The welfare state has become the topic of much research. Answering the
questions of how the growth in Western Europe became possible in the postwar period and whether or not it is possible to repeat this experience, with
necessary adjustments, remains a question for many developing states.
Some claim that a welfare state is a new step in the capitalist development,
while others believe it is nothing more than preservation of the status quo.
At the same time, there seems to be no universal model of a welfare state,
and each case is different, despite the similar characteristics.
As a result of social unrest subject to poor economic and labor conditions in
the end of the nineteenth century and later as a result of the Great
Depression, it became clear how vulnerable and insecure the average citizen
has been. Among the pioneers to secure the citizen’s well-being were
Germany, all of the Nordic countries, the Netherlands, Uruguay and New
Zealand and the United Kingdom. A substantial contribution to the spread of
these policies was made by the United States after the World War II under
the Marshall’s plan.
Today the “club” of welfare states is much bigger than in early times and it
includes most of developed and even some developing countries. In the
framework of this paper a special interest represent the post-Soviet countries
and Ukraine in particular. Like other communist states in the Soviet time, it
was characterized by strong but disproportional social development. The
classical term of the welfare state could not be applicable to Ukraine,
because social and economic rights were not always if at all accompanied by
the civil and political rights, both in theory and especially practice.

The paper discusses the meaning of the welfare state and considers its
evolution. A special emphasis will be given to the existing models and
possibility of their implementation in modern Ukraine. To identify that an
analysis of political and economic environment will be made.
Part I – theoretical background of the welfare state
What is a welfare state?
The amount of literature which directly or indirectly deals with aspects of the
welfare state abounds, however there seems to be no clear and finished
definition of what a welfare state actually is. In its essence it involves state
responsibility to secure some basic modicum of welfare for its citizens, and in
the word “basic” or degree of actual wealth distributed people (as well as
how), future differences between different models of welfare states will arise.
Technically speaking a welfare state is a pattern of government policies
where the state plays a key role in the protection and promotion of the
economic and social wellbeing of its citizens. Unlike the free market
economy, where the government is simply a watchdog, in the welfare state

If workers actually do behave as commodities. the cheaper the price. 150 p. L. He accurately points out that a big difference between the former feudal system and the new capitalist one lies in the fact that feudal workers were provided with minimum conditions of sustaining life. they will by definition compete.3 In this way.e. and were more or less under his patronage. and among all social rights the right to de-commodification of an employee seems to be the most important. What shall we do?. and when a person can maintain a livelihood without reliance on the market. At the same time it was not until the moment that workers’ survival became dependent on cash nexus that one could speak of his commodification. where the social benefits to individuals are achieved through redistribution of taxation. such as illness. As commodities. Espring-Andersen. tools of producing goods and the finished results of their work they came to depend on those enslaving them. whereas with monetization of labor no responsibility from the former feudal was there and the existence of people came to depend exclusively on the market and luck. The Three Worlds of Welfare Capitalism. Marx implied and I totally support this view..2 The same ideas were expressed by the Russian writer and philosopher. As commodities. Leo Tolstoy. and the fiercer the competition. From that very moment when workers were deprived of their resources like land. Elpidina. 2 Esping-Andersen. the author of a famous book The Three Worlds of Welfare Capitalism. commodity is easily destroyed by even minor social contingencies. firstly physically and later more economically. and atomized. no welfare state is actually possible without social dimension. From the economic side it is a type of mixed economic system. and public responsibility for those unable to have it otherwise.1 Social rights is indeed an important element in the welfare state system. G. The problem of commodification lay at the heart of Marx’s analysis of class development in the accumulation of capital: depriving workers of their labors turned them from independent producers into wage-earners having no property. Polity Press. workers are replaceable. not to speak about macroeconomic changes such as the business cycle. de-commodification takes place when work is done as a matter of right and not a necessity.. entailing 1 Indeed. 1884-1886. p. people are prisoners to powers beyond their control. commodification of labor implies alienation and leads to stratification of society. 145 3 Tolstoy. At the same time. easily redundant. with the introduction of social rights (understood in modern context) loosening of the pure commodity status of a worker becomes possible. i. from this perspective authoritarian regimes like that in the former Soviet Union may hardly be called a welfare state in its meaning.system it is tasked to realize the principles of equality of opportunity of distribution of wealth. According to Mr. their capital. . 1990. whether you call them feudalists or capitalists.

