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Contradictions of the Welfare State
Claus Offe is one of the leading social scientists working in Germany today, and his work, particularly on the welfare state, has been enormously influential both in Europe and the United States. Contradictions of the Welfare State is the first collection of Offe's essays to appear in a single volume in English, and it contains a selection of his most important recent work on the breakdown of the post-war settlement. The political writings in this book are primarily concerned with the origins of the present difficulties - what Offe calls the 'crises of crisis management' - of welfare capitalist states. He indicates why in the present period, these states are no longer capable of fully managing the socio-political problems and conflicts generated by late capitalist societies and discusses the viability of New Right, corporatist, and democratic socialist proposals for restructuring the welfare state.The book also offers fresh and penetrating insights into a range of other subjects, including social movements, political parties, law, social policy, and labor markets. There is an interview with Claus Offe, prepared especially for this volume, and a substantial introductory chapter by John Keane which links the essays and explores Offe's central themes. This book is included in the series, Studies in Contemporary German Social Thought, edited by Thomas McCarthy.
304 pages, Paperback
First published April 24, 1984
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December 14, 2012
Claus Offe is counted amongst the second generation of thinkers working in the tradition of the Frankfurt School – Marxist academics for whom the production f alienated labour is the hallmark of capitalism but who are simultaneously pessimistic about the capacity of the working class for revolution.
This book consists of a series of essays published in academic journals mainly in the 1970s, with the most recent contribution being an interview between Offe and David Held and John Keane (the latter being the editor and author of a helpful introduction to this volume) which took place in 1982. Confined to this time span, the work can be approached as an example of the thinking about the welfare state which was taking place amongst Marxists prior to the pressures and transformations on its structures during the 1980s to the present day. How much of these subsequent developments were anticipated in the best of this work?
Keane sets the scene by describing ‘orthodox welfare state policies’ as ‘stimulating private investment, reducing unemployment, securing “national defence” and administering various social needs.’ Even in 1983 – the date of publication – it was possible to write that the post-war decades which had sustained the welfare state in Europe were giving war to a new period of uncertainty which had rising tensions in the field of international political stability and profitable economic growth at its heart. It was the emergence of these ‘crisis tendencies’ within the system which Offe insisted should be the basis of the dialogue between political and social science and the politicians and planners at the helm of the state.
For Offe the most deep-seated aspect of the character of the contradictions within the welfare state, and hence its tendency towards crisis, came from the fact that it is compelled to perform two different function which are incompatible – commodification and de-commodification. The dominant position of private capital in the arrangement means that the welfare state has to be organised in a way that does not challenge the profit-making imperatives of the capitalist firms, and indeed to positively support capitalist accumulation. This constraint is enforced by the power capital has to refuse to invest in the event that the state pursue policies of which it disapproves.
Yet in order to perform its basic function of producing order in society, the welfare state is required to intervene within social and economic processes to create, through non-market, de-commodified means, wider forms of integration which extend beyond the task of producing a disciplined, exploitation-ready workforce. For Offe the problem society has in producing this level of order comes in large part from the cyclical movements of capital as it adjusts to changes in market conditions, requiring it to dis-invest in historically industrialised regions, the inner-city, etc, leaving behind social problems which are experienced in collective terms. This is viewed as the ‘self-paralysing’ character of commodity production which, if left to itself, would erode the conditions or profitable investment across wide swathes of the economy.
To counter these tendencies the welfare state is force to confront its own self-limiting character – to act in ways which are subordinate to capital – by seeking to universalise opportunities for the exchange of labour and capital by de-commodifying these relationships. The promotion of investment and the sale of labour power depends on the state providing infrastructure and schemes for joint decision-making and social policy. This is the central contradiction of the welfare state according to Offe: the task is it obliged to take on is the reorganisation of the processes of capital accumulation, which requires a restriction on its most basic market mechanisms, but all in order to allow those mechanisms to spontaneously take care of themselves.
From this standpoint Offe makes the argument that the state does not automatically serve the interests of the capitalist class. This thesis, attributed to Lenin, is plausible during an historical period when capitalist expansion depended on occupying spaces when the remnants of pre-capitalist modes still proliferated. But in the late-modern period the continuation of accumulation is more likely to require strategies that all the private sector to shield and protect itself from the encroachment of the state.
