The welfare mirage

The social-democratic model of the welfare state has never existed in Spain; nor, in decline everywhere, can it come to exist in the future. These propositions call for some explanation.

After World War II the welfare state as we know it began to take shape in countries such as Sweden and Britain. In a long period (1950-75) of growth with full employment, new social policies reflected the growing power of the working class. With time this might have transformed capitalism: the social-democratic ideology preached the welfare state as a road to socialism within democracy. But the owners of capital naturally resisted, particularly as full employment would necessarily involve social control of investment.

In the 1970s full employment disappeared and became from that time onward the mechanical hare that the greyhounds never reach. A new epoch began, that of post-Keynesian neoliberalism, which is still with us. If the financial system threatens to collapse, you resort to public money, but only to return as soon as possible to the only formula reputed viable: the freedom of the markets. Once out of the hole of adjustment, which means reducing the welfare state to minimums, growth will depend on expelling the state from the economic and social spheres where it does not belong.

The idea that a new world would emerge from the crisis has evaporated. The economic powers, which we now call markets, have imposed not only a liberal solution, but also the trust that growth will result from the elimination of obstacles constricting the markets, remedying unemployment, at least until the next crisis.

When in 1982 the Socialist Party came to power in Spain, the welfare state model was already on the way out elsewhere, while under Reagan and Thatcher neoliberalism was rapidly on the rise. Jumping from parlor socialism to neoliberalism, the Spanish socialists kept their distance from a model whose prestige was in decline. Their conversion reflected the belief that hard capitalism is the only system that creates wealth. The pie has to be cooked before you can share it out, there being no point in sharing out poverty, however equally. Unfortunately it was left vague exactly how the accumulated wealth was to be shared out. When we hear it said that tax cuts are a measure of the left (Zapatero), who can be surprised that social inequality has gone on rising under governments of left and right alike?

In the conviction that there is no alternative to capitalism, economy ministers of left and right are practically interchangeable. Perhaps the conversion has spared us some experiments that might have been ruinous, but one understands the indignation of many PSOE voters, and the recent surprise of many conservatives, as they see that there are no significant differences between the two major parties regarding how to climb out of the crisis. Other than for electoral purposes, why indeed do the Socialists cultivate their legend as a party that built a welfare state? In fact nobody in Spain has ever stepped outside the capitalist orthodoxy of the Bismarckian welfare state, where a few social benefits were thrown to the workers to quieten the murmurs of revolution.

The first battle to be waged now is an ideological one, dismantling one by one the dogmas of liberal capitalism. The two chief of these, held out to offer a glimmer of hope to a population condemned to a sudden drop in its living standards, are the ideas of economic growth, and the employment it will bring. The old question of economic growth is soon going to have to be reconsidered in light of the exhaustion of natural resources, the burgeoning of the world population and the greater participation of other continents in the high-consumption lifestyle, not to mention the complex dynamic by which automation, the information revolution and industrial relocation leads to an ever greater scarcity of jobs that do not require specific knowledge.