SOCIAL POLICY MODEL WHAT IS THE DIFFERENCE BETWEEN A SOCIAL DEMOCRATIC POLICY AND A LIBERAL AND CONSERVATIVE SOCIAL POLICY
Prof. Mirosław Księżopolski, PhD
Warsaw 26.04.2012
In the year 1999 the Danish social politician Peter Abrahamson published an article entitled The Welfare Modelling Business. As the name suggests, it contained the “modelling business” term. Abrahamson pointed out certain changes in research trends of the last decade, describing a rapidly growing interest in creating social policy typologies and differentiating between various models. Before that, there was what one might call the first generation of creating social policy models. In 1990 Esping Andersen published his typology of three welfare state regimes. This started a heated debate regarding this typology and brought about the creation of a number of other typologies. When Abrahamson announced the formation of a third branch of industry, he surely could not predict that in the third generation of modelling—which we have now—it is quantitative studies that are dominant. The current generation is mostly interested in calculations and creating various databases. This is why we have lots of data for comparison, as well as new reference points and research techniques. There surely exists a number of typologies I am unfamilliar with, especially if we include quantitative typologies. The set of models I am about to present is only a certain example, as there is a truly huge number of social model typologies at our disposal. I will try to focus on those typologies which contain certain strategies of dealing with social problems or providing for the fundamental needs of humans. Most of them have been listed by Esping Andersen, but there are also other ones. It will be easier for us to understand the specifics of a social democratic strategy of solving social problems if we juxtapose them with other strategies functioning in the developed world. This is because the models I am speaking of are limited to highly-developed countries. There are attempts at modelling or creating social policy typologies in other states, but the social policy in those countries has to fully develop before we can speak of typologies themselves. It all began quite a long time ago, in the 60s. Two American scientists, Harold Wilensky and Charles Lebeaux studied the social policy of the United States of America. At first, they were not interested in creating a comparative typology. They started with a thesis which assumed that at a certain point in time the social policy in the States was conducted according to the so-called residual concept. This concept was based around the idea that the state can become involved in social policy through various programmes only if the normal methods, typical of the market economy, fail. These methods included the proper functioning of the citizen on the market and perhaps occasional support from their family. If these approved methods fail, the state is allowed to intervene. There is no real need for social policy in this model. Wilensky and Lebeaux claimed that all industrialised countries, including the States, will sooner or later turn to a social policy representing the institutional concept. This meant, that at a certain point in their socio-economic development, a developed social policy will be crucial for these states. This thesis was related to the idea of social policy convergence or to technological determinism. The more industrialised the country, the greater the need to conduct a social policy based on the institutional concept. Time showed that Wilensky and Lebeaux's hypothesis was false, but they both decided that it is possible to compare the social policy concepts they studied with other ones functioning in other countries. Richard Titmuss, a social policy professor from Great Britain, was quite fond of Wilensky and Lebeaux's concept. However, he decided that something was missing, that it lacked an intermediate stage. That is why he suggested three social policy models. The first one was the marginal model, basically identical to the residual concept, in which social policy is an emergency element of the state's involvement in social matters, one considered in little need. The second model is the achievement-performance model or the handmaiden model, according to which social policy should be subject to the economic system. The third model, referred to by Titmuss as the institutional redistributive model, is similar to Wilensky and Lebeaux's institutional concept. I will talk more of this concept
when describing Esping Andersen's concept in detail, as both of them encompass similar social policy strategies, but with other differentiation criteria. Next was the typology formulated by two American scientists, Timothy Tilton and Norman Furniss. It is currently functioning in the United States. It would seem that the scientific market is currently a global market, and yet despite of this typology being mentioned all the time in the States, I have never seen references to it in any European text; it is completely unknown here. Tilton and Furniss approach the issue of social policy differently from their predecessors. They write of a positive state, in which social policy should be subject to the interests of capital holders, who, through social policy, wish to protect themselves from certain potential demands by workers. The Bonapartean social policy often raised in Europe was also based around the idea of pacifying the working class or the general populace of a given state, as to eradicate any ideas of change from their minds. This is referred to as a positive state by Tilton and Furniss. Secondly, they described the minimum security state. Public authorities should guarantee the fulfilment of the citizens' elementary needs. Everything in this concept is governed by the market. The third concept is that of social welfare. Our goal