Table Of ContentStudies in Economic Ethics and Philosophy
Series Editor Editorial Board
Peter Koslowski F. Neil Brady
James M. Buchanan
Richard De George
Jon Elster
Amitai Etzioni
Gerard Gafgen
Serge-Christophe Kolm
Michael S. McPherson
Yuichi Shionoya
Philippe van Parijs
Springer
Berlin
Heidelberg
New York
Barcelona
Budapest
Hong Kong
London
Milan
Paris
Santa Clara
Singapore
Tokyo
Studies in Economic Ethics and Philosophy
P. Koslowski (Ed.)
Ethics in Economics, Business, and Economic Policy
(out ofprint)
192 pages. 1992
P. Koslowski· Y. Shionoya (Eds.)
The Good and the Economical
Ethical Choices in Economics and Management
(out ofprint)
212 pages. 1993
H. De Geer (Ed.)
Business Ethics in Progress?
124 pages. 1994
P. Koslowski (Ed.)
The Theory ofEthical Economy in the Historical School
345 pages. 1995
A. Argandoiia (Ed.)
The Ethical Dimension ofFinancial Institutions
and Markets
264 pages. 1995
G.K. Becker (Ed.)
Ethics in Business and Society.
Chinese and Western Perspectives
232 pages. 1996
P. Koslowski
Ethics ofCapitalism and Critique ofSociobiology.
Two Essays with a Comment by James M. Buchanan
153 pages. 1996
F. Neil Brady (Ed.)
Ethical Universals in International Business
255 pages. 1996
Peter Koslowski
Andreas F011esdal (Eds.)
Restructuring
the Welfare State
Theory and Reform of Social Policy
With 6 Figures
and 13 Tables
" Springer
Professor Dr. Peter Koslowski
Forschungsinstitut fur Philosophie Hannover
The Hannover Institute ofPhilosophical Research
GerberstraBe 26
D-30169 Hannover, Germany
Dr. Andreas F011esdal
ARENA, Advanced Research onthe
Europeanisation ofthe Nation-State
P.O. Box1143, Blindern
N-0317 Oslo, Norway
CataJoging-in-PublicationDataappliedfor
Die Deutsche Bibliothek- CIP-Einheitsaufnahme
Restructuringthewelfarestate: theoryand refonnofsocial
policy; 13 tables/ PeterKoslowski; Andreas F011esdal(ed.).
Berlin; Heidelberg; NewYork; Barcelona; B':Idapest ;Hong
Kong; London; Milan; Paris; SantaClara;Smgapore ;
Tokio: Springer. 1997
(Studies ineconomicelhicsandphilosophy)
ISBN-l3:978-3-642-64494-8
NE: Koslowski. Peter[Hrsg.J
ISBN-13:978-3-642-64494-8 e-ISBN-13:978-3-642-60652-6
DOl: 10.1007/978-3-642-60652-6
Springer-Verlag Berlin Heidelberg New York
Thisworkis subjectto copyright. All rights are reserved, whether thewholeor
part ofthe material is concerned, specifically the rights oftranslation, reprint
ing,reuseofillustrations,recitation,broadcasting,reproductiononmicrofilmor
in anyother way, and storagein data banks. Duplication ofthis publication or
parts thereofis permitted only under the provisions ofthe German Copyright
LawofSeptember 9, 1965, in its current version, and permission for use must
always be obtained from Springer-Verlag. Violations are liable for prosecution
undertheGermanCopyrightLaw.
4>Springer-VerlagBerlin·Heidelberg1997
Softcover reprint of the hardcover 1st edition1997
The use ofgeneraldescriptive names, registered names, trademarks, etc. in this
publicationdoes notimply,evenintheabsenceofaspecificstatement,thatsuch
names are exempt from the relevant protectivelawsand regulations and there
forefreeforgeneraluse.
HardcoverDesign:ErichKirchner,Heidelberg
SPIN10546642 4212202-5 4 3 2 10- Printedonacid-freepaper
Preface
The volume at hand contains the proceedings of the conference
"Restructuring the Welfare State: Ethical Issues of Social Policy in an
International Perspective" held with the support of the Stiftung
Forschungsinstitut fur Philosophie Hannover at the Forschungsinstitut fiir
PhilosophieHannoverinHanover,Germany,onSeptember8-10, 1995.
Several of the papers in the volume have been read at the Fourth
International Conference on Ethics in the Public Service at Stockholm,
Sweden, on June 15-18, 1994, organised by Hans De Geer and Gunilla
SilfverbergattheSwedishFAInstitute.
