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

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

Securing the de-commodification right is the utmost task of the welfare system. The second characteristic of the welfare state. as most if not all benefits depended almost entirely on contributions. income. and higher-echelon white-collar employees enjoy such benefits. The data will be presented from Espring-Andersen results of research. .1 Canada 22.3 United Kingdom 23.4 Italy 24.1 4 Esping-Andersen. or general welfare.that citizens can freely. civil servants. G. and it is not surprising that there seems to be the lack of enthusiasm of employers on this issue. Table 1 – De-commodification of workers in 1980* De-commodification score Australia 13. according to Esping-Andersen. Hence. thus in some respect it was like a vicious circle. but for a very long time it could hardly be said to have brought about much in social programs. the mere its presence does not necessarily mean its automatic utilization and therefore de-commodification. paid vacation and finally pension would be good examples of how de-commodification manifests today.21 5 Nowadays these academics. For instance. 1990. maternity and parental leave as well as educational leave. as the fear to lose a job and leave his family without any means of survival is usually bigger than fighting for universal principles. Germany was a pioneer in social insurance at Bismarck times. they are difficult to mobilize for a coordinated action.0 United States 13. Polity Press. who made a comparative cross-country analysis for eighteen developed OECD economies in 1980. Sick insurance and unemployment insurance. p. though it is also relatively limited. both in scope and application. and thus on work and employment. however. is compulsory state social insurance.8 New Zealand 17. without potential loss of job. The Three Worlds of Welfare Capitalism. opt out of work when they themselves consider it necessary 4. though this was not a primary rationale behind its creating.. When people completely depend on the market. but not always blue-collar workers and less educated personnel.5 Now. indirectly deviating from 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.0 Ireland 23.

p. it is visible enough that countries where strong labor unions have no waste cooperation with the regime. contribution period in years. in the end. fall close to the Nordic states. medium to high and high degree of commodification. In an attempt to explain this positioning of different countries. D.3 Sweden 39.e.Japan 27.1 Norway 38. countries tend to group into three normative categories: low to medium. however some of them like Belgium and the Netherlands. 7. the higher the degree of de-commodification De-commodification included three basic features of social protection: pensions. The Three Worlds of Welfare Capitalism.2 S.4 Denmark 38.1 France 27. de-commodification seems to be relatively low.8 Austria 31. 1990. This is the case for AngloSaxon nations where individualism and the market are superior to collective 6 Esping-Andersen.6 As seen from the table. The Anglo-Saxon nations are all concentrated at the bottom of the index. while the Scandinavian countries are at the top. Polity Press. the aggregate results were obtained.7 Finland 29. Sickness and unemployment programs include benefit replacement rates (net) for a standard worker during the first 26 weeks of illness/unemployment.2 Switzerland 29. Old-age pensions consider minimum pension benefits for a standard production worker earning average wages. i. Continental European states are located in the middle.. and the number of waiting days before benefits are paid. sickness and unemployment security. standard pension benefits for a normal worker.1 Belgium 32. G.4 Netherlands 32.37 . the number of weeks of employment required prior to qualification.5 Germany 27. and individual’s share of pension financing. where social democracy seems to play no major role.7 * The bigger the score.1 Mean 27.

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

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

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

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

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

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

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