Introduction

In a series of papers, political scientist Paul Pierson sought to answer the question of
why welfare states remain so resilient in the face of retrenchment efforts, that is, why
big-spending almost socialist welfare states of Western Europe remain so strong despite
attempts within their governments to cut spending on social programs. His answer
pointed to blame avoidance among politicians: if politicians make welfare state reforms
they run the risk of not being reelected due to the tremendous unpopularity of cutbacks
on social programs.

Elinor Scarbrough’s article, Western European welfare states: The old politics of retrenchment,
attempts to rebut Pierson’s argument. She discusses what she thinks is Pierson’s major
flaw: his claim that welfare state retrenchment politics cannot be explained at all in
terms of original welfare state expansion. Scarbrough argues the opposite instead,
claiming that scaling back the welfare state is difficult on account of much of the same
pressures that led to the emergence of welfare states.” She focuses first on welfare state
theories, then on empirical evidence about the political forces involved in welfare state
policymaking. She summarizes it best on page 227: “The common thrust of the
arguments is that the constellation of societal problems and political forces that shaped
the fundamentals and expansion of welfare states also shape the politics of
retrenchment, putting radical reform beyond the grasp of governments.”

Theories of the Welfare State

All three of the following theories point to the reasons why welfare states exist, that is,
why government intervention in the condition of its people ever even arose. Scarbrough
then takes contemporary developments in society and compares them to these theories.
They are the logic of industrialism, the crisis of capitalism, and nation building.

1. Logic of Industrialism
This perspective suggests that the welfare state is both necessary and possible as a
result of industrialization.

First, the industrialism theory claims that the welfare state exists because it is necessary.
With mass industrialization after the Industrial Revolution came mass urbanization,
individual and family mobility, the individualization of households, and dependence
on wage labor. These factors caused a change in traditional social institutions and left
only those in the labor force successful – as the family, churches and guilds as social
institutions were no longer able to meet welfare needs, this meant that the young,
unemployed, sick and disabled and elderly needed protection. Thus, the welfare state
emerged to replace those archaic social institutions. In addition to this, the theory claims
that the welfare state is possible as a result of industrialization. Industrialization after
the Industrial Revolution generated an economic surplus for use by the government in
advancing societal wellbeing and government efficiency.

Pierson argued that the reasons for the emergence of the welfare state have nothing to
do with the politics of retrenchment. But as Scarbrough points out, the situation in
Western Europe from the viewpoint of the logic of industrialism theory is no different
now that it was when the welfare state emerged.

Western Europe is highly urbanized and is predicted to become even more highly
urbanized. Urbanization has grown from in Western Europe 1975-1995 and is projected
to grow at a higher rate through 2015. One-quarter to one-third of populations of the
European Union live in large urban concentrations. Also, many urban areas in
northwest Europe are losing population which is not compensated for by suburban
growth, leading to urban decay and typical inner-city problems. The populations left
behind typically face the problems of poverty, deprivation and social exclusion. These
trends perpetuate the need for welfare states.

The “second demographic transition” away from the typical family social structure
which has been occurring since the 1960’s also perpetuates this need. Household sizes
are declining and single-person households are rising. Divorce rates and cohabitation
rates are rising, as is the number of single-parent households and lifetime childlessness.
Three-generation households are no longer the norm as people live longer lives and
living standards increase—this explains the population of elderly people living alone. In
addition to three-generation households, childcare is affected by the widespread and
rising entry of women into the labor market.

The dependence on wage labor has also perpetuated the need for welfare states.
Unemployment in Western Europe from the 1970’s has risen inexorably which
contributed to large public spending in the 80’s and 90’s. Dynamic, flexible, high-
technology economies of today are accompanied by rising part-time and temporary
employment. Also, these economies offer little social protection to and cause long-term
unemployment of low-skilled workers. The growth of outsourcing, franchising, and
working-at-home similarly leaves workers unprotected. Also, for 50% of those in
Western Europe who lose full-time jobs, they will re-enter the workforce in a part-time
job, denoting a shift from good to bad jobs.

