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

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

who made a comparative cross-country analysis for eighteen developed OECD economies in 1980. as most if not all benefits depended almost entirely on contributions. and thus on work and employment. however. both in scope and application. thus in some respect it was like a vicious circle. indirectly deviating from de-commodification. but for a very long time it could hardly be said to have brought about much in social programs. opt out of work when they themselves consider it necessary 4. Sick insurance and unemployment insurance. but not always blue-collar workers and less educated personnel. without potential loss of job. they are difficult to mobilize for a coordinated action. paid vacation and finally pension would be good examples of how de-commodification manifests today. Hence. Polity Press.5 Now. though this was not a primary rationale behind its creating.1 Canada 22. as the fear to lose a job and leave his family without any means of survival is usually bigger than fighting for universal principles.0 United States 13.0 Ireland 23. or general welfare. The second characteristic of the welfare state. income.that citizens can freely. 1990. according to Esping-Andersen. maternity and parental leave as well as educational leave. The data will be presented from Espring-Andersen results of research. p. civil servants.8 New Zealand 17.4 Italy 24.21 5 Nowadays these academics. The Three Worlds of Welfare Capitalism. Securing the de-commodification right is the utmost task of the welfare system. When people completely depend on the market. Germany was a pioneer in social insurance at Bismarck times. Table 1 – De-commodification of workers in 1980* De-commodification score Australia 13. G. the mere its presence does not necessarily mean its automatic utilization and therefore de-commodification. let us have a look at some statistical information regarding decommodification in different countries.. de-commodification strengthens the worker and weakens the absolute bargaining power of the employer. and higher-echelon white-collar employees enjoy such benefits. For instance.1 4 Esping-Andersen. and it is not surprising that there seems to be the lack of enthusiasm of employers on this issue. is compulsory state social insurance. though it is also relatively limited.3 United Kingdom 23. .

Japan 27. 7. D. The Three Worlds of Welfare Capitalism. and individual’s share of pension financing. the aggregate results were obtained.4 Netherlands 32. The Anglo-Saxon nations are all concentrated at the bottom of the index.7 Finland 29. In an attempt to explain this positioning of different countries. standard pension benefits for a normal worker. the number of weeks of employment required prior to qualification. Polity Press. countries tend to group into three normative categories: low to medium. i.8 Austria 31. sickness and unemployment security.1 Norway 38.2 S. where social democracy seems to play no major role. and the number of waiting days before benefits are paid. p. Sickness and unemployment programs include benefit replacement rates (net) for a standard worker during the first 26 weeks of illness/unemployment.5 Germany 27.6 As seen from the table. de-commodification seems to be relatively low. the higher the degree of de-commodification De-commodification included three basic features of social protection: pensions. it is visible enough that countries where strong labor unions have no waste cooperation with the regime.1 Mean 27.4 Denmark 38. medium to high and high degree of commodification.. contribution period in years.2 Switzerland 29. G. in the end. however some of them like Belgium and the Netherlands.37 . Continental European states are located in the middle. Old-age pensions consider minimum pension benefits for a standard production worker earning average wages. This is the case for AngloSaxon nations where individualism and the market are superior to collective 6 Esping-Andersen. fall close to the Nordic states.1 France 27.3 Sweden 39.1 Belgium 32.e. while the Scandinavian countries are at the top.7 * The bigger the score. 1990.

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

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

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

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

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

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

Sign up to vote on this title
UsefulNot useful