that citizens can freely.3 United Kingdom 23.5 Now.1 Canada 22. is compulsory state social insurance. and higher-echelon white-collar employees enjoy such benefits. and it is not surprising that there seems to be the lack of enthusiasm of employers on this issue. as the fear to lose a job and leave his family without any means of survival is usually bigger than fighting for universal principles. maternity and parental leave as well as educational leave. according to Esping-Andersen. without potential loss of job. opt out of work when they themselves consider it necessary 4. When people completely depend on the market. G. The second characteristic of the welfare state. Table 1 – De-commodification of workers in 1980* De-commodification score Australia 13.8 New Zealand 17. The Three Worlds of Welfare Capitalism.21 5 Nowadays these academics. civil servants. Polity Press. indirectly deviating from de-commodification.1 4 Esping-Andersen. Securing the de-commodification right is the utmost task of the welfare system.4 Italy 24. who made a comparative cross-country analysis for eighteen developed OECD economies in 1980. or general welfare. 1990. Sick insurance and unemployment insurance. Hence. . they are difficult to mobilize for a coordinated action. For instance. both in scope and application. de-commodification strengthens the worker and weakens the absolute bargaining power of the employer. The data will be presented from Espring-Andersen results of research. though this was not a primary rationale behind its creating. but not always blue-collar workers and less educated personnel. Germany was a pioneer in social insurance at Bismarck times. let us have a look at some statistical information regarding decommodification in different countries. however. paid vacation and finally pension would be good examples of how de-commodification manifests today.0 United States 13. though it is also relatively limited. p. thus in some respect it was like a vicious circle. and thus on work and employment. income. as most if not all benefits depended almost entirely on contributions. the mere its presence does not necessarily mean its automatic utilization and therefore de-commodification. but for a very long time it could hardly be said to have brought about much in social programs.0 Ireland 23..

standard pension benefits for a normal worker. fall close to the Nordic states. D. Old-age pensions consider minimum pension benefits for a standard production worker earning average wages.e. countries tend to group into three normative categories: low to medium. the higher the degree of de-commodification De-commodification included three basic features of social protection: pensions. In an attempt to explain this positioning of different countries. de-commodification seems to be relatively low.1 Mean 27. where social democracy seems to play no major role.7 * The bigger the score. and the number of waiting days before benefits are paid. This is the case for AngloSaxon nations where individualism and the market are superior to collective 6 Esping-Andersen.4 Netherlands 32. p.2 Switzerland 29.3 Sweden 39. it is visible enough that countries where strong labor unions have no waste cooperation with the regime.8 Austria 31. contribution period in years. and individual’s share of pension financing. however some of them like Belgium and the Netherlands. in the end.6 As seen from the table.5 Germany 27.2 S. G.7 Finland 29. the aggregate results were obtained. while the Scandinavian countries are at the top. Polity Press. The Three Worlds of Welfare Capitalism. medium to high and high degree of commodification.Japan 27. 7. 1990.37 .1 France 27. Continental European states are located in the middle.1 Belgium 32. the number of weeks of employment required prior to qualification. sickness and unemployment security. Sickness and unemployment programs include benefit replacement rates (net) for a standard worker during the first 26 weeks of illness/unemployment.4 Denmark 38.1 Norway 38. The Anglo-Saxon nations are all concentrated at the bottom of the index.. i.

If in the nineteenth century the enemy was an emerging collective effort. Now we will address these differences in greater details.. relatively recent successful experiments of social democracy in Nordic states does lead to a greater financial freedom. The necessary conditions for a welfare state to spread were: a) perception of the communist threat. with the church “taking care” of a family unit. and not an act of good will. Finally. coming from both historical differences and specific conditions at a particular time. In the after-war period of 1950s onwards. Different models of a welfare state We have understood how the welfare state has evolved. Indeed. and d) a specific type of a state – i. . c) availability of the ‘uncle Sam’. but not an individual. there is a visible shortage of empirical cases suggesting that industrial working classes ever had the voting strength. i. Thus. however by itself it is a general concept. Earlier we have already seen that different states had a different degree of de-commodification of labor force. Leftist governments nearly always required a coalition of various social groups to expand welfare policies. is why and how possible? Why did the ruling elites agreed to cater a greater part of welfare to the masses? Who and what received as a result of this ‘generosity’? Is it going to last long? Let us try to give some answers on these questions together. some of the states like Germany and Austria have had more corporate conservative culture in the past. meaning they had at least 50% in highest legislative bodies to determine national policy making.well-being.e. then in the second half of the twentieth century it was an institutionalized ideological order of communism as a primary enemy and not care for demands of the people. and the effect of their work is not easy to witness. b) demographic changes – a sharp increase in the old age population as a result of war. who took every chance to undo what has been by their former colleagues. the superpower country able to finance the introduction of the welfare benefits at early stages.e. fundamentally the same rationale lay behind the mass spread of the welfare state. At the same time. within social democracies there are differences too. which encompasses different types or models of development. combined with the subsequent baby-boom in the 1950s and 1960s. a relatively advanced democracy which has outgrown early stages of the wild capitalism. Causes and conditions for a welfare state As everything in history a welfare state must be understood in its historical context. a welfare state was created of fear and interests to preserve the elites’ position. It is an evolutional phenomenon subject to a compromise and not a revolutionary change. as after the first term they could be easily put away by their opponents. The two most important questions I continue asking myself with respect to this theme. with Sweden leading the score.

