Introduction

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

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

who made a comparative cross-country analysis for eighteen developed OECD economies in 1980. without potential loss of job.3 United Kingdom 23. is compulsory state social insurance. both in scope and application. paid vacation and finally pension would be good examples of how de-commodification manifests today. and it is not surprising that there seems to be the lack of enthusiasm of employers on this issue. For instance. The Three Worlds of Welfare Capitalism. Table 1 – De-commodification of workers in 1980* De-commodification score Australia 13. indirectly deviating from de-commodification.8 New Zealand 17. Securing the de-commodification right is the utmost task of the welfare system.5 Now. but for a very long time it could hardly be said to have brought about much in social programs. let us have a look at some statistical information regarding decommodification in different countries. but not always blue-collar workers and less educated personnel. or general welfare. thus in some respect it was like a vicious circle. 1990. Polity Press. The data will be presented from Espring-Andersen results of research. G. civil servants. Sick insurance and unemployment insurance.1 4 Esping-Andersen. they are difficult to mobilize for a coordinated action.0 Ireland 23. maternity and parental leave as well as educational leave. as most if not all benefits depended almost entirely on contributions. Germany was a pioneer in social insurance at Bismarck times.1 Canada 22. de-commodification strengthens the worker and weakens the absolute bargaining power of the employer.4 Italy 24. and thus on work and employment. opt out of work when they themselves consider it necessary 4. The second characteristic of the welfare state. the mere its presence does not necessarily mean its automatic utilization and therefore de-commodification.that citizens can freely.0 United States 13. however. according to Esping-Andersen. Hence. . and higher-echelon white-collar employees enjoy such benefits. When people completely depend on the market. income. though this was not a primary rationale behind its creating.21 5 Nowadays these academics. though it is also relatively limited.. p. as the fear to lose a job and leave his family without any means of survival is usually bigger than fighting for universal principles.

7. Sickness and unemployment programs include benefit replacement rates (net) for a standard worker during the first 26 weeks of illness/unemployment. contribution period in years. however some of them like Belgium and the Netherlands. medium to high and high degree of commodification..2 Switzerland 29. This is the case for AngloSaxon nations where individualism and the market are superior to collective 6 Esping-Andersen.4 Denmark 38.37 .8 Austria 31. G. Polity Press. D. it is visible enough that countries where strong labor unions have no waste cooperation with the regime.5 Germany 27. and individual’s share of pension financing. sickness and unemployment security. fall close to the Nordic states. In an attempt to explain this positioning of different countries. 1990.e.1 Mean 27.6 As seen from the table.1 Belgium 32.Japan 27. where social democracy seems to play no major role.7 Finland 29.4 Netherlands 32.2 S. i. p. the higher the degree of de-commodification De-commodification included three basic features of social protection: pensions.7 * The bigger the score. The Anglo-Saxon nations are all concentrated at the bottom of the index. the number of weeks of employment required prior to qualification. and the number of waiting days before benefits are paid. The Three Worlds of Welfare Capitalism. the aggregate results were obtained. Continental European states are located in the middle.1 Norway 38. while the Scandinavian countries are at the top.3 Sweden 39. Old-age pensions consider minimum pension benefits for a standard production worker earning average wages. in the end. countries tend to group into three normative categories: low to medium. de-commodification seems to be relatively low. standard pension benefits for a normal worker.1 France 27.

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

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

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

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

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

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