Some argue that retrenchment is the only option available to Western European welfare
states because the costs of programs are no longer affordable and big government is no
longer manageable. However, as Scarbrough points out, Western European welfare
states are still possible by the view of the logic of industrialism argument. Western
European economies have grown overall and year-to-year since the 1980’s.
Retrenchment efforts, therefore, cannot be rooted in failing national prosperity.
Some counter-claim that citizens of Western Europe have become averse to high
taxation rates and their shift to more moderate rates is what explains their economic
growth. However, Scarbrough shows through polls that there is an overall support for
the redistributive and service activities of welfare states. Most in Western Europe
actually support extending expenditures on welfare services and desire progressive
taxation and the reduction of income differences.

Others counter-claim that big government is unmanageable and point to instances of

budgetary constraint and administrative reorganization among welfare states.
However, these shifts just represent a change from centralized government to more
localized administration of welfare activities and oversight.

2. Contradictions of Capitalism
This theory suggests that welfare states originated in efforts to mediate the inherent
contradictions of capitalism and democracy; to ensure favorable conditions for capital
formation and protect society from class conflicts caused by that formation.

Unemployment in Western Europe runs rampant, averaging 11 percent in the mid-

1990’s. Retrenchment is advocated to reinvigorate the economic growth necessary to
reduce that unemployment. However, it is governments which are responsible for
fueling that growth by delivering the appropriate economic environment (labor with
appropriate skills, fiscal policies ensuring work incentives, appropriate regulatory
institutions) and for absorbing externalities (regulation of social order, public policies to
offset the social costs of industrial restructuring, raising levels of human capital). This
suggests that more government involvement is necessary, not retrenchment.

Even after imposing market economies in Europe in the post-Soviet Era, there was
much instability, fear of economic depression and then a call for regulation of financial
markets following economic crises of 82, 87, 94-95, 97-98. Action agreed between the G7
governments staved off economic collapse following these economic crises, which
testifies to the fact that markets cannot sustain viability in the long-term.

On the question of globalization, some argue that increased internationalization of trade

and investment limits government’s ability to intervene in national economies for social
purposes and forces them to favor big business rather than social welfare. However,
Scarbrough counters that globalization is a historically recurring and temporary
phenomenon. She begs us to look at the inter-war period which resulted in economic
collapse because of the market, and then a return to a welfare state. Also, she points out
that if a government’s social policy secures free trade to make society more prosperous,
then that government is just as interventionist as during welfare expansion. Welfare
expansion, as this crisis/contradiction of capitalism theory points out, emphasizes the
importance of the government as managing conflicting interests between capital and
labor which mark retrenchment objectives.
3. Nation-state building
According to this state-centered perspective, West European welfare states grew not out
of societal pressures or mass political mobilization, but from bureaucrats’ strategies to
integrate the workers into the capitalist economy and the national state. Social
protection, under this theory, takes impersonal, rational and legal form, making social
protection a matter of rights. To secure the legitimacy of the nation-state after World
War II, West European democracies’ bureaucrats created the welfare state by securing
social and political incorporation. This ties citizens to the state and to one another.

It is said that international and supranational organizations, like the European Union,
strip state institutions of authority. Also, internationalization of trade has undermined
the state as an actor to manage national economies with social goals in mind.
Scarbrough quickly dismisses these arguments, rebutting that international and
supranational institutions are sanctioned by and entered into by the authority of
national governments – no outside actors are involved in these decisions. Thus,
jurisdiction always remains with the state. Furthermore, however readily globalization
spreads, controls over social policy still remain national – even in the European Union
where free trade is the most advanced, member nations are visibly hesitant and
unwilling to transfer social policy tasks to the EU.

Even though the welfare state was never founded out of democratic politics,
Scarbrough notes that overwhelming majorities of people support and expect extensive
government intervention in social and economic life. The nation-building theory
imposes a contract and moral obligation on the state to provide social protection as a
right of the people. Retrenchment is thus seen as an attempt to dismantle this sacred
contract and instead as an attempt to strip away the rights and citizenship claims of
welfare state citizens.