At the same time. unemployment. not earlier7. meaning that contributions to these funds are mandatory and usually deducted from payroll. so-called corporatist welfare states developed. A state usually has a superior role. help from the state would only come if the means and possibilities of a family are exhausted.. etc. In conservative welfare states. the regime gives little if anything to an individual. will surely notice a lot of titles standing before the name of a person. depending on the status of the labour associations. Prof. as in Germany and Austria. like MA. because this is an extremely hierarchical order. Doctor Anna Schmidt. run by labor associations. where under circumstances of a man only working a wife could gain access to these benefits only through her husband. accident insurance). Still further. which descended from the medieval guild system and 19th century mutual aid societies. achieved through social insurance funds (old age pension. we have to bear in mind that they never existed in a pure form. Those who come to Austria. civil servant. an efficient production system comes not from competition. but from discipline. If they tolerate democratic 7 Hierarchical order also implies quite varying social benefits for different kinds of employees. In this model.According to Prof. In continental Europe where the influence of the Catholic Church and of the authoritarian conservative state was historically strongest. . which both can deplete funds rapidly. such associations enjoyed a public status. there are three main models of a capitalist welfare state: - Conservative or Corporatist Welfare Model – evident in the continental Europe - Liberal Welfare Model – popular among Anglo-Saxon nations - Social Democratic Welfare Model – mostly practiced by the Nordic states When speaking about different model.. health. The most prominent example of this regime would the German welfare model of Bismarck. The Conservative Welfare Model.e. Esping-Andersen. where the last would have the most privileged status. white collars. i. blue collar. Such public insurance funds were established and operated either by the government or. Conservative political economy evolved in reaction to the French Revolution and the Paris Commune. maintaining order and status is of utmost importance. it was nationalistic and anti-revolutionary. In the top of the corner is a family unit. While being formally independent. much more influential than that of the chaos of markets. the system is very much dependent on the labor force employment and an aging population. and sought to suppress any democratic initiative. and every nation shares characteristics inherent to more than one “classical” model. Moreover.

It enjoys high level of public support . Nassau Senior and later Manchester liberals emphasized the laissez-faire element in Smith.It maintains and reinforces social cleavages . which will probably provide higher quality and stigma-free health care and pension benefits. the end of the social order would come soon. non-traditional and/or flexible jobs. Besides..It is sensitive to employment conditions and demographics . however all of them were agreed prosperity is to be reached with a maximum of free markets and a minimum of state interference.Those occupied in new.It supports private service system without rationing (e.It allows benefit recipients to maintain their level of income . M. The main advantages of the Conservative Welfare State are as follows: . based on public services or insurance schemes. will likely be not secured enough .Benefits increase as contributions increase8 However.. despite a strong labor union representation.g. The 8 Seeleib-Kaiser. rejecting any form of social protection outside the cash nexus. unsustainable: poor services to poor and politically marginalized population segments mean high social unrest.It drives up labor cost (payroll taxes) and low wage unemployment . The state here generally encourages the market to act as a co-provider of benefits.It often provides few benefits for those outside the insurance model9 Liberal Model of a Welfare State. It usually delivers benefits to a very low income working class representatives.mass participation and allow authority and status boundaries to dissolve. Welfare Systems in Europe and the USA: Conservative Germany Converging towards the US Model?. Liberal political economists were hardly of one mind when it came to policy advocacy. carrying a negative public stigma. partly by providing a low levelof public services. 2013 9 Ibid. the model has quite a few drawbacks as well: . In this model leftist parties hardly come to influence state policies. . In this way. it tends to create a two-level society. social dependents will be much encourage to opt for employment. which makes welfare programs politically unpopular and. in health care) . The liberal welfare regime is characterized by means-tested programs and modest universal benefits. In its pure form the liberal model excludes the majority of population from enjoying welfare benefits. in the long run.

