capitalist expansion presents to working people and to the society without specifically addressing the questions pertaining to particular ways in which different groups of workers are affected by this challenge. Hence, immigrant labour, which is an element of the diversity of the workforce and a major contentious issue in contemporary politics and policy, does not form a separate subject in this inquiry. Instead, the movement of workers to the city from the countryside or between different regions and countries is regarded as an integral part of the
debates on poverty and social policy as well as a constituent element of labour market formation in different historical contexts. For example, Geremek writes that in sixteenth-century Europe ‘the city poor, those who lived within the walls, turn out, insofar as their origins can be documented, to be largely recent immigrants from the countryside’.20 Eric Wolf insists on labour being ‘on the move’ through the nineteenth-century developments and argues against the tendency to distinguish between ‘internal’ and ‘external’ migration by writing that the internal cultural barriers between town and country or between regions within the same polity were not different in kind from those that faced the migrants in external or intercontinental movements.21 In the twenty-first-century context of global capitalism, Çağlar and Schlick analyse the relationship between migrants and cities by approaching the migrants as part of the same dynamics of dispossession and urban development with the non-migrant population.22
Notwithstanding the diversity of people affected by the conditions of employment and work, in each phase of capitalism these conditions have been characterized by salient trends typical of the historical period which were problematized and addressed in social policy debate. The problems that were discussed, the ways in which they were interpreted and the types of remedies proposed changed through the history of social policy, but certain ideas expressed in imaginations of possible alternatives to the existing organization of production and social relations and some arguments against protective legislation, albeit in different formulations, have continued to appear in different periods. The history of social policy debate reflects both the historical dynamics of capitalist expansion in a given period and the legacy of the past ideas and policies which shape the questions raised and the way they are answered. These past ideas and policies limit the extent to which poverty can be tolerated, the laws of the economy can be invoked to justify the commodity treatment of labour, and inequality is accepted. Social policy as a response to capitalist expansion therefore comes with a potential to transform capitalism.
The discussion presented in the book draws on the studies on the early modern period and the eighteenth-century developments,23 and comparative studies on welfare state development written with a historical perspective.24 It engages with the analyses of welfare state policies by situating them in a historical context in relation to the ideas and politics of social policy intervention which have preceded and followed them in different phases of capitalist history. The section on social policy in developing country contexts covers the post-Second World War period to the present.
The discussion begins with the sixteenth-century socioeconomic transformations in both the rural and the urban economy in Europe which have changed both the character and the perceptions of work and poverty. In this period, poverty came to be perceived as a policy problem which required
measures beyond the traditional forms of private or church organized charity. The need for a ‘charity reform’ was widely recognized, lay municipal authorities appeared as actors in the provision of social assistance to the poor by using public funds; systems of poor relief emerged and developed by incorporating the objectives of providing education and work to the poor. The first chapter ‘From charity reform to the New Poor Law’ presents an overview of the continuity and change in the discussions around these developments through the age of mercantilism until the nineteenth-century market-dominated capitalist order.
Who are the ‘deserving poor’ and who is responsible for helping them by which instruments were the first questions addressed in these discussions. However, in the sixteenth century it was already clear that the traditional perception of the deserving poor as the elderly, the sick, the disabled unable to earn their living by working, was not adequate to deal with the poverty of the able-bodied masses who were losing their previous forms of livelihood and were on the move in search of work or alms. Beggars and vagrants were a nuisance and a threat to society, but the question as to whether the prohibition of begging and vagabondage was an effective or morally acceptable measure was also raised. Attempts at disciplining the poor were also accompanied by the criticisms of the ‘poverty increasing tendency’25 in the changing order. In an environment where geographic discoveries have expanded the horizon of the imaginations of society, these criticisms could incorporate quite radical ideas about property and the organization of economic and political life as in Thomas More’s Utopia or appear in social reform proposals such as those in Juan Luis Vives’s On Assistance to the Poor 26
Rising inequality could be problematized in critical observations on the transformations affecting socioeconomic life, but the ideal of equality came quite late in policy discussions. In the late seventeenth century, when Locke wrote that ‘all men by nature are equal’, he carefully qualified the statement with reference to many different types of inequality which must be accepted:
Though I have said …. That all Men by nature are equal, I cannot be supposed to understand all sorts of Equality: Age and Virtue may give Men a just Precedency; Excellence of Parts and Merit may place other above the Common Level; Birth may subject some, and Alliances or Benefits others; to pay an Observance to those whom Nature, Gratitude or other Respects may have made its due.27
All men were said to be equal in the sense that they all have an equal right to their natural freedoms without being subjected to the will and authority of other men, but the society was seen to be necessarily unequal given the differences between the individuals in it.