here is not only to provide for the basic needs of citizens, but also to remove inequalities in the living conditions of people throughout their entire lives. There has not been a lot of such concepts at the time, but the year 1990 was a breakthrough. This was when Esping Andersen—described in Peter Abrahamson's biographical note as a Dane whose mother was a Swede and who studied in the United States and is currently working in Italy—proposed his own social policy typology. Firstly, he replaced the term “model” with “regime.” Thus, he described three welfare state regimes: the liberal one, the conservative-corporate one and the social democratic one. It is worth noting that his typology has a very solid empirical basis. The differentiation criteria used by Andersen included the decommodification index, where decommodification stands for the citizens' independence from the market when it comes to fulfilling their needs. Andersen focused on how successful a given policy is in freeing the citizen of a given country from the need to be professionally active in order to fulfil their basic needs. Although decommodification is an important phenomena for the social democratic model, the other criterion, stratification, is even more important. Stratification determines the level of influence of social policy on changes in social structures, as well as the instruments used to achieve these changes. The third criterion has to do with the state's market in pension insurance, but decommodification and stratification are the main criteria. Esping Andersen's model became a source of great interest and still remains the main social policy typology to this day. Allow me to mention some critical elements, formulated against this typology—even though it is still considered to be a starting point in the field, regardless of the criticisms. Andersen's success in presenting a very clear-cut division of social policy types is often stressed when discussing the social democratic social policy strategy. Andersen was the first to do it, as the previous classifications included only a number of states, while Andersen studied at least 18 most important developed countries. Andersen also attempted at empirically justifying his distribution of each country to respective typologies. The social democratic policy model involved mainly Scandinavian countries, as well as Austria, the Netherlands and Belgium. Many believe that these three countries should rather fall under the conservative-corporate model category. There is no questioning the choice of Scandinavian countries, though Finland and Denmark often appear in a slightly altered configuration. Still, Sweden and Norway fit the social democratic model perfectly in all typologies. I treat Titmuss' and Andersen's strategies equally, since I believe they determine certain mutual strategies of solving social problems and fulfilling needs. Let us start with the first strategy, referred to by Titmuss as the marginal strategy and by Andersen as the liberal strategy. It is based around the idea that it is the citizen who is responsible for the
situation they find themselves in, i.e. for repeating or solving social problems. The citizen can be supported by their family or charity organisations, but the general idea is that they are responsible for themselves and their fate. This is why the state can intervene through social policy only if the citizen is incapable of functioning on the market and if the support of their family and charity organisations is not there. The state's social policy should be the source of expedient help, thus, the government does not need to create programmes encompassing broader methods of support. The less social policy the better. The economic policy is the best kind of social policy. Social policy as such is useless since most citizens will manage on the market. What is more, social policy is actually considered harmful in this model, since it makes people get used to passive waiting for the state's help and encourages them to work inefficiently or not work at all. Additionally, the funds for social policy decrease the pool of resources for production investments. This last claim is especially criticised and opposed by the social democrats. I would venture to say that Andersen himself is a sort of social democrat, or at least he was when he began his research. Andersen was working with another scientist by the name of Walter Korpi. When he was working on his typology he used data from the Swedish Social Studies Institute. Walter Korpi writes a lot about how social policy does not harm the economy. Advocates of the liberal model, however, are convinced that social policy funds limit resources for production investments. There are also other theories, like Arthur Okun's leaky bucket theory. Okun claims that if we collect money from citizens or entrepreneurs through taxes and insurance premiums they end up in a bucket. We later use the money from the bucket for social benefits, often for those who covered the premiums. But the bucket is leaky, so in the meantime, until we provide the benefits, a large part of the money is wasted in different ways. We thus take a sum of resources from the economy and return only a small part of it. Those unnecessary losses also include funds used for social policy costs. The liberal strategy makes use of selective benefits, for those who fit into respective income categories or property size categories, assessed through a so-called means-test. This involves social workers visiting the house of a given citizen and listing all their property. They check their closet, identify the TV set used in the house etc. If you have a plasma TV, you get no benefits. If it is an old black and white TV—though there are probably none of them left today—the chances to receive a benefit increase. Thus, support is available only to those who fit into a certain