From this core contradiction flow others. Foremost is the fact that state budgets continually expand, driven by the need for large investment projects, research and development, and increases in the cost of social overheads in areas like health, transport and energy systems. The borrowing and taxing capacity of the state, needed to finance these costs, infringes on the prerogatives of private capital. At this point his thesis comes close to the criticisms of neo-conservatives, viewing state spending as addictive, with power groups within the economic and socialisation sub-systems placing more and more demands on revenues. Centralised planning system appear to have poor control over the sub-sets of programmes and projects under their remit, with a return to the taxpayer to bailout localised budget crisis being a constant feature of the system.
Planning across the system is also poor, with private interests retaining the power to challenge and check progress in any direction. There are constant threats to the coherence and consistency of programmes as bottlenecks force reversals and question legitimacy. This resistance contributes to a surplus of failures over success in planning and the proliferation of unintended outcomes. The capacity to correct these and move in an evolutionary fashion to better quality decision-making and planning is limited by the fact that the welfare state cannot function in a self-consistence and comprehensive way. It is not a class conscious organ which arranges economic and socialisation subsystems to provide planned gains to selected beneficiaries at the expense of selected losers. In place of this strategic guide it is dependent on key stakeholders to achieve its objectives, which in turn reinforce the role of special interests in structuring the system.
There is also the problem of the legitimacy of the welfare state, in the sense of its ability to command the support of substantial groups in society of its methods and goals. This arises from the tendency of the welfare state to encroach on areas which had previously been the domain of ‘organic’ social organisation of a pre-capitalist nature. These currents resist the processes of commodification/de-commodification on the grounds of its infringement of a ‘naturalism’ which society is striving to return to. The loss of the prerogatives of possessive individualism are considered here, as the space which once existed for competitive males to engage with property in a struggle to achieve status and independence. The rise of the transfer principle, supporting the old, young, motherhood, the sick and the poor, disrupts the assumption that there is a correlation between effort expended in the competition to achieve and the rewards which are distributed by society.
Despite the enumeration of these layers of contradiction, Offe’s view is that the welfare state was not likely to be replaced by another organisational principle. It performs too many functions indispensable to the interests of both private capital and the social groups dependent on its services. To roll back the frontiers of the welfare state beyond a certain point would be to expose society to more of the ‘self-crippling’ tendencies of capitalism. For this reason the perspective that stretches indefinitely into the future is one of life at the permanent limits of the welfare state – neither advancing to the resolution of its contradictions nor transforming the conditions which gave rise to its necessity in the first place.
This leads Offe to a final discussion of the possibility of democratic socialist alternatives to the welfare state. He views this as possibility under the conditions of an alliance between sectors of the trade union movement and the new middle classes. What might be achieved is the reconstruction of the welfare state into an egalitarian welfare society, where needs would be determined through decentralised and publicly-controlled forms of social production and political organisation. The hope for progress along these lines, back in the 1980s, was constituted by the emergence of the new social movements – feminism, environmentalism, anti-militarism - which were then on the rise.
Throughout these essays Offe makes the argument both for the paralysis of the welfare state as a progressive form of social organisation and the prospect of it being transcended as long as capitalism accumulation is left in place with the ‘self-crippling’ modus of its own operandi. What he projects indefinitely into the future is the sense of turf wars between private capital and the state which move in a range of directions at different times, but which fail to generate a sustainable symbiosis between the principles of public and private interests.
The dimension largely left out of this discussion – noted by Keane – is the international context of tension and competition between nations, rather than those which take place within them. Globalisation as a concept was a decade and more away from the time when Offe developed these thoughts, and the challenge now must be to consider the implications of a world of ultra-mobile capital moving across regions where a plethora of different state forms exist, and the new levels of conflict and contradiction this is likely to generate for the welfare states of any one country. Whilst the immediate, pessimistic, observation might be that globalisation has increased the capacity of private capital to disinvest in anyone particular society, this has not produced a uniform outcome of the race to the bottom which had been predicted as the unavoidable outcome. Within the bowels of global capitalism contradictions are being worked out which generate leverage for arguments about the need for welfare policies and structures which support the risks which global workers are required to face as they secure they conditions of life for themselves in the new urban spaces and the workshops of the emerging nations.
