Class Struggle Built the Welfare State

last highlighted date: 2025-01-08

Highlights

• Some argue that the main institutions of the welfare state are intact, and the deregulations and adjustments that have been carried out since about 1980 have basically been necessary in order to equip the welfare state for a new age.
• Others, including myself, hold the view that the welfare state has been put under immense pressure and attacks from strong economic and political forces.
• Let’s be clear: the quality and level of welfare services is a question of economic, social, and political power.
• The welfare state, however, was also the result of a very specific historical development which ended with an institutionalized class compromise.
• There were general strikes and lockouts, and the use of police and military force against workers was common. People were wounded and killed in these confrontations — this was prominently the case in Scandinavia, which is widely considered to be the most socially peaceful part of the world today.
• An important feature in the wider political landscape was the existence of a competing economic system in the Soviet Union and Eastern Europe. As historian Eric Hobsbawm pointed out, this was instrumental in making capitalists in the West accept the need to come to terms with labor. It is important to note that the welfare state was never an expressed aim for the labor movement before it was created. The stated aim, of course, was socialism. It was the fear of socialism that drove capital to concede — something which increased after the Russian Revolution but reached a height in the interwar period and the Second World War, as socialists and communists took prominent roles in the fight against fascism and a consensus in favor of social change developed across society.
• At this point, international capitalism experienced more than twenty years of stable and strong economic growth. This growth made it easier to share the social surplus between labor, capital, and the state or public sector.
• Perhaps no one better represented this tendency than Labour’s own Anthony Crosland, whose book The Future of Socialism claimed that “traditional capitalism had been reformed and modified almost out of existence.”
• It seems clear, in retrospect, that the capitalists better understood the nature of the social pact as a truce between warring factions rather than a partnership that could be sustained indefinitely.
• This led to the depoliticization of the labor movement and the bureaucratization of its leadership and staff. It became the historic role of unions and social democratic parties then to administer this policy of class compromise. Over time, each atrophied — transitioning from mass organizations for the working class into bureaucratic mediators between labor and capital. This represented the beginning of the end of social democracy’s heyday.
• The breakdown of the historic class compromise also led to a political and ideological crisis in social democracy. Alternatives did emerge from the Left: in 1971, Sweden’s LO trade union confederation proposed Löntagarfonderna, worker-owned funds which would take over a substantial portion of the stock of larger companies. In Britain, Tony Benn used his ministerial brief to pioneer worker cooperatives in failing companies, and then brought forward a more radical plan to democratize the economy.
• But perhaps the only place where there was an actual breakthrough was in France. In 1981, François Mitterrand won the presidential election and opted to govern with the Communist Party. Their programme commun had been developed in 1972 and reflected a left-wing response to the crisis of that decade: an increase in the minimum wage, a reduction of the working week, greater holidays, a wealth tax, and extended rights of workplace consultation for workers.
• Second, the ideology of the social pact was simply wrong. There can be different kinds of capitalism — but its fundamentals always remain. There cannot be democratic control of the economy, it cannot be crisis-free, the class struggle cannot end. These are written into the DNA of an economic system based on private ownership, the profit motive, and capital’s relentless desire to expand.
  • Note: summary of it
• in fact, through the 1990s, social-democratic parties achieved reforms that no right-wing parties could manage because of their ability to discipline labor.
• Left-wing policies presuppose a fundamental shift in the balance of forces in society. The main short-term aim of the labor movement today must be to limit the power of capital and to subject the economy to democratic control. This will not be achieved through social dialogue, partnership, pacts, compromise, or cooperation, but through class struggle and confrontation. The history of the welfare state shows us that power is never willingly relinquished by capital. It has to be pushed back.