In Locke’s argument, although private property does not conflict with but appears as the extension of natural rights to the property in the fruit of one’s labour, it is also mentioned that the right to property is bounded by the right of all to subsistence and could not be used without regard to the obligation to act so as to serve the preservation of all mankind. With the advance of capitalism, the natural right to subsistence has begun to be overshadowed by the imperative of economic development. In the mercantilist era, the availability of a large supply of cheap labour was presented as a prerequisite of success in international trade relations and hence the wealth of the nation. The affirmation of the laws of supply and demand had increasingly introduced a sense of inevitability to the discussions on poverty and the criticism of existing poor relief systems had marked the social policy debate in the eighteenth century. However, it was also in this century that Adam Smith’s fierce criticism of the mercantilist political economy precepts came with observations on the inequality and injustice of the existing relations between workers and their employers and a perception of poverty as a threat to the vital human need of participation in society. Smith wrote that a society where the majority population is in poverty could not be a flourishing and happy one. He regarded inequality as stemming not from the individual characteristics of people, but from their position in the division of labour. According to him, division of labour forms the basis for the wealth of nations, but he also expressed concerns about its impact on the mental capabilities and social aptitudes of the working population.28
Smith was writing for a human society, but his crucial influence on the development of classical political economy could not be said to include his insights on poverty and the inequality of class relations. Through the eighteenth century the systems of poor relief continued to be challenged and in England the commodity status of labour was affirmed by the New Poor Law of 1834. However, the commodity treatment of labour continued to be contested in the context of the nineteenth-century market-dominated capitalism.
With reference to the case of England, E. P. Thompson (1978) writes that the movement from the eighteenth- to the nineteenth-century field of force has taken place with the weakening of ‘the old paternalism–deference equilibrium’ and the bonds of reciprocity in the old society.29 As will be discussed in the second chapter of this book ‘On equality, class and classical political economy precepts’, in England and elsewhere the imagination of a society held together by unequal ties of reciprocity between the privileged and the underprivileged, the rich and the poor or the worker and employer has not fully disappeared from the social policy debate. It appeared in the conservative criticisms of capitalist development, but was also implicit in the appeal to private charity or organized philanthropy often found in the economic liberal arguments against social legislation.
However, the policy environment of the nineteenth century was shaped with two revolutions in the background. With the Industrial Revolution the world of labour had gone through a massive transformation. As Thompson writes, ‘It is neither poverty or disease, but work itself which casts the blackest shadow over the years of the industrial revolution’.30 Conditions of work in industry and the dismal state of the working population was problematized not only by socialists, but also by politicians and writers in different positions on the political spectrum. With the rise of an industrial working class, the preoccupation with poverty and social assistance to the poor began to be dominated by concerns about work.
At the same time, the French Revolution, with the ideas of citizenship and citizenship rights, was an important element in the perceptions of class relations. In the French Constitution of 1793, it was stated that ‘The law knows no such thing as the status of servant: there can exist only a contract for services and compensation between the man who works and the one who employs him’. However, with the idea of equal citizenship affirmed, the necessarily unequal relations inherent in the free contract relation between the worker who has to sell their labour power to be able to survive and the capitalist employer necessarily introduced a new tension in the perception of social cohesion. ‘Natural rights of all to subsistence’ could hardly hold without a redefinition of ‘rights in society’ and this called for a reconsideration of the meaning of equality in its relationship with socioeconomic differences. The claims of the rising industrial working class were now expressed in a language of rights characterized by the complementarity of political and socioeconomic demands. The question of women’s rights would also enter the debate introducing yet another dimension to the relationship between equality and difference.
