The Concise Oxford Dictionary of Politics (291 page)

The federal republican system of government established in Germany in 1919, based on a new constitution drawn up at Weimar. From the start the Republic faced a range of political and socio-economic problems which made the achievement of order and stability extremely difficult. It has often been seen as a ‘democracy without democrats’ in the sense that it seemed to lack a solid basis of liberal support, and was also unable to secure the allegiance of key élites in German society. As world economic conditions worsened at the end of the 1920s, political disenchantment heightened and extremist movements and parties gained strength. From 1930 onwards the Republic was effectively transformed from a parliamentary to a presidential system, with President Hindenburg appointing cabinets which lacked a parliamentary majority and which made increasing use of powers of decree. Eventually this paved the way for the rise of
National Socialism
, the appointment of the party leader, Adolf Hitler, as Chancellor in January 1933, and the ensuing suspension of the Weimar constitution.
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The branch of economics dealing with how well off people are, or feel themselves to be, under different states of affairs. Sometimes regarded as the normative branch of economics. Other branches (‘positive economics’) describe how economies work, and the consequences of any one person's actions or choices for everybody else. Mainstream welfare economics has nevertheless been fiercely attacked, from both inside and outside economics, for pretending to make fewer value-judgements than it actually does. One application of welfare economics is
cost-benefit analysis
, which attempts to balance the gains and losses from some proposed policy, such as building an airport. Some critics say that the sort of technique involved, which must place a price on people's time at work and at leisure, and a price on any Norman churches that would be lost if the airport was built, must always be arbitrary and worthless. Defenders say it has to be done somehow.

 
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A system in which the government undertakes the main responsibility for providing for the social and economic security of the state's population by means of pensions, social security benefits, free health care, and so forth. In 1942 the
Beveridge Report
in the United Kingdom proposed a far reaching ‘settlement’, as part of a wider social and economic reconstruction, once victory was secured. The Beveridge Report thus became the blueprint for the British welfare state.
The Conservative-led coalition government was initially lukewarm about Beveridge's proposals, but the popularity of Beveridge's plan forced a rethink, and even before the war had ended they started to legislate. By 1944 a White Paper made full employment the first goal of government economic policy, and the Butler Act provided for universal secondary education. Labour, however, won the 1945 general election, to a considerable extent because they appeared more wholeheartedly in favour of the Beveridge plan. The key measures which followed, largely implementing the plan's essential features, were the National Insurance Act 1946, the National Health Service Act 1946, and the National Assistance Act 1948. An ambitious programme to build a million homes was also launched. By 1948
The Times
newspaper proclaimed in an editorial that these measures had created ‘security from the cradle to the grave’ for every citizen.
These measures were the foundation of the ‘welfare state’, which was seen as synonymous with ‘social security’. In a specific sense this meant entitlements to benefits under the newly established national insurance and assistance schemes. In a wider sense it referred to the other reforms implemented at the time, particularly the guarantees of full employment and access to a national health service free at the point of use. Underlying all this however, was a new conception of the relationship between the state and the individual within a market based society. This was based on an acceptance of the need for extensive intervention to ensure that its worst effects were mitigated, on the grounds that their causes were systemic rather than the fault or responsibility of individuals.
Nevertheless, behind the apparent consensus on the need for a welfare state, there was political conflict on its meaning between ‘reluctant collectivists’ in the liberal tradition (such as Beveridge himself) who saw the reforms of the 1940s as a high-water mark, and reformist socialists who saw it as a framework for developing a more concerted shift towards a planned and egalitarian society. A small minority of commentators, such as
Hayek
, were never convinced of the need for the welfare state in the first place and remained resolutely ‘anti-collectivist’.
The growing ‘crisis’ of the welfare state since the 1970s can be seen as due to changed economic and social circumstances, a disintegration of the postwar consensus, or both of these. Undoubtedly, growing economic pressures, were making it harder to meet more insistent demands for improved services, and increased social needs due to changes in family patterns, more older people, and growing numbers of unemployed people. On the other hand, the ‘welfare state’ had been increasingly criticized within a more polarized political culture. Critics from the right argued that by removing responsibility from the individual, the welfare state stifled people's initiative to solve their own problems. Critics from the left agreed in part that the welfare state as it currently stood was often ‘oppressive’, but attributed this to a failure to attack the root causes of class, gender, and ‘race’ inequalities. This analysis and prescription was both more radical than that offered by socialists in the 1940s and 1950s, and addressed a broader agenda, perhaps under the influence of the ‘new social movements’ which had arisen in the 1960s.
Even before 1979 there were discernible shifts by the 1974–9 Labour government after the expenditure crisis of 1976 towards retrenchment and ‘restructuring’ of welfare in ways that responded most to right-wing rather than left-wing critics. However, after the Conservative election victory of 1979, this shift occurred in a more concerted way and there have been substantial reforms in all of the services established as a result of the Beveridge Report, though only in one, housing, could there be said to have been significant retrenchment in provision. In other areas, there have been a tightening of eligibility rules, and shifts to decentralization of managerial responsibility within tighter centralized control of finance. Perhaps most controversial of all has been the reform of the National Health Service in 1990, against widespread opposition, to create an ‘internal’ market within a socialized system.
In a wider sense, there has been a significant shift from Beveridge's assumptions. Most importantly, there was a shift in economic priorities from maintaining full employment to controlling inflation. The modest redistribution of income and wealth achieved up to the 1970s, was reversed by cuts in income tax and a shift to more regressive forms of indirect taxation like value added tax (VAT). Despite all this, by the end of the 1980s the welfare state had been ‘restructured’ rather than abolished. It was suggested that a new ‘welfare pluralist’ consensus had emerged in which it was accepted that private, state, and voluntary sectors could exist side by side.
Renewed economic crisis in the 1990s has again placed significant question marks over the future of state welfare, with the Conservative right calling openly for a ‘safety net’ state. The background to this is growing internationalization of the global economy, which has undermined the autonomy of national governments, and has led to pressure to reduce wage costs in order to attract highly mobile investment.
It is probably most helpful to situate the British variant analytically and comparatively as a ‘welfare state regime’. These, G. Esping-Anderson argues in
The Three Worlds of Welfare Capitalism
, fall into three main types within market societies: ‘conservative’, ‘social democratic’, and ‘liberal’, depending on the extent to which they seek to work with, or to counter the effects of the market on social inequalities. An example of a conservative regime is Germany, characterized by high welfare provision within a hierarchical and ordered society, while Sweden is closest to an egalitarian ‘social democratic’ regime. Though in 1948 the British welfare state was among the most developed, by the 1970s provision had become more extensive in conservative and social democratic regimes, and the British welfare state looked closest to the ‘liberal’ model, with only limited attempts to use welfare to mitigate social inequalities. Though in the straitened economic circumstances of the 1980s and 1990s all welfare state regimes have been under pressure, in Britain and the United States the shift towards liberalism has been particularly pronounced.
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