Rescaling welfare in an era of global competition

Scholars have tended to assume that social policies are national policies (Kazepov, 2010, p 35), with comparisons of national data dominating comparative analyses of welfare. This seems natural, since the ‘welfare state’ developed historically and conceptually within the frame of the ‘nation-state’, with policies ‘characterised by a collective management of individual standardised risks’ (Kazepov, 2010, p 42). States became the world's ‘social containers’, each national population being treated as ‘a cohesive social grouping that constituted a moral and practical social system’ (Taylor, 1994, p 156). As Keating (2009, pp 268–9) observes, T.H. Marshall's (1992) famous account of the development of citizenship, culminating with welfare states rooted in ‘social citizenship’, takes for granted that the nation-state is synonymous with the political, legal and social community.

Yet globalisation challenges some of these assumptions. The competition state thesis provides a nuanced account of the adaption of the welfare functions of the state in the face of intensified global competition, whereby the state has been reconfigured to sit at the ‘crossroads’ of global governance, transmitting the market discipline of the global capitalist economy within the borders of the national state (Cerny, 1997; 2010). A number of authors have observed the ways in which nation-states are increasingly enmeshed within more complex governance structures, ceding powers both ‘upwards’ to supranational institutions and ‘downwards’ to subnational levels of organisation (Hirst and Thompson, 1999). Pauly and Grande (2005, p 4) have observed the manner in which governance structures at all levels are becoming increasingly complex, leading to ‘multiple and overlapping hierarchies’. While states are now routinely enmeshed in a range of international and supranational organisations ‘above’ them, they may also have various incentives to loosen controls over subnational units of governance or areas of territory within or ‘below’ the state as a whole.

Keating (2001, p 53) highlights various strategies states that have traditionally used for managing their territories such that the competing claims of different populations and areas could be reconciled and the state's overall territorial integrity maintained.

On 23 June 2016, British citizens voted to leave the European Union (EU). Less than five months later on 8 November, American citizens elected Donald Trump as the President of the United States of America (USA). A consensus quickly emerged that both votes represented a reaction against ‘globalization’ by ‘dispossessed’, ‘left behind’ population segments (Harris, 2016). Guy Ryder, the director general of the International Labour Organization (ILO), called it ‘the revolt of the dispossessed’, arguing that: ‘The societies we all live in are distributing the benefits of globalisation and economic processes extraordinarily unfairly and people think they are getting a raw deal’ (cited in Allen, 2016). The consensus also identified ‘global elites’ as the target of this vote of dissatisfaction (although in some of the right-wing media coverage this was cleverly repackaged as a rejection of an undefined ‘liberal elite’, thus implying a rejection of ‘liberal’ politics rather than the inequalities associated with neoliberal globalisation). President Barack Obama, for example, observed that: ‘When we see people, global elites, wealthy corporations seemingly living by a different set of rules, avoiding taxes, manipulating loopholes … this feeds a profound sense of injustice’ (cited in Smith, 2016).

There are clearly idiosyncratic aspects of each vote. In the UK, for example, a deeply Eurosceptic national press sustained a discourse over a number of years prior to the referendum, in which the EU was portrayed overwhelmingly as a foreign threat to British sovereignty rather than as a common European project (Hawkins, 2012). The complexities of EU membership, let alone those pertaining to an exit process, were never properly explained to the British electorate. Furthermore, while Trump has promoted deeply protectionist politics in the USA, the dominant discourse in the UK has been one of the need for continuing liberalised trade outside of the EU (albeit without free movement of people). While recognising these specificities, however, it seems credible that both votes reflect a deep dissatisfaction among particular population groups with the outcomes of neoliberal globalisation. These outcomes are simultaneously economic, social, political and cultural, and it is difficult to disentangle the interaction between these elements, especially since they may not be separated in the minds of voters themselves. The perceived impact of immigration was a key element in both cases.

Introduction

Never let a good crisis go to waste. That would seem to be the logic of the Conservative-led Coalition which, having come to office in May 2010, has embarked on a profound restructuring of the welfare state and the public sector more broadly. While there is much continuity with previous New Labour policy, there are important differences and the scale of change envisaged is substantial. Public expenditure across the board is being drastically reduced and the welfare system reshaped. Citizens are being left to rely more on themselves and an ambiguously defined ‘Big Society’, while being required to demonstrate that they are sufficiently ‘responsible’. The context that is being used to justify all this is the need to reduce the huge public sector debt resulting from the bailout of the financial industry and New Labour's Keynesian response to the economic crisis which began in 2007. Yet these changes entail something far more than what is necessary simply for deficit reduction; they will leave a structural legacy for the welfare state that will endure well beyond this Parliament, and involve a very particular view of where the balance of sacrifice and responsibility should lie.

This issue of Social Policy Review casts a critical eye over many of the reforms being advanced by the Coalition government. In doing so, and given the profound long-term importance of these reforms, we have breached tradition by merging the first two sections of the Review into one extended symposium. We are acutely aware that the delay between the writing and publishing of a volume like this leaves a time lag during which events will inevitably have progressed; if a week is a long time in politics, a few months is an eternity during a crisis. Yet we are satisfied that we have gathered here a range of incisive contributions which provide analyses of the ideas, evidence, continuities and breaks relating to the government's evolving reforms that will continue to be essential reading for some time.

We start with an overview of Conservative social policy by Hugh Bochel in Chapter One, which sets the context by examining the development of Conservative Party social policy while in opposition and the challenges posed to the Conservatives by New Labour governments.