The tension between rights claims and the affirmation of the commodity status in a market-dominated capitalist order shaped an environment in which what Polanyi calls the countermovement appeared in different political manifestations. In England, a series of factory laws were introduced to limit the length of the working day and to prevent the ruthless use of child labour. The imagination of social cohesion in traditional societies informed the conservative attacks against the precepts of classical political economy, but the observations of some conservative politicians and writers on the miserable state to which the working population was reduced could be as radical as those Marx made in his analysis of capitalist exploitation. Conservatives were not always backward-looking in their perspectives on their views on alternatives to the existing labour market relations. In France, not only the utopian socialists but also Louis-Napoléon Bonaparte, the ‘lumpen emperor’ in Marx’s 18th Brumaire, explored ways of organizing production where employment would be secure and work would cease to be torture.31 In Germany, Bismarck’s social policies were strongly marked by the objective of controlling the rise of the
labour movement and socialist politics, but they ushered in a well-developed corporatist social security system at the end of the century. Social legislation advanced in different ways in countries with different histories of economic and political development, but at the beginning of the twentieth century, social policy intervention in the form of labour market regulation and the provision of social security and services was widespread in capitalist countries.
Chapter 3, ‘From the post-Second World War restoration of habitation to the crisis of restoration’, discusses the approaches to social policy in the post-Second World War period both in advanced capitalist societies and in developing countries. Both groups of countries were now situated in an international environment which had emerged after a series of major economic and political crises and where there was a widespread agreement on the necessity of political intervention to assure the functioning of the economy according to politically determined objectives. In this period, the existence of an actually existing socialist model of society was an important element in the policy environment. Systemic comparisons between capitalism and socialism were important in the discussions on the terms of co-existence in advanced capitalist class societies and on the institutions and policies of economic development in developing countries. A self-regulating economic system separated from politics no longer dominated the imaginations of society, and policy orientation proceeded in the framework of international institutions where the commodity fiction in relation to land and labour and money was not accepted.
In advanced capitalist countries, developments in social policy proceeded against the background of already introduced measures of social protection. However, the rise of the welfare state marked a significant historical turn since it incorporated the idea of social rights as an integral component of an equal citizenship regime where security of work and income were set as objectives which were not seen to be in conflict with economic growth. With equal citizenship as a central issue in the politics of social policy, social policy could be discussed in its potential to transform the capitalist class system. At the end of the nineteenth century Alfred Marshall, Keynes’s teacher, had asked whether a worker could be a gentleman and gave a positive answer to the question by carefully clarifying that he is not a socialist. After the Second World War, T. H. Marshall, one of the pioneers of the welfare state theory, would contest the distinction Alfred Marshall made between socialism and the society he had in mind when he argued for the possibility of the eradication of class-based social inequality. T. H. Marshall would write that ‘our modern system is frankly a socialist system’ where the contract relationship is being invaded by the status of equal citizenship.32 The reality of class has not disappeared in welfare societies as it has been highlighted in the narratives on the way it affects the work and life of workers despite the measures taken to assure the security of
employment and income. Nevertheless, it is also undeniable that these measures introduced a change toward a new form of capitalism.
In developing countries on the capitalist periphery, social policy development did not proceed against the background of the previous historical patterns of market expansion leading to similar disruptions in social relations as in advanced capitalist countries. The reach of markets and the dissolution of traditional socioeconomic relations was more limited. In middle-income developing countries, modern social security systems covering civil servants and formally employed workers were introduced in the twentieth century and there were labour unions which could organize the workers in the modern industrial sector. However, an important part of the population was employed in agriculture or in the urban informal sector; informal networks of solidarity and clientelistic relations between political and social actors played an important role in providing risk protection as well as economic opportunities to people. In these countries, post-war socioeconomic transformations were shaped in the policy environment of national developmentalism. Problems of poverty and inequality were not overlooked by development economists, but the policy debate was dominated by paradigms of economic growth and development rather than the contemporary approaches to social policy.