Theeditors wish to thank the organisers, participants and speakers ofthe
Stockholm and Hanover conferences. They are also grateful to Anna Maria
Haukfor the smooth handling ofthe Hanoverconference, to Guttorm Aanes
and Simen Brrein for their assistance in preparing the manuscript, and to
Peggy Simcic Brl/lnn for the valuable and professional management of the
manuscript.
Osloand Hanover,October 1996
AndreasFl/lllesdal PeterKoslowski
Table ofContents
v
Preface
RestructuringtheWelfareState: Introduction
PETER KOSLOWSKI .....•............••.....•.....•........•....•..••...•................. 1
PartI.
TheWelfareStateUnderSiegeinWestern Europe
1. IstheBritishWelfareSystemSustainable?
FRANCESCAIRNCROSS 9
2. Is theWelfareSystemofthe NetherlandsSustainable?
KEESSCHUYT 21
3. Is theGermanWelfare StateSustainable?
DIETHER DORING 38
PartII.
TheSocialSecuritySystemin theEastCentral European
NationsofTransitionand inJapan
4. ThePrincipleofSubsidiarityandtheTransitionofthe Welfare
States inCentraland EasternEurope
TIBORCZEH 65
5. TheSocialSecuritySystem inJapan
YOSHIFUMI FUSHIMI 83
PartIII.
TheRiseofthe WelfareStateinHistoryandTheory
6. StateandCitizenshipin the AgeofGlobalisation
PETER BALDWIN 95
7. Originsofthe «Social State» inGermanPhilosophyand
«Staatswissenschaft»
STEFANKOSLOWSKI.. 119
PartIV.
CurrentProblemsoftheWelfareState
8. DoWelfareObligationsEndattheBoundariesof
theNationState?
ANDREASF0LLESDAL 145
9. MeetingNeedsVersusRespectingAutonomy
DilemmasoftheWelfareState
ELISABETHLILIA 164
10. ForwardtotheNineteenthCentury:
HasGrowingOldGracefullyBecomeaLuxury?
PETERCURWEN 182
11. TheUnpaid WorkofMothersandHousewives
in theDifferentTypesofWelfareStates
ANNEKEVONDOORNE-HUISKES 203
12. SocialRights inaGenderPerspective
ARNLAUGLEIRA 222
13. DoestheWelfareStateDestroy theFamily?
MICHAELOPIELKA 238
PartV.
TheoryandCritiqueoftheWelfareState
14. TheJustificationofWelfareRights
PERBAUHN 277
15. Risk,JusticeandSocialPolicies
SERGE-CHRISTOPHEKOLM 289
16. Sweden: Towardsa21stCenturyPost-Modern
People'sHome?
SVENE.OLSSONHORT 322
17. TheSocialStatein thePost-Modern
PETERKOSLOWSKI 337
Conclusion
18. OntheMoralFoundationsoftheWelfareState
ThreeResearchProgrammes
PHILIPPEVAN PARIJS 383
AbouttheAuthors 393
IndexofNames 395
VIII
Restructuring the Welfare State
Introduction
PETER KOSLOWSKI
I. AreWelfareStatesSustainableatthePresentHigh
DegreeofBenefitsandPublic"Insuredness"?
II. ArePrivateInsuranceProgramsBetterthanSocial
SecuritySchemes?
III. WhyDoStrongWelfareStatesExistintheNorth
WesternPartofEuropeandnotinOtherPartsof
theWorld?
IV. DoestheEuropeanisationoftheNationStateEnforce
theEuropeanisationoftheWelfareStateand
TherebytheDown-SizingofSocialSecuritySystems
inEurope?
Thedebateabout the welfare state inEurope hasenteredastage whereit
is not anymore the question whether the welfare state in the industrialised
countries ofEurope should be modified or not but how it could be restruc
tured. The costs and financing problems of social security have shifted the
emphasis in the discussion from questionsoflegitimacy as well asextension
and reform of the welfare state to questions of its survival. Questions of
legitimacy and questions of adaptation for survival can, however, not be
completely separated since deficits in legitimacy very often point to short
comingsinconstructionas well.
In this introduction four questions are formulated thatguided the investi
gationofthevolumeathand.
I. Are WelfareStatesSustainableat the PresentHigh Degree
ofBenefitsand Public"Insuredness"?