The BRICs and the N-11 countries cannot be presumed to provide easy options for western capitalism firms keen to shuck off the responsibilities of supporting the cost of infrastructure and social goods in the mature economies. But whether developments here lead to the reproduction of the self-paralysing model of the welfare state of the industrialised North, or break out into the welfare societies Offe thinks might be possible, will depend at least in part on whether internationalism becomes a significant part of the social movements he has invested his hopes in.
This book consists of a series of essays published in academic journals mainly in the 1970s, with the most recent contribution being an interview between Offe and David Held and John Keane (the latter being the editor and author of a helpful introduction to this volume) which took place in 1982. Confined to this time span, the work can be approached as an example of the thinking about the welfare state which was taking place amongst Marxists prior to the pressures and transformations on its structures during the 1980s to the present day. How much of these subsequent developments were anticipated in the best of this work?
Keane sets the scene by describing ‘orthodox welfare state policies’ as ‘stimulating private investment, reducing unemployment, securing “national defence” and administering various social needs.’ Even in 1983 – the date of publication – it was possible to write that the post-war decades which had sustained the welfare state in Europe were giving war to a new period of uncertainty which had rising tensions in the field of international political stability and profitable economic growth at its heart. It was the emergence of these ‘crisis tendencies’ within the system which Offe insisted should be the basis of the dialogue between political and social science and the politicians and planners at the helm of the state.
For Offe the most deep-seated aspect of the character of the contradictions within the welfare state, and hence its tendency towards crisis, came from the fact that it is compelled to perform two different function which are incompatible – commodification and de-commodification. The dominant position of private capital in the arrangement means that the welfare state has to be organised in a way that does not challenge the profit-making imperatives of the capitalist firms, and indeed to positively support capitalist accumulation. This constraint is enforced by the power capital has to refuse to invest in the event that the state pursue policies of which it disapproves.
Yet in order to perform its basic function of producing order in society, the welfare state is required to intervene within social and economic processes to create, through non-market, de-commodified means, wider forms of integration which extend beyond the task of producing a disciplined, exploitation-ready workforce. For Offe the problem society has in producing this level of order comes in large part from the cyclical movements of capital as it adjusts to changes in market conditions, requiring it to dis-invest in historically industrialised regions, the inner-city, etc, leaving behind social problems which are experienced in collective terms. This is viewed as the ‘self-paralysing’ character of commodity production which, if left to itself, would erode the conditions or profitable investment across wide swathes of the economy.
To counter these tendencies the welfare state is force to confront its own self-limiting character – to act in ways which are subordinate to capital – by seeking to universalise opportunities for the exchange of labour and capital by de-commodifying these relationships. The promotion of investment and the sale of labour power depends on the state providing infrastructure and schemes for joint decision-making and social policy. This is the central contradiction of the welfare state according to Offe: the task is it obliged to take on is the reorganisation of the processes of capital accumulation, which requires a restriction on its most basic market mechanisms, but all in order to allow those mechanisms to spontaneously take care of themselves.
From this standpoint Offe makes the argument that the state does not automatically serve the interests of the capitalist class. This thesis, attributed to Lenin, is plausible during an historical period when capitalist expansion depended on occupying spaces when the remnants of pre-capitalist modes still proliferated. But in the late-modern period the continuation of accumulation is more likely to require strategies that all the private sector to shield and protect itself from the encroachment of the state.
From this core contradiction flow others. Foremost is the fact that state budgets continually expand, driven by the need for large investment projects, research and development, and increases in the cost of social overheads in areas like health, transport and energy systems. The borrowing and taxing capacity of the state, needed to finance these costs, infringes on the prerogatives of private capital. At this point his thesis comes close to the criticisms of neo-conservatives, viewing state spending as addictive, with power groups within the economic and socialisation sub-systems placing more and more demands on revenues. Centralised planning system appear to have poor control over the sub-sets of programmes and projects under their remit, with a return to the taxpayer to bailout localised budget crisis being a constant feature of the system.