category, e.g. families living in poverty. One must keep in mind that these categories are usually very strict in the liberal model, which means one would have to live in extreme poverty to receive any welfare benefits. Private insurance and private services play a major role in this model. The idea is that the citizens should pay for their insurance premiums themselves. Their employers might help them, the state can mobilise them through e.g. introducing tax relief for those who have some money stored away on their pension fund account. But that is all the support one can receive. The state, especially in the unaltered form of the liberal model, should not introduce any sort of obligatory insurance, as the citizens should have voluntary access to their insurance. That is why the citizen is to blame if they fail in taking necessary action. But they are also satisfied if they succeed. On the other hand, the citizen should earn enough by working on the market, to buy all sorts of services available on the same market. Instead of waiting for public services, the citizen can fulfil their needs using private services, which are of much higher quality, especially when it comes to health care. The second strategy is the conservative-corporate strategy. The approach here also involves the citizen being responsible for their living conditions. The more they earn through their work, the more needs they can fulfil. The difference is that here we do not trust the citizen as much as we do in the liberal model. The liberal model considers individual freedom to be the most important value of all. We have to let the citizen do whatever they want, even if they make grave mistakes. In the second model—and this is
rarely covered in subject literature—we decide that we cannot trust the citizen, and thus there is sure to be a certain percentage of citizens who, by making use of their freedom, will fail to gather the required amount of money through a pension fund and will eventually turn to the government for help. The state should use social policy to create certain obligatory programmes, especially regarding insurance. We force the citizens to pay premiums in case of future social risks. Why is this model referred to as the handmaiden model? That is because we clearly assume that human needs should be provided for based on the level of seniority, achievements and work efficiency. This is what makes this model so different from the social democratic one. The conservative model aims at petrifying the existing social divisions through social policy. We wish to maintain the divisions which have emerged in the process of labour, by guarding the current shape of the social structure through social policy. Benefits and insurance are to reflect the status of a given citizen which they acquire on the market. They should thus be different, depending on the way one works, their efficiency, income etc. All the citizens who do not work can receive benefits, just like in the liberal model, but the benefits are very low and pertain to people living in poverty, who failed on the market. Social policy is supposed to motivate all citizens to professional activity, since that is the only way to improve their living standards in case of an economic threat. Andersen also points out the role of the family. In the conservative-corporate strategy we encounter a quite conservative approach to the family. The family is responsible for fulfilling the needs of its members. In the unaltered version of the conservative model the family is based around a single provider. The idea of professional activity among women is tolerated, though women are preferred to occupy themselves mainly with taking care of the household, bringing up children or providing care services for the disabled or the elderly in the family. Quite often the conservatives claim that it would be best for us to return to “the good old ways,” when care and protection was guaranteed in the family. Women should thus do all the things they have been doing 50 or 100 years ago. Right now, women entered the labour market, which is why we need to create alternative forms of fulfilling the needs of family members. Perhaps I am simplifying things a bit, but I would like to stress some of the things being said here. This is something you will not find in the literature on the subject. Political correctness is required everywhere, which is why no one will be this frank about these things. The family model is changing so rapidly that the ability for women to take care of the household is much more limited today than it was in the past. Still, I was very surprised when I first discovered certain statistics regarding the professional activity of women. It turns out that in the Netherlands, when compared to other countries, they were very low. I asked some of my colleagues, but they did not pay any attention to this. There was this tradition in the Netherlands in the beginning of the 70s, that women resigned from their jobs after getting married. This was certainly the case with women who gave birth to children. This is where the conservative tendency comes from: when women start families they should disappear from the labour market. Currently the indicator of professional activity in the Netherlands is one of the highest in the world—it seems something has changed. But women still do not work full-time, the majority works part-time only. Most professionally active women are also managing their households. They wish to be on the market but also wish to take care of family-related responsibilities. The professional activity among women in Germany is increasing due to part-time employment. The social democratic model brings household responsibilities and professional activity together in a different manner. Perhaps the conservative model offers a better solution—at least that is what women in the Netherlands seem to believe. Let us move to the social democratic model. One has to be aware that this model involves completely different assumptions than the other ones. Firstly, society, not the citizens themselves, is responsible for social problems and for solving them. The citizen