In summary of the Theories section, Scarbrough effectively shows that Pierson’s claims
are incorrect—the major theories advanced to explain the arrival or the welfare state
does offer compelling insights on why retrenchment objectives are hard to achieve.
These theories provide adequate evidence to suggest that state intervention in Western
European societies to ensure security and equity among its citizens remains central to
societal cohesion and political order.

Empirical Claims

Empirical claims focus on discovering the institutional reasons for welfare state
development. Scarbrough examines three forces: trade union strength, left-party
strength, and traditions of state government. She argues directly against Pierson who
claims that retrenchment politics is different from the politics of expansion and that
lefty-party and trade union strength does not impact welfare state outcomes anymore.
1. Trade Union Strength
The general claim is that welfare states emerged as a strategy to incorporate the politics
of class conflict associated with industrialization, pushed by trade unions, which united
a consciousness of common interests, mobilized support from the leftist parties, and
negotiated with employers and the government.

As Scarbrough points out with evidence in tables, there is no general declining union
density in Western Europe. Despite its decline in a few countries, it has risen in others.
Even where density seems to steadily be declining, the total number of union members
has generally increased. Where density has declined among men, it has increased
among women. This rise suggests that trade unions are becoming more adapted to the
needs of women and temporary and part-time workers. Some of the most active trade
unions are even opening their doors to those who have no stable employment or job at
all.

There is more to trade unions than their numbers and density though: despite declining
numbers density-wise in France, the country was brought to a halt in 95 as a result of
union-organized protests against government reforms of social security and public
sector pensions. Examples of this can be found all over Europe. In 1999 in Sweden, tax
cuts after a government surplus were abandoned in favor of increased spending on
health care, social services, and education. All of this can be attributed to trade union
pressure. Tax cuts and welfare reform were also abandoned in Germany in 1992 for the
same reason.

Despite Pierson’s claims that the power of organized labor in Europe has shrunk, trade
unions have demonstrated considerable success in Western Europe and have protected
their members’ interests against government efforts to redraw boundaries of the welfare
state.

2. Left Part Strength

The strength of left parties, whether in government or a pressure on governments, also
emerges from empirical research as a stimulus to welfare state development.

Despite claims to the contrary, leftist parties are not in decline across Western Europe.
Support for the left in the 70’s decreased, remained steady in the 80’s and then rose
during the 90’s whereas support for the rightwing parties decreased substantially,
especially since the 80’s.

Pierson also argues that new political actors, rather than parties, have hurt
retrenchment efforts, such as client groups, public services providers, and public
interest organizations. Scarbrough claims though that the only example of an effective
organization of any of these groups other than trade unions is the United States’
American Association of Retired People. The other groups have little to no influence, as
they are poorly organized and funded. Some service providing agencies in Britain are
actually funded by the government and can thus be easily considered “instruments of
the state.”

3. Traditions of State Governance

Welfare states embody norms about the relationship between the state and its citizens,
and also have a great impact on the lives of their citizens. In short, this empirical
argument says that citizens are basically used to the welfare state. It defines their own
identities. People within a welfare state look for the state to deliver them from
insecurities and justify this in the name of many moral principles—liberal, social
democratic, and corporatist/Catholic values. The extended role of the state is basically a
tradition in the welfare state countries. To fracture the bond the state has with people
would be to trample over the sacred contract they have had with it for many years.
These states have provided most of their citizens with a degree of security and have
shaped opportunity structures for individuals and families by manipulating labor
markets, social relations, and political alliances. Re-engineering institutional structures
after disembodying a welfare state would be difficult too. What would replace the
services that people are used to getting? Too many people expect the state’s
intervention to overthrow the welfare state.

Discussion questions
1. Is it an effective argument to say that with globalization and supranational
organization that the state still retains all of its authority? If a trend exists in a
state to give private organizations more power, the government will be less able
to repeal the laws without opposition which allowed that trend to occur. Just
because the state sanctions a measure does not mean that it still retains control.
2. Although the United States’ streets are supposedly lined in gold as it is the
richest country in the world, Western European welfare states have less poverty
than the United States and a more equal distribution of income. Is this more
admirable? Does it make democracy more effective?