Universal social security and the stability imperative

The post-war European welfare state represents an unprecedented historical achievement. As Fritz Scharpf (2003: 5) puts it, never before in history 'has democratic politics been so effectively used to promote civil liberty, economic growth, social solidarity and public well-being'. Almost all Western European countries introduced sweeping social reforms in the 1940s and 1950s. Basic systems of universal social security were developed that included effective policies to combat poverty, social insurance to protect people in the event of illness, disability, unemployment, or old age, and high-quality provisions of healthcare, housing, and education to encourage equality of opportunity. The main objective of the post-war welfare state was to provide social security. A full range of income transfer programmes—unemployment insurance, workers' compensation, disability benefits, old age pensions, survivors' benefits, children's allowances, and social assistance, financed largely out of progressive taxation and/or social contributions from workers and employers, were introduced to protect citizens from the social risks associated with modern industrialism.

Modern social security has its roots in late nineteenth and early twentieth- century poverty relief and social insurance legislation, but the experience of the Great Depression and the Second World War were pivotal in shaping European welfare states after 1945. After the Liberation, Western Europe was in dire need of a new social contract. A profound consensus emerged around the need for social and economic reconstruction, which triggered a sequence of social policy innovation that lasted until the 1970s. Justified in terms of nation-building, the hegemony of reform-oriented social democracy in the Scandinavian countries, and the predominance of Christian democracy with its organic conceptualization of social order in Austria, Germany, the

Netherlands, and Belgium, provided propitious ideological bases for welfare state expansion in the 1950s and 1960s.

With the memory of the Great Depression fresh in mind, policymakers from all political persuasions found that the public sector had a key role to play in 'taming' the capitalist economy, through a wide range of regulatory, redistributive, monetary, fiscal, and social conflict management institutions. The post-war welfare state fundamentally redrew the boundaries between politics and economics. The extent of public intervention differed from one country to the next, but all advanced democratic governments assumed an active and strategic role in the economic management of the mixed economies of post-war Western Europe.

The defining feature of the post-war welfare state was that social protection came to be firmly anchored in the explicit normative commitment of granting industrial and social rights to workers and citizens, on a par with liberal and democratic rights (Esping-Andersen, 1994: 712). The pre-war practice of charity was replaced by the logic of social citizenship. In his seminal 1950 essays, Citizenship and Social Class, the British sociologist T. H. Marshall (1963: 74) described social rights as,'... the whole range from the right to a modicum of economic welfare and security to the right to share to the full in the social heritage and to live the life of a civilized being according to the standards prevailing in the society'. Marshall understood modern social policy as the use of democratic 'political power to supersede, supplement or modify operations of the economic system in order to achieve results which the economic system would not achieve on its own' (1963: 15). Social rights are status rights, in the sense that they do not have to be earned. Gosta Esping-Andersen (1990: 3) aptly tagged the political protection against economic risks as 'decommodification', defined in terms of 'the degree to which individuals, or families, can uphold a socially acceptable standard of living independently of market participation'. The guarantee of basic access to social protection and provisions of education and primary healthcare, made available to the population at large as a universal 'right', forced policymakers to expand the size of government, implement progressive taxation, and to make the best use of public resources and techniques in order to achieve greatest social benefits at the lowest economic costs.