can help solve certain problems, but it is the society and socio-economic system in which the citizens live that determines his situation. The system itself is the source of the social problems of each citizen. Whether the citizen is capable of fulfilling fundamental needs is also dependant on the system. We thus stress social responsibility. If society is responsible for the emergence of social problems, it should also create a system which will help provide for the needs of citizens and alleviate social problems. Secondly, this model offers a different approach to the market. In the liberal model the market is considered to be the best and most just distribution mechanism. It is far more justified than any other solution offered by the public authorities, since these do not reflect the actual commitment and effort of each citizen in the fulfilment of their needs. The market rewards work and is a much more fair mechanism of distribution than anything the state can come up with through social policy. Social democrats disagree with this. They believe that a significant number of citizens will fail on the market. That is why it is crucial that the state intervenes. In the liberal model social policy is supposed to complement the market. In the social democratic model it should completely replace the market in the process of fulfilling the needs of the citizens. It should address this problem based on the criteria of need. Thus, we help all those who have found themselves in a difficult situation. Lonely mothers is an example of such a group of citizens. In the liberal model we only help those families or lonely mothers who cannot manage things on their own and have no money to support themselves. We do not care about all families or all lonely mothers since we are convinced that most of them will do quite well on their own. In the conservative-corporate model, the family's rights to social support depend on whether there are people working in the family or whether there are people within the family who are insured. When I was young I had to present written proof that I am a student so that my parents could receive family benefits. They worked, so they were entitled to it. They would receive no money had they been unemployed. As for the social democratic model, we decide that it is the need that is most important, which is why we provide benefits for each family with children, as every family in which there is a child has the need to ensure it enough resources to raise it and bring it up. In the liberal model we only help poor families, while in the conservative model only insured one, i.e. whose members are employed. This still applies in Poland—my daughter's name is in my insurance policy booklet which allows her to have access to free treatment. If I did not have a job, she would not be entitled to that. It is the same with a woman who does not work—she is not entitled to free insurance or medical treatment. In order to change that she has to show a certificate validated at her husband's workplace. In the social democratic model we assume that each family has certain needs, which is why every child or every woman, even one who is unemployed but who is functioning within a family, has the right to given benefits and services. It is not because she is poor or because she or her husband is working, but because she is a citizen. The social democratic model represents a completely different vision of being entitled to receiving support. This is related to simply being the citizen or—in some cases—the resident of a given country. This enables the person to receive certain funds or services. At the same time, the social democratic system is also fostering income redistribution. In the liberal model the fact that one person earns large sums of money while another earns very small sums of money is considered fair, since this difference has to do with their efficiency. In the social democratic model we are convinced that disproportions in income and other sorts of inequalities should be alleviated and reduced through social policy. Let us take Esping Andersen's stratification criteria. The proponents of the liberal model believe that the state should not interfere under no circumstances. “From rags to riches” is the motto here. The citizen can change their place in the social structure through their own actions, depending on their efficiency. In the conservative model we petrify the current social structure and help proportionally to the status of a given
citizen in the social structure. The higher their status, the greater the help. The social democratic model aims at changing social structures. The effect might not be the same as social democrats expect it to be, but the intention is to alter structures. Thus, society is more just if there is greater equality and less social disproportions, than in the case of a model which fully reflects the social divisions established on the market. These are the basic differences between these models. Though Esping Andersen is commonly praised, he is also a favourite subject of criticism. The number of quotes from Esping Andersen is the highest of all social researchers. He is quoted both by those who view his division in a positive light, as well as those who are very critical of it. There is a number of critical approaches. The one which is most important when we talk about a social democratic model considers the three-fold division proposed by Andersen inaccurate, as it lacks a number of other models. The models which are said to be lacking include the Southern European model which is basically identical to the conservative strategy, with