After the first three post-war decades, both the Keynesian welfare state and national developments were challenged by rising criticisms. ‘The crisis of the welfare state’ and ‘the crisis of development economics’ became dominant themes pursued in discussions in which the left-wing critiques of the sustainability of the welfare state and the pioneers of development economics participated along with the opponents of political intervention in the market mechanism. In the meantime, the late twentieth-century economic globalization has ushered in a new phase of capitalism with a renewed faith in market-led progress strengthened by the demise of the actually existing socialism.
The socioeconomic transformations in this last phase of capitalism affected both developed and developing countries. Social policy-related problems which emerged in a capitalist order where markets expanded to all areas which were previously outside the orbit of exchange relations differed in severity in higher- and lower-income countries. However, precariousness of work and income now characterized the majority of people’s lives in all countries.
The changes in the structure of employment and the organization of production were in part caused by economic and technological developments which could be regarded as exogenous factors. However, they were not independent of the policy choices made by international and national actors in conformity with the characteristics of the neoliberal mode of regulation of the new capitalist order. Instruments and institutions of social policy, too, were designed within this neoliberal frame and reflected the terms of a new social contract
where people were called upon to act as rational market agents and adapt to the insecurity-laden environment of the flexible production system. Social policy has not become less important; in fact, public social spending has increased and new instruments were introduced in developing countries. What has changed was the emergence of a new social policy outlook which has acquired hegemonic status in the post-cold war period when it was confidently affirmed that there was no alternative to capitalism. The idea of equal citizenship no longer had an important place in the approaches to social policy in international and national policy circles.
Chapter 4, ‘Social policy in a globalized economy: neoliberalism, crisis and response’, discusses these developments in the world of work and in their manifestations in the emergence of new forms of poverty. In this chapter it is also argued that in the context of this new capitalism we see the emergence of a rich body of social policy literature with important insights to the problems of work, poverty and membership in society. The problems addressed, the questions raised, and alternatives to existing socioeconomic relations proposed through the centuries of social policy debate now appear with different formulations in rigorous and policy-relevant approaches. These approaches have become all the more relevant after the health and economic crisis caused by the COVID-19 pandemic revealed the problems of the existing capitalist order and led to questions of the possibility of a different world order. In this chapter, the prospects for the future are discussed in light of the twenty-first-century context of global politics where the rise of authoritarian political trends throughout the world contrast with the optimistic post-cold war observations about the transitions to democracy in East Central Europe as well as in developing countries. In a conjuncture where the pandemic is followed by the war in Ukraine, the chapter ends with the question as to whether a new international order could emerge with different approaches to social policy as part of the attempts at ‘re-embedding’ the economy in society, or the present form of capitalism would remain in place with its political environment marked by increasingly alarming deviations from liberal democracy and the rule of law.
At this point where the future is uncertain, one could still expect that social policy debate will continue with different imaginations of society and conceptualizations of social justice, and in the debate it will be possible to recognize some of the ideas expressed through the previous capitalist centuries.
NOTES
1. Important contributions to the critical literature on economic globalization include: J. E. Stiglitz (2002), Globalization and Its Discontents, New York: W. W. Norton; J. E. Stiglitz (2017), Globalization and Its Discontents Revisited,
New York: W.W. Norton; D. Rodrik (2011), The Globalization Paradox and the Future of the World Economy, New York: W. W. Norton.
2. See, for example, the European Bank for Reconstruction and Development (EBRD) debate on ‘The Future of Capitalism Post-Covid’: https:// www .ebrd .com/ news/ events/ the -future -of -capitalism -after -the -covid19 -crisis .html (Last accessed: 14 October 2022). For discussions focusing on global inequalities and the future prospects for developing countries, see The Institute for New Economic Thinking, Report of the Commission on Global Transformation, The Pandemic and the Economic Crisis: A Global Agenda for Urgent Action, https:// www .ineteconomics.org/uploads/papers/INET-Commission-Interim-Report.pdf (Last accessed: 14 October 2022).