and fuel ‘inefficiencies’. The individualization of agriculture was an intervention by the Crown and it implied the weakening position of the nobility that gradually turned into an urban and bureaucratic elite. pervert the market. but not exclusively. for it would be likely to politicize the distributional struggle. The Social Democratic Model.It is the least sensitive to demographic changes in the population . In addition. and regulation of the economy in the general interest. the state has. Because a high level of public services is achieved. Retrieved 28 July 2015. thus fighting substantial stratification of society. but mostly in low-skills sector10 Drawbacks of the model have already been listed. 2012. cooperation between working and peasant class.liberals rightly feared universal suffrage. differentiated services 10 European Welfare States: Information and resources. and includes the instruments of state provisions. in fact. collective bargaining arrangements. it lifts them to the level of the middle class.It ‘stimulates’ job growth. How to Conceptualize the Welfare State.html .High benefits. The social democratic welfare state emerged as a result of a class alliance between the industrial working class and the small holders (a red-green alliance in the interest of full employment and farm price subsidies). while ensuring the highest possible level of service. The main advantages of the Nordic system are as follows: . which should result in the dominant role of leftist parties in politics. Therefore. The liberal model might still have positive sides: . the Scandinavian welfare state tends to reduce class and income It supports economic and social interventions to promote social justice within the framework of a capitalist economy. the liberals were hardly eager to extend social rights. Social democracy has been the dominate political force in developing this universalistic welfare state that pervades all aspects of people's lives.Universality encourages support of population . The model implies a relatively high degree of public awareness and social responsibility.It has relatively low taxes .pitt. Instead of providing the benefits to the poor. crowded out all private competition. The necessary preconditions for an almost dreamy model like this are liberal tradition with great regard for individualism and equality. It is achieved primarily. through progressive income and value-added taxes. http://www.

it requires high tax burden. By and large.Positive employment effects . the question is how Sweden will cope the increased population and sustain economic growth at the same time. New York. Given existing obstacles in elderly care as well as healthcare in general. when the share of elderly has more than doubled. several agencies such as National Agency for Social Insurance and local municipalities are responsible for redistribution of about 48% of the Swedish GDP in the form of taxed income. . This lead in turn to a 11 Steger. In the twentieth century. http://www. 146. old age and for the family. The social welfare part includes but is not limited to financial security in the case of illness.Reduced social cleavages11 However. The population pyramid in 1900 for Sweden (see Fig. assistance to disabled people etc. the share of the population over 65 years old more than doubled. Economy should be advanced too. 12 The Swedish Government official website.. Population ageing as a background for the modern welfare system Sweden has been experiencing population ageing over more than 100 years. The Quest for Evolutionary Socialism: Eduard Bernstein And Social Democracy. there are government bodies. p. education and employment. social services such as health care for adults and children. 2. and the Ministry of Employment 12. with a lot of younger people successively tapering off with increasing age to a pointed top. of the Ministry of Education and Research. In education.regeringen. responsible for the smooth functioning of the system: the Ministry of Health and Social Affairs. 1997. this system may be difficult to operate. Social welfare in Sweden The welfare system in Sweden is composed of three main parts.1) seems to have a more classic pattern. Manfred B. strong government orientation and a relatively mature society. so that a relatively small share of income would suffice for a decent living. each of the three is mostly funded by taxes (at the central and local levels) and utilized by the public sector. In this regard. the phenomenon common in all agricultural societies of the past and seen in many developing countries nowadays. reaching 17% by the end of the century. which are the social welfare. the welfare focuses mainly on providing pre-school services and childcare for schoolchildren as well as adult education. UK. USA: Cambridge University Press. Cambridge.

One of the reasons why the share of t h e elderly increased is that life expectancy increased and people are living longer. the age structure would mostly have been the identical in 1950 as in 1860. with projections for further increases to 83 and 86 years by the year 2050. 1957.a threat to the welfare state? The case of Sweden. 2. he demonstrated that the population ageing occurred in the first half of the twentieth century was almost entirely the consequence of fertility drop13.”14 Thus. has been the engine of population ageing may appear contradictory. How the age distribution of a human population is determined. Fig. Yet the main reasons for population ageing is considered the declining fertility. Demographic Research Monographs. one may expect negative population momentum. the fact that fertility. 2010. and not mortality.1 – Population Pyramid for Sweden Source: BiSOS and Befolkning (Statistics Sweden) Indeed.. Scott C. Cold Spring Harbor Symposia on Quantitative Biology. Scott imply that “it is easy to confuse population ageing with individual ageing. 13 Coale. Truly so. had fertility rates remained the same. In his work. J. received the name as positive population momentum. p. It is nevertheless important to make this distinction. Bengtsson and K. up to the 77 and 82 years correspondingly in 2000. Coale. Ch. the phenomenon when higher fertility rates lead to larger generations. 11 . between the fact that life expectancy increases and the fact that the share of elderly in the population increases. 83–89. life expectancy at birth in Sweden has increased from 35/38 for men and women respectively in 1750. Indeed. 14 Bengtsson T. when the otherwise effect takes place.. 22. pp.. 2. according to A. despite substantial increases in life expectancy during this period. A. especially in light of the dramatic increase in life expectancy experienced in industrialized countries. with a smaller base and wider top.changing pyramid from traditional to the more urn-shaped age structure. Population ageing . T.

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