more stress put on the family, especially when it comes to the principle of subsidiarity. The state should in no way replace the family, the basic local community structures, as well as work-related or religious structures, in providing for fundamental needs. The Mediterranean, Southern European model is considered to be an immature version of the conservative model. The soft state concept is considered important here. The state is not able to realise its tasks, while interest groups and political parties, especially on the local level, can make decisions regarding practically everything. Clientelism is often the case. One can receive social benefits by supporting a certain political party. Please imagine what would happen in Poland if this was the case. It is popular in southern countries, such as Italy. Another feature of this model is a non-uniform social policy system. This means very generous benefits for some—especially for those who are employed full-term—and very high retirement benefits. Take the replacement rate in Greece for example. Pension benefits equal almost 100% there and the Greeks are defending them with all their might. At the same time there are very generous benefits for some and almost no protection for women and the young unemployed who are entering the market. These groups are severely underprotected, which is why they tenaciously fight for their interests, even though they are not properly represented through a labour union. Some consider the Southern European model to exist as an autonomous system, while some dismiss it as a subtype of the conservative model. There also exists a radical model. It mainly involves Australia and New Zealand, though some people also add Great Britain to this group. These countries are usually considered to be part of the liberal model, though they represent different strategies of fulfilling the needs of citizens. The poverty threshold which entitles to receive social support for people under a certain income limit is not as low as in the United States, i.e. in a typical liberal model. It is much higher. People whose incomes are close to the average have the right to income-dependent benefits. Both in Australia and in New Zealand there are attempts at influencing employers and the market to make salaries and protection within the labour structure independent from employers, at least to a certain degree. The difference also lies in minimal pay. Australia has the highest minimum pay per capita per hour, when it comes to purchasing power. New Zealand also has some of the highest minimal pay. This is one reason for pointing out a separate, radical model. Walter Korpi considers it to be an addressed model. There is also an East Asian model, existing under different names. It also involves a stronger role of the family and the workplace in fulfilling needs. I believe that this model's strategy is based around the idea that the state never gets involved in developing a social policy. Instead, its efforts are directed at developing companies—it fosters economic growth. It is assumed that when the companies start offering workplaces, they also guarantee the fulfilling of certain needs. The family should serve as a carer and provider,
while the workplace should ensure employment and need fulfilment during a potential crisis. Instead of focusing on social policy, we aim at providing employment for every citizen, so that they can fulfil their needs. The next model is the liberal-collectivist model, which has been defined by Norman Ginsburg, an English neo-Marxist some time ago. The state guarantees the minimum fulfilment of the basic needs of all citizens, while all other needs should be dealt with by the citizens themselves. If you wish to have your basic needs taken care of, the state can guarantee this. But if you want more—it is up to you. Esping Andersen's models were probably mostly criticised by women, especially since they represented a male point of view. Decommodification was supposed to free men from functioning on the market. But what about women? They were not only burdened with work but also had to take care of the household. Thus there emerged two models presented by Catherine Jones and Alan Siaroff, which offer a different approach towards family. There is also some empirical research conducted in order to verify the accuracy of Esping Andersen's classification. Walter Korpi guards the original data, but various people attempt to verify his calculations on their own. Quite often these people conclude that certain states should appear in different configurations within the classification. Sweden and Norway still remain the best representatives of the social democratic model. Finland is often moved to the conservative model category. Denmark fits into different places depending on the classification. I think that the most interesting study has been conducted by two American scientists, Scruggs and Allan, who tried to accurately calculate the decommodification index, in the same way Andersen did before them. They introduced a modified version of the decommodification index, with certain alterations. They also included Switzerland into the social democratic model, even though its social policy is certainly less developed than in the case of Scandinavian countries. But according to certain indicators, the Swiss model is very similar to the social democratic one. The three most important aspects of the social democratic model, often defined in literature on the subject, are: universal benefits, equality and—one thing which is often omitted—the role of the state in social policy. The state is considered in this model to be the main subject responsible for fulfilling the needs of citizens and solving social problems. In the liberal model—best represented in the United States, since that is where it functions in its full form—the citizens turn to the state as their last