Planning across the system is also poor, with private interests retaining the power to challenge and check progress in any direction. There are constant threats to the coherence and consistency of programmes as bottlenecks force reversals and question legitimacy. This resistance contributes to a surplus of failures over success in planning and the proliferation of unintended outcomes. The capacity to correct these and move in an evolutionary fashion to better quality decision-making and planning is limited by the fact that the welfare state cannot function in a self-consistence and comprehensive way. It is not a class conscious organ which arranges economic and socialisation subsystems to provide planned gains to selected beneficiaries at the expense of selected losers. In place of this strategic guide it is dependent on key stakeholders to achieve its objectives, which in turn reinforce the role of special interests in structuring the system.
There is also the problem of the legitimacy of the welfare state, in the sense of its ability to command the support of substantial groups in society of its methods and goals. This arises from the tendency of the welfare state to encroach on areas which had previously been the domain of ‘organic’ social organisation of a pre-capitalist nature. These currents resist the processes of commodification/de-commodification on the grounds of its infringement of a ‘naturalism’ which society is striving to return to. The loss of the prerogatives of possessive individualism are considered here, as the space which once existed for competitive males to engage with property in a struggle to achieve status and independence. The rise of the transfer principle, supporting the old, young, motherhood, the sick and the poor, disrupts the assumption that there is a correlation between effort expended in the competition to achieve and the rewards which are distributed by society.
Despite the enumeration of these layers of contradiction, Offe’s view is that the welfare state was not likely to be replaced by another organisational principle. It performs too many functions indispensable to the interests of both private capital and the social groups dependent on its services. To roll back the frontiers of the welfare state beyond a certain point would be to expose society to more of the ‘self-crippling’ tendencies of capitalism. For this reason the perspective that stretches indefinitely into the future is one of life at the permanent limits of the welfare state – neither advancing to the resolution of its contradictions nor transforming the conditions which gave rise to its necessity in the first place.
This leads Offe to a final discussion of the possibility of democratic socialist alternatives to the welfare state. He views this as possibility under the conditions of an alliance between sectors of the trade union movement and the new middle classes. What might be achieved is the reconstruction of the welfare state into an egalitarian welfare society, where needs would be determined through decentralised and publicly-controlled forms of social production and political organisation. The hope for progress along these lines, back in the 1980s, was constituted by the emergence of the new social movements – feminism, environmentalism, anti-militarism - which were then on the rise.
Throughout these essays Offe makes the argument both for the paralysis of the welfare state as a progressive form of social organisation and the prospect of it being transcended as long as capitalism accumulation is left in place with the ‘self-crippling’ modus of its own operandi. What he projects indefinitely into the future is the sense of turf wars between private capital and the state which move in a range of directions at different times, but which fail to generate a sustainable symbiosis between the principles of public and private interests.
The dimension largely left out of this discussion – noted by Keane – is the international context of tension and competition between nations, rather than those which take place within them. Globalisation as a concept was a decade and more away from the time when Offe developed these thoughts, and the challenge now must be to consider the implications of a world of ultra-mobile capital moving across regions where a plethora of different state forms exist, and the new levels of conflict and contradiction this is likely to generate for the welfare states of any one country. Whilst the immediate, pessimistic, observation might be that globalisation has increased the capacity of private capital to disinvest in anyone particular society, this has not produced a uniform outcome of the race to the bottom which had been predicted as the unavoidable outcome. Within the bowels of global capitalism contradictions are being worked out which generate leverage for arguments about the need for welfare policies and structures which support the risks which global workers are required to face as they secure they conditions of life for themselves in the new urban spaces and the workshops of the emerging nations.
The BRICs and the N-11 countries cannot be presumed to provide easy options for western capitalism firms keen to shuck off the responsibilities of supporting the cost of infrastructure and social goods in the mature economies. But whether developments here lead to the reproduction of the self-paralysing model of the welfare state of the industrialised North, or break out into the welfare societies Offe thinks might be possible, will depend at least in part on whether internationalism becomes a significant part of the social movements he has invested his hopes in.
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