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

e. 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. 145 3 Tolstoy. The Three Worlds of Welfare Capitalism. they will by definition compete. de-commodification takes place when work is done as a matter of right and not a necessity. and among all social rights the right to de-commodification of an employee seems to be the most important. workers are replaceable. 1884-1886. people are prisoners to powers beyond their control. firstly physically and later more economically. Marx implied and I totally support this view. and were more or less under his patronage. Elpidina. not to speak about macroeconomic changes such as the business cycle.. their capital. As commodities. Polity Press. 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 Esping-Andersen. Espring-Andersen. According to Mr.. and public responsibility for those unable to have it otherwise. Leo Tolstoy. 1990. What shall we do?. where the social benefits to individuals are achieved through redistribution of taxation. easily redundant. the author of a famous book The Three Worlds of Welfare Capitalism. As commodities. G. p. and when a person can maintain a livelihood without reliance on the market. i. whether you call them feudalists or capitalists. from this perspective authoritarian regimes like that in the former Soviet Union may hardly be called a welfare state in its meaning. and atomized. commodification of labor implies alienation and leads to stratification of society. such as illness.system it is tasked to realize the principles of equality of opportunity of distribution of wealth. 150 p. tools of producing goods and the finished results of their work they came to depend on those enslaving them. If workers actually do behave as commodities. the cheaper the price. and the fiercer the competition.2 The same ideas were expressed by the Russian writer and philosopher. no welfare state is actually possible without social dimension. 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.3 In this way. entailing 1 Indeed. . From the economic side it is a type of mixed economic system. L.1 Social rights is indeed an important element in the welfare state system. At the same time. with the introduction of social rights (understood in modern context) loosening of the pure commodity status of a worker becomes possible. From that very moment when workers were deprived of their resources like land. commodity is easily destroyed by even minor social contingencies. 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 mere its presence does not necessarily mean its automatic utilization and therefore de-commodification. Table 1 – De-commodification of workers in 1980* De-commodification score Australia 13. p. both in scope and application. as the fear to lose a job and leave his family without any means of survival is usually bigger than fighting for universal principles. though it is also relatively limited. Sick insurance and unemployment insurance.8 New Zealand 17. de-commodification strengthens the worker and weakens the absolute bargaining power of the employer.1 Canada 22. Securing the de-commodification right is the utmost task of the welfare system.that citizens can freely. G. they are difficult to mobilize for a coordinated action. The Three Worlds of Welfare Capitalism. 1990. let us have a look at some statistical information regarding decommodification in different countries.5 Now. but not always blue-collar workers and less educated personnel. thus in some respect it was like a vicious circle. according to Esping-Andersen. as most if not all benefits depended almost entirely on contributions. Hence. When people completely depend on the market.21 5 Nowadays these academics. opt out of work when they themselves consider it necessary 4. civil servants. indirectly deviating from de-commodification. . however. The second characteristic of the welfare state. or general welfare. income. Germany was a pioneer in social insurance at Bismarck times. without potential loss of job.3 United Kingdom 23..4 Italy 24. maternity and parental leave as well as educational leave. and higher-echelon white-collar employees enjoy such benefits. Polity Press. For instance. is compulsory state social insurance.0 Ireland 23. though this was not a primary rationale behind its creating. paid vacation and finally pension would be good examples of how de-commodification manifests today.1 4 Esping-Andersen. The data will be presented from Espring-Andersen results of research. and it is not surprising that there seems to be the lack of enthusiasm of employers on this issue. who made a comparative cross-country analysis for eighteen developed OECD economies in 1980.0 United States 13. and thus on work and employment. but for a very long time it could hardly be said to have brought about much in social programs.

Polity Press. This is the case for AngloSaxon nations where individualism and the market are superior to collective 6 Esping-Andersen. D. Old-age pensions consider minimum pension benefits for a standard production worker earning average wages. i. it is visible enough that countries where strong labor unions have no waste cooperation with the regime. however some of them like Belgium and the Netherlands. countries tend to group into three normative categories: low to medium. p. 1990.1 France 27.8 Austria 31.4 Netherlands 32.6 As seen from the table. G.2 S. Sickness and unemployment programs include benefit replacement rates (net) for a standard worker during the first 26 weeks of illness/unemployment.e. contribution period in years.7 * The bigger the score. the higher the degree of de-commodification De-commodification included three basic features of social protection: pensions. de-commodification seems to be relatively low. in the end. The Three Worlds of Welfare Capitalism.7 Finland 29.4 Denmark 38. The Anglo-Saxon nations are all concentrated at the bottom of the index.5 Germany 27.2 Switzerland 29. the number of weeks of employment required prior to qualification. standard pension benefits for a normal worker.1 Mean 27.1 Belgium 32.. medium to high and high degree of commodification.37 . while the Scandinavian countries are at the top. Continental European states are located in the middle. and individual’s share of pension financing.Japan 27.3 Sweden 39. and the number of waiting days before benefits are paid.1 Norway 38. fall close to the Nordic states. In an attempt to explain this positioning of different countries. where social democracy seems to play no major role. sickness and unemployment security. the aggregate results were obtained. 7.

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

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

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

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

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

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