The current problem in the European welfare states is not the question
whether welfare states are sustainable at all. There seems to be consensus
thatsomedegreeofsocial insuranceisdesirable. Rather, thequestion is how
the welfare states instituted after World WarIIaresustainable at the present
high degree of insuredness of the population. This question in turn is not
PETERKOSLOWSKI
only aquestionas to the financial meansand funds ofthe national insurance
systems, to the financial provisionfor the social security system. More inter
esting is the question whether the social insurance systems ought to be ~us
tained in theirpresent institutionsalthough they create illusionsamongst the
insuredabouttheirwealthandtheirsocialandeconomicwelfare.
Thequestioncan be putthis way: The financial costsofthe welfare state
have two causes. The first cause is the increased international competition
and reduced wealth of the Western nations that cannot afford the former
degreeofsocial benefitstheyhavegrown used to. Ifthis isthecase thecrisis
ofthe welfarestateisacrisisofdown-sizingand unavoidable.
The question more interesting toeconomics and social philosophy is the
question whether the welfare states we are used to are inherently prone to
create illusionsamongst the peopleabout theirreal wealthand whetherthese
illusions can be reduced by a change ofeconomic organisation and of the
design ofthe institutionsofsocial security. This problem is discussed below
underthe heading of"welfarestate illusion": Is there anelement inherent in
the welfare states that creates illusions about the actual state ofthe people's
wealth in regard to theexpectedfuture paymentsforpensionsand tothestart
ofretirementage?
The welfare state makes the promise to pay to its citizens a pension at a
certain retirement age. Ifit is not able to keep this promise the plans ofthe
individualsareseverelychangedand theirlife plansdistorted. Sincethe indi
viduals made the plans about their wealth creation and their distribution of
wealth over the life cycle under the assumption that they will receive the
pension paymentspromised by the welfare state there life plansaredistorted
considerably ifthe welfare state cannotfulfil these promises. Afar reaching
misallocationofresourcesoverthe lifecycledue to illusionsabouttheactual
wealthsituationwill betheconsequence.
The question can beclarified by an analysisofthe Gennan welfare state.
The German welfare state is notedfor its robustness: Itcan adopt tochanges
ofthe economic parameters by an adaptation ofthe parameters ofthe social
security system. Ifthe amount ofthe contributions to the system decreases
due toeconomicrecession the social securitysystemcanreactbyalaterstart
of retirement, by an earlier start of employment in younger years or by a
lowerlevel ofwelfare benefits. By changing these parameters the system, in
theory, willalwaysfind toanewequilibrium.
Thefinancial equilibriumofthesocial securitysystem,however,does not
mean that the expectations and plansofthe individuals being insured in this
systemare inequilibrium.The robustness ofthe system mightbe very costly
2
INTRODUCTIONRESTRUCTURINGmEWELFARTESTATE
in tenusofadisappointmentoftheexpectationsofthosebeing insured in the
system. Even ifthe macroeconomic contributions/payments ratio is in equi
librium the individual economic plans that people made for their life are in
utter disequilibrium since they made these plans under very different
assumptionsabouttheirwealthsituationthan theone that is becomingreality
in the payments of the social security system. The social insurance system
mightbe over-robust, too robust to respond to thedifferentiated needsofthe
individuals.
II. ArePrivate Insurance Programs Betterthan
Social Security Schemes?
As a remedy to the present high costs ofthe welfare state, the return to
more self-reliance and reliance on private insurance systems is recommend
ed. The politics ofThatcherism in the United Kingdom argued for a privat
isationofsocial security notprimarily becauseofarguments offinancial cri
sis butforargumentsofthe valueofself-relianceand forargumentsofmoral
hazardinthesocial insurancesystems.
In 1983, Icontended myself that the welfare state due to its anonymity
and robustness of its schemes weakens the ethics of self-responsibility and
self-reliance and decreases the propensity ofthe individuals to a responsible
conductoflife.
The experience of Thatcherism and of the privatisation of social insu
rance is, however, that problems ofmoral hazard are also present in private
insurancesystems. The transparencyon the behaviourofthe individual in its
attitude towardsrisk and inhisorherchangeofhabitsafterbeing insuredare
alsoeffective in private insurance systems. These private insurance systems
are also anonymous and do not have the size at which the "large number
problem" (James M. Buchanan) does not apply. The large number problem
arises where people act in large groups in which they cannot control their
behaviour and their adherence to the rules. Only very small groups have no
"large number problem". The question is, therefore, whether there is really
an inherent superiority ofprivate insurance oversocial security in respect to
moral hazard and to the otherproblems ofchange ofbehaviourtowards risk
whenpeopleare insured.
3