3. ‘Covid-19 has Transformed the Welfare State. Which Changes will Endure?’, The Economist, 6–12 March 2021. See, also, M. Mazzucato, ‘Covid Exposes Capitalism’s Flaws’, Financial Times, 28 December 2020.
4. K. Polanyi [1944] (1957), The Great Transformation: The Politics and Economic Origins of Our Time, Boston: Beacon Press, p. 249.
5. W. Streeck (2017), Buying Time: The Delayed Crisis of Democratic Capitalism, 2nd edition, London and New York: Verso, p. x.
6. G. Arrighi (1994), The Long Twentieth Century: Money, Power, and the Origins of Our Times. London and New York: Verso.
7. See, for example, S. Lash and J. Urry (1987), The End of Organized Capitalism, Madison, WI: University of Wisconsin Press.
8. In this regard, insights from Regulation Theory, where historically changing ‘regimes of capitalist accumulation’ are examined with their corresponding ‘modes of regulation’, are particularly useful. The five-volume collection of articles edited by B. Jessop presents a comprehensive panorama of the contributions to the development and applications to the analysis of capitalism of the Regulation Theory: B. Jessop, ed. (2001), Regulation Theory and the Crisis of Capitalism, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing.
9. K. Marx and F. Engels [1848] (1998), The Communist Manifesto: A Modern Edition, London and New York: Verso, p. 35.
10. K. Marx (1973), Grundrisse: Introduction to the Critique of Political Economy (translated by M. Nicolaus), notebook V, chapter on capital, New York: Vintage Books, p. 507.
11. A. O. Hirschman (1991), The Rhetoric of Reaction: Perversity, Futility, Jeopardy, Cambridge, MA and London: The Belknap Press of Harvard University Press.
12. K. Polanyi [1944] (1957), The Great Transformation: The Politics and Economic Origins of Our Time, p. 130.
13. F. Braudel (1982), Civilization and Capitalism: 15th–18th Century, Vol. 2 (Wheels of Commerce) (translated by S. Reynolds), New York: Harper and Row, pp. 51–52.
14. B. Geremek (1997), Poverty: A History (translated by A. Kolakowska), Oxford: Blackwell, p. 238.
15. K. Polanyi [1944] (1957), The Great Transformation: The Politics and Economic Origins of Our Time, p. 152.
16. Ibid., pp. 154–155.
17. Nicos Poulantzas’s work is particularly important in the development of the Marxist structuralist theory of the state: N. Poulantzas (1973), Political Power and Social Classes (translated by T. O’Hagan), London: New Left Books and
Sheed and Ward. The debate between Poulantzas and Ralph Miliband who is associated with the instrumentalist theory have marked the discussions on capitalist state in the 1970s. See, for example, R. Miliband (1973), ‘Poulantzas and the Capitalist State’, New Left Review, 82, pp. 83–92.
18. K. Marx [1887] (1974), Capital, Vol. 1 (translated by S. Moore and E. Aveling), Moscow: Progress Publishers, pp. 420–421.
19. See, for example, B. Rogers (2016), ‘Employment Rights in the Platform Economy: Getting Back to Basics’, Harvard Law and Policy Review, 10 (2), pp. 479–520; J. Woodcock and M. Graham (2020), The Gig Economy: A Critical Introduction, Cambridge, UK and Medford, MA, USA: Polity Press.
20. B. Geremek (1997), Poverty: A History, p. 109.
21. E. R. Wolf (1982), Europe and the People Without History, Berkeley and Los Angeles: University of California Press, pp. 361–363.
22. A. Çağlar and N. G. Schiller (2018), Migrants and City-Making: Dispossession, Displacement and Urban Regeneration, Durham, NC and London: Duke University Press.
23. See, especially, B. Geremek (1997), Poverty: A History; R. Jütte (1982), Poverty and Deviance in Early Modern Europe, Cambridge, UK and New York: Cambridge University Press. Among the studies on the English Poor Laws see, for example, G. R. Boyer (1990), An Economic History of the English Poor Law: 1750–1850, Cambridge, UK and New York: Cambridge University Press; P. Slack (1990), The English Poor Law: 1531–1782, Cambridge, UK and New York: Cambridge University Press; P. M. Solar (1995), ‘Poor Relief and English Economic Development before the Industrial Revolution’, Economic History Review, 48 (1), pp. 1–22.
