6PAS99.VP:Corelventura
JONAHPOLITICS D. &LEVY SOCIETY Vice into Virtue? Progressive Politics and Welfare Reform in Continental Europe JONAH D. LEVY For over half a century, the development of the welfare state has served as the principal means by which left-progressive governments have reconciled the pur- suit of efficiency with the pursuit of equity. From a Keynesian perspective, wel- fare spending—and the taxes that financed it—provided an “automatic stabi- lizer,” smoothing aggregate demand in the face of fluctuations in the business cycle.1 From a corporatist perspective, welfare spending greased the wheels of “political exchange,” compensating powerful, mobilized labor movements for their acceptance of wage restraint.2 And even during the initial years of neoliberal- ism, welfare spending helped secure popular acquiescence to market reform, making intensified international competition and job loss more acceptable to the masses.3 In the 1990s, however, in the age of globalization, heightened concerns about budget deficits, and retiring baby boomers, welfare spending has come under intense pressure.4 The fact that the left is in power in an unprecedented number of European countries—France, Italy, Britain, the Netherlands, Sweden, and now Germany—is not necessarily grounds for celebration. As luck would have it, left- ist electoral planets have entered into alignment at precisely the moment when fis- cal constraints have become extremely tight. With welfare expansion giving way An earlier version of this paper was presented to the European Forum on Recasting the European Welfare State: Options, Constraints, Actors, at the European University Institute, Florence, Italy, 21 October 1998. I wish to thank the following for their advice and critical comments: Suzanne Berger, Fred Block, Ruth Collier, Giuseppe Di Palma, Maurizio Ferrera, Susan Giaimo, Anton Hemerijck, Richard Locke, Julia Lynch, Paul Pierson, Gloria Regonini, Martin Rhodes, Andrew Tauber, Margaret Weir, and John Zysman.
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