The second congress was held in Santiago de Compostela and it was dedicated to :
" THE crisis OF THE WELFARE STATE"
Galician Association of Economic Studies of the Public Sector
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The second congress was held in Santiago de Compostela and it was dedicated to : " THE crisis OF THE WELFARE STATE" |
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Galician Association of Economic Studies of the Public Sector |
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| About the Association |
Introduction to the Congress |
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Few things are today more in question than the so
called “ Wellfare State”. In fact, we can see everyday how the
positions become polarized, even in a period with such similar
ideologies. On remembering the history of the “Estate of Providence”, it’s even funny to check how the ultraliberal criticisms seem to be just a copy of the arguments provided by those who got irritated when they knew about the government’s new dispositions to mitigate the hardship of the high rhythm of the industrial revolution. The unemployed were considered idlers, maybe an innate characteristic which had to be removed due to necessity. The poor weren’t far-sighted and no enterprising; and poorness came to be a punishment for laziness and incompetence. Interfering the verdict of the market by giving income to those people who get ill, are old or |
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unemployed would be similar to sabotage the only mechanism available to
compensate the merit. In short, the productive and enterprising
individuals would be punished to support the idler, with the well-known
result of reduction in productivity. These ideas may seem too
straightforward, but this was the way in which they were referred to
those days and today the echoes of them can be perceived in many
comments. Maybe it would not be necessary to resort to
Malthus, not even to the doctrines of social Darwinism to conclude that
in these extreme positions, the future of the less fortunate would be
strictly entrusted
to the private charity. In any case, until well into the 20th
century, a hard philosophy prevailed, combining Bentham’s
utilitarianism and the Manchesterian economy. The subsequent evolution
brought a quite different ideology and the State of Providence can be
considered as the institutional result of the adoption by the society of
a legal responsibility for the basic welfare of all its members. The expansion of the public services, the
progressive tax systems, the labour legislation, the legislation about
consumption, the minimum wage regulation, the aids for the
unemployed, for the disabled, etc. worked as the manifestation of
some social value judgements and were assisted by the triumphant theory
of Keynes, which turned to be the reference book in the aftermath of the
great depression. However, something is taking place in this
institutional frame, which causes fear from the point of view of its
stability and feasibility. The most paradigmatic example may be the
Swedish one. The global question repeated most is: Have today’s
economies the conditions needed to hold the levels of public expenditure
reached in the different Occidental States? Is it possible to keep the
internal composition of the total public expenditure? In a more concrete service, if we talk about
“health”, does the aim to guarantee the health services to all the
population, justify a general public cover, to the detriment of private
insurances for those with a higher income? Is it fair that those who
suffer from a poorer health have to pay higher premiums? Should we
systematically desert the improvident? Can we keep on supporting models
of the National Health Service with finance methods which cause bad
effects on saving and employment? Is the public production efficient on
assigning health services? Is the private production a perfect
alternative or just a complement? In the field of education, today everybody
considers that the public sector should favour the education of all the
citizens, in spite of the different levels contemplated in all stages-
primary education, secondary education or university. But, is it really
clear that the public production is superior to the private one?
In what sense? Is it fair, for instance, that University studies
are generally highly subsidized?. The state in almost every country, offers
help for the buying, renting or restoring of a house, since these are
considered to be prior goods. But does this aim get complicated due to
some specific features in the demand of housing or its market? Are
the great amount of subsidized loans, the renting control, the
tax incentive, etc adequate? Is enough attention paid to a strategic
variable as the control of the building land? We could also talk about some controversial
points in the field of the so called economic
benefits: the pensions programme-which is the most important one-,
the one of unemployment benefits, the one of temporary disability, of
the substitution of rents and the programmes aiming the reduction of
poverty (non-contributing pensions, some familiar aids, etc) After stating some of the most important
points in this debate, its necessary to ask ourselves some questions:
Are public pension plans meaningful for the saving generation?
Is it possible to compensate for that hypothetical reduction with
the so called “retiring effect” or “inheritance effect”, which
lead the individuals to be more far-sighted along their life? Are the
job openings affected negatively by the unemployment insurance? Finally, do the programmes helping the less
favoured create a poorness trap,
by generalizing the no-incentive in working and anchoring some walks of
society to poverty. As it can be seen, the inventory exposed
presents the core of the problems which defines the difficult situation
of the Estate of Providence today. But
there are things of a major intellectual importance: is a high extent of
redistribution compatible with the economic growth? Is this
compatibility simultaneous or “do we have to make the cake first and
share it later”? Although many of the aforementioned questions are
susceptible of a rigorous economic analysis, we are dealing with an
ideal field for
fundamentalisms. And so, while some practise rapprochements with an
unreal scope of general equilibrium, mixed with positive and non-critical
attitudes towards the market, others don’t find bounds to the
protective and distribution action of the estate of welfare.
Nevertheless, in the following pages a joint of reflections and analysis
will be made, whose reading will enrich the needed academic and
political debate around
some problems linked to a certain idea of the social relations, which
has come together with what many of us consider the relatively stable
progress of the occidental countries. Luis Caramés Viéitez |
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| Sponsored by | Speakers |
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Banco Bilbao Vizcaya