24. Important contributions include P. Baldwin (1990), The Politics of Social Solidarity: Class Bases of the European Welfare State, 1875–1975, Cambridge, UK and New York: Cambridge University Press; A. Briggs (1961), ‘The Welfare State in Historical Perspective’, Archives Européennes de Sociologie, 2 (2), pp. 221–258; G. Esping-Andersen (1990), The Three Worlds of Welfare Capitalism, Cambridge, UK: Polity Press.
25. B. Geremek (1997), Poverty: A History, p. 102.
26. See T. More [1556] (1997), Utopia (translated from Latin by R. Robinson), Hertfordshire: Wordsworth Classics of World Literature; J. L. Vives [1526] (1999), On Assistance to the Poor (translated by S.A. Tobriner), Toronto: Toronto University Press.
27. J. Locke [1698] (1963), Two Treatises of Government, Cambridge, UK and New York: Cambridge University Press, p. 346.
28. A. Smith [1776] (1981), An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, chapter viii and Vol. 2, p. 782, Indianapolis: Liberty Classics.
29. E. P. Thompson (1978), ‘Eighteenth Century English Class: Class Struggle Without Class?’, Social History, 3 (2), pp. 133–165.
30. E. P. Thompson (1966), The Making of the English Working Class, New York: Vintage Books, p. 446.
31. K. Marx [1852] (2001), The 18th Brumaire of Louis Bonaparte, London: Electric Book Co.
32. T. H. Marshall (1965a), ‘Citizenship and Social Class’, in Essays by T. H. Marshall, pp. 71–134, New York: Anchor Books, p. 77.
1. From charity reform to the New Poor Law
Poverty, as the insufficiency of pecuniary and nonpecuniary resources necessary for the subsistence of individuals and families, has of course always existed in all periods of history. In certain periods, the problem has been exacerbated by plagues, poor harvests and famines. However, in sixteenth-century Europe it becomes possible to observe the emergence of a new type of poverty caused by factors endogenous to the socioeconomic changes within the society and leading to new perceptions of the position of the poor in society. In this period, poverty appeared as a social problem and it would remain as a policy issue in the following centuries with economic interest in the availability of cheap labour, but also with the fear of social and political instability as well as the moral uneasiness created by the co-existence of increasing wealth and the poverty of the masses. Similar themes would continue to mark the poverty debate in the seventeenth and eighteenth centuries albeit taking different forms with the advance of mercantile capitalism and the rise of critical views on the mercantilist order. This chapter follows the debate until the nineteenth century when the social policy environment acquired a new character with the developments in industry and the influence of the American and French Revolutions on sociopolitical relations.
SIXTEENTH-CENTURY RESPONSES TO ‘NEW POVERTY’
In the sixteenth century, the dynamics of ‘dispossession’ and ‘movement’ which is highlighted in Marx’s analysis of the emergence of ‘free’ labour1 could be seen in different forms and degrees of brutality in different parts of Europe. The expansion of commercial economy affected the organization of production and the former socioeconomic structures in the rural economy, pushing those people who were losing their former sources of livelihood to emigrate to cities.2 At the same time, new urban employment opportunities in the urban economy such as textiles, printing or shipyards attracted the rural poor to the cities. While the rate of urbanization had remained quite low until the eighteenth century throughout Europe, there was a growing mass of ‘free
labour’ in movement leading to an impressive growth of population in some large metropoles.
Through the sixteenth century, the impressive demographic growth was not matched by an equal increase in food production. The inflationary pressures experienced throughout Europe affected food prices most severely and led to a decline in real wages and the deterioration of the living standards of workers. As Domenico Sella has discussed, this implied a redistribution of income among different social groups, but also limited the demand for the products of industrial and handcraft sectors.3 The urban economy, while expanding, was not able to provide employment for the mass of labour power released from agriculture. Moreover, industrial production was periodically hit by crises and employment was highly unstable. In Braudel’s words, ‘The working community was forever being regrouped and moved on, driven to new centres of employment and sometimes to new trades … The truth was that the entire world of labour was caught in a vice between low wages and the threat of incurable employment’.4
Working people, faced with the ongoing change in their traditional forms of employment and livelihood, were being absorbed in the ranks of the proletariat under these circumstances. Since the possibility of absorption in the labour market was limited, work was precarious and earnings were often not above what was necessary for survival, the poor and the worker were hardly separate figures in the context of the emerging capitalism.