resort, since nobody trusts the state. The people try solving their problems on their own or through commercial institutions, by e.g. organising a concert or a fundraiser for a given goal. The state intervenes only when nothing else can be done. When there is a problem in social democratic countries, the state is obliged to take care of it immediately. The citizens trust the state. Do we trust the state in Poland? The Polish society treats the state as “them,” some exterior entity. The citizens are “us,” and the state is “them.” The Social Insurance Institution (ZUS) is not a civic community institution in charge of their premiums. It is perceived as a state institution which takes all our money away from us. Citizens often refer to ZUS as stealing their money. When there was an attempt to introduce care insurance I would often read comments in the paper, announcing it not as a contribution to fulfil common needs, but as a new tax. The trust towards the state in social democratic countries is a traditional element. It was not something new, introduced when the social democrats won the elections. The trust towards the state had been there since a long time. If we limit the fulfilment of needs to those citizens who belong to a given structure, e.g. the family or a labour community, or who function on the market, then if it they are not part of these structures and something happens, they will be beyond help. The only subject which seems to be most successful in making the citizen independent from certain structures is public authorities. That is why they are the ones who take responsibility for our needs. Perhaps this does not have to be related to social democracy—if we look at the
decisions made on the local level in Nordic countries, they were always aimed at developing social services, regardless of which coalition, left-wing or right-wing, was in power. This meant new hospitals or kindergartens. Regardless of the government in office, the belief that public authorities can do certain things better is deeply-rooted within Nordic societies. The other characteristic aspect of the social democratic model—which is also something which does not appear in literature, not even in Esping Andersen's writing, as he left it between the lines—is the unique relation between the developed, generous, universal social policy and a highly effective open market economy. For as long as it was possible, the social democrats tried to reshape pure market economy, mostly through Keynesian methods. There is a unique combination of solidarity and individualism in Sweden. Only solidarity sounds social democratic here, as individuality most often comes to mind in the case of liberalism. Social policy within social democratic countries aims at enabling the citizen to support themselves. This model theoretically assumes that everyone can fulfil their needs whether they function on the market or not. On the other hand, the model was based on a social policy dedicated to providing the chances for that. The employment rate in the Nordic countries is the highest in the world. Perhaps this is why Switzerland is considered to be social democratic, as its employment rate is higher than in the case of the United States' liberal model. One can go about without work in Scandinavian countries and still be able to fulfil their needs. Despite of that, all the citizens are working. Full employment was one of the goals of social democrats, though not in the way it is defined in the Beveridge model. Beveridge defines employment in a situation where the demand for work is greater than the supply, i.e. when there is more workplaces than potential workers. The social democrats in Sweden learned that a situation like this, especially after the war, inevitably leads to inflation. The unions are not capable of controlling the demands of their members to raise their salaries, which is where excessive inflation, the main adversary of social policy, comes into play. This is why the Swedes aimed at full employment. Bare in mind that this is not about keeping the lowest possible number of the unemployed. A certain surplus of citizens looking for a job is in fact necessary. Full employment from their point of view meant employment for marginal groups, above all for the disabled. The state made effort to place these groups on the labour market. The same with women—the employment rate among women in social democratic countries is one of the highest in the world. It is often said that the goal here was to help combine professional and family-related responsibilities, but this was also about including women and the disabled onto the labour market. The disabled are fully entitled to basic means of support in the social democratic model. In their case, seniority is not required—in Poland it is. I always stress that this model could not function if the unemployment rate was not high, as there would be no resources for a universal social policy system. This model is possible only due to the fact that the number of citizens who are employed and who pay their taxes and insurance premiums is high. The last thing I will mention is so-called market poverty. Poverty in the European Union is measured before and after social transfers, i.e. before and after paying taxes and insurance premiums. Market poverty in Sweden is higher by a number of points than in the United States. I consider this to be a certain indicator of the relative success of market economy, even though some say that the economy in the United States cannot operate in such conditions. If we look at market poverty, it turns out that it works in accordance with the principles of the market. The market polarises wealth and poverty. The social democratic model is most effective when it comes to eliminating poverty after social transfers, as the highest percentage of this poverty reduction takes place in social democratic states.