In his seminal history of poverty, Geremek writes that:
What distinguished the social system of the late Middle Ages and the ‘early modern era’ … was something more than simply poverty; it was a very clear poverty increasing tendency … increased poverty was part of the evolution of capitalism. … It was not merely its by-product, its social price, but one of its integral elements, for those who became impoverished were forced to seek work as hired labourers.5
It is important to note, however, that the encounters on the road to the labour market were not only those between ‘free labour’ and the capitalist employer. The peasant insurrections in Germany and Spain in the 1520s and a series of both rural and urban disturbances in England, France and the Netherlands6 created a sense of danger the poor presented to the social order. Beyond the political concerns about riot and insurrection, the increasing numbers of ‘alien poor’ in the cities threatened and disturbed urban dwellers; the fear of crime and infectious diseases was an important element of the encounters with the disposed masses in societies in transformation. The social frame of co-existence with the poor in pre-modern societies was being challenged, not without leading to moral questions about the responsibilities in the face of
human misery. Poor relief had become an important issue to be considered in a new light in this context.
Poverty as a Social Problem
Leuwen’s model of the ‘logic of charity’ presents an important contribution to the studies on poor relief in pre-industrial Europe.7 By drawing on different approaches to systems of poverty relief, Leuwen has insisted on the motives of the elites to accept to provide and of the poor to receive charity as a means used by the former to control poverty and by the latter to survive. He has presented a systematic discussion of the different concerns and interests shaping the role of poverty relief in a society where the elites and the poor were bound in a relationship of mutual interdependence of an unequal character.
However, the conception of the place of the poor in pre-modern societies, where they would enable the rich to attain salvation by giving alms, was an important aspect of what was changing through the socioeconomic transformations of the emerging capitalist societies. ‘Charity reform’8 came on the agenda with changes in ‘the logic of charity’ and introduced a set of new issues which would continue to be present in the social policy debate in the following centuries. Who is to be helped by whom and through which instruments emerged as typical social policy questions which would continue to be asked in their economic, political and moral implications through the following centuries.
The attempts to prohibit vagrancy and begging were an important part of the approaches to poverty as a social problem. Such attempts were already present before the introduction of new systems of relief came on the agenda9 and continued afterwards in conformity with the work-centred capitalist value universe where the place of the poor in society was being defined in terms of their productive work. However, criminalization of begging was also a source of tension between charity reformers and mendicant orders, and it could be seen as a challenge to the Christian ideas of compassion to the needy. The controversy was particularly intense given the rise of the Protestant movement. Luther was adamant about the poor’s obligation to work and the responsibility of the political authorities to put all able-bodied to work and to assure the bare subsistence of those not fit for productive activity so that they do not die of hunger and cold.10 He also insisted on the importance of public education for girls as well as boys.11 Being associated with these ideas, which presented a new approach to the organization and governance of social life inimical to the prerogatives of the Catholic church in setting the terms of the place of poverty in society, entailed the danger of being accused of heresy, a serious threat faced by those involved in charity reforms.
However, prominent Catholic thinkers of the period with little sympathies to the Protestant movement were also aware of the seriousness of the increasing
poverty. Erasmus and More, who was executed because of his opposition to Henry VIII’s break with the Catholic church, did not share Luther’s stern views on the poor; in general, beyond the religious controversies around justice and the attempts of the Catholic authorities to protect the church’s realm of influence, dealing with poverty was becoming a policy matter for the national and municipal authorities throughout Europe where the charity reform process was proceeding as a response to similar challenges the emerging capitalist transformations presented to societies.
In this environment, the question of the ‘deserving poor’ was being considered in a different light, beyond the traditionally accepted recipients of charity such as widows and orphans, the infirm and the elderly. The distinction between the deserving and undeserving poor was an important policy issue, and a complicated one since the able-bodied poor were no longer easy to classify as undeserving. The vagrant and the pauper could not be easily distinguished from the workers and their families in destitution because of unemployment and below subsistence earnings. Helping the poor was not limited to providing food and shelter, but also providing work. While the social policy problem at hand was poverty, it was not dissociated from the problem of employment.
At the same time, the question ‘who is responsible for the poor’ had come on the agenda. Caring for those who could not be expected to earn a living by working was also beginning to be seen among the responsibilities of lay authorities, which presented a further challenge to the traditional prerogatives of the Church. The measures being discussed included the sources of funding and the institutional mechanisms of administration, and reflected the complexity of the problem at hand, which called for a compromise between secular and religious authorities as shown by Geremek’s extensive discussion of the emerging forms of social assistance in different European cities.
In this regard, the case of the reforms introduced in Ypres is particularly significant. Like most cities in the Netherlands, Ypres was faced with a severe crisis; food shortages were aggravated by the population growth at a time when the conflict between France and the Habsburg monarchy created difficulties for wheat imports, and the earnings of most wage labourers had remained below subsistence while unemployment increased. The city’s prosperous economy, which had a large number of textile workshops and other urban crafts industries in the beginning of the century, was declining and poverty was exacerbated by famine and epidemics.
In 1525 an extensive charity reform programme was introduced and the city assumed all responsibility for organizing social assistance to the poor, including measures for extending education to the poor. In a few years, the number of poor people who benefitted from relief significantly increased and so did the reaction of Christian orders that argued that the reforms were heretical. The municipal council appealed to the theologians in Paris to resolve
the controversy. Sorbonne’s verdict was in favour of the reformers, providing that the revenues of the Church would not be affected and the mendicant orders would be exempted from the legislation against begging. In other words, the controversy was resolved with the acceptance that the times were changing and the role played by the lay authorities in dealing with poverty as a social policy problem was not objectionable from a Christian point of view, as the municipal council had argued in its appeal.12
In Paris, the power of the secular authorities on hospital management, and the funding and organization of poor relief has steadily increased since the beginning of the century and led to the creation of the Aumone Générale, an institution to oversee the assistance to the poor. The establishment of this institution was preceded by intense debates at the Paris Parliament with the participation of the merchants’ provost and the city magistrates as well as the presidents of the Parliament and the highest tax authority in the kingdom. Initially, the expelling of all ‘alien paupers’ from the city was considered. What is interesting in the way the debate proceeded is the position that the merchants’ provost has taken in the debate. Insisting that providing assistance to the poor is a Christian duty, he has argued against expelling the poor from the city and suggested, instead, that they should be put to employment with wages at the lowest level. Christian compassion was thus evoked in a way to bring the interests of the employers in the supply of cheap labour on the agenda. The perception of the poor both as ‘hands’ useful for the capitalist production process and as people who are a nuisance to society thus appeared as an important element in this early social policy debate. The policy dilemma this presented included the potential of social assistance to attract the indigent to the city, with attempts to prevent this by limiting the influx while systematically reorganizing relief to the city’s own poor with measures including the preparation of a list of different categories of poor, employment in public works of the able-bodied among them, and the introduction of a special tax for the poor.13
In Lyon an institution similar to the Aumone Générale in Paris was established in 1534 in a period of intense social unrest. In 1529, there was the popular grain rioting of the starving masses – the Grande Rebeine – but the workers’ protests, especially those of the printers’ journeymen, were also important through the century. Workers in the printing sector constituted a well-organized group whose strikes against their masters were prominent among the strike activities in sixteenth-century France.14 As well documented in the Lyon city archives and widely discussed by historians, Lyon had a considerable population of wage earners and the recurrent cycles of unemployment and the precariousness of employment was leading to the undeniable reality of poverty among workers to be considered in the reorganization of the relief system. Hence, those beneficiaries of bread and money distributed by
