Welfare Policy: Governance History and Political Philosophy Bernard Cadogan, D.Phil (Oxon) JULY 2013 BACKGROUND PAPER Welfare Policy: Governance History and Political Philosophy FOR THE 2013 STATEMENT ON THE LONG-TERM FISCAL POSITION MONTH/YEAR July 2013 AUTHOR Bernard Cadogan, D.Phil (Oxon) 1 Hill View Road Oxford United Kingdom Email [email protected] URL Treasury website at July 2013: www.treasury.govt.nz/government/longterm/fiscalposition/2013/ Abstract New Zealand is a veteran welfare provision state. This paper places New Zealand in the historical, ideological and political philosophy movements that have developed welfare policy in OECD European and New World nations as they have transformed from agrarian to industrial and then from industrial to post-industrial economies over the past 200 years. On this shifting map of welfare changes, New Zealand has successfully converted its mid-20th century universalist welfare system into one that emphasizes social investment, enablement and responsibilisation. This is expected to continue, reinforced by a Rawlsian construction of intergenerational equity and by reinvigorated citizenship concepts. JEL CLASSIFICATION I300 - Welfare and poverty KEYWORDS history and philosophy of welfare; classifications of welfare states; welfare provision; intergenerational equity. Welfare Policy: Governance History and Political Philosophy i Executive Summary New Zealand is not an isolate when it comes to welfare policy. It has been a leader- state and it has been a follower, since the 19th century. What has been less well understood, however, are New Zealand’s international and ideological contexts—a deficiency which this paper seeks to remedy. A critical review follows of the histories and ideologies of those forms of public provision against poverty and income insecurity that came to be referred to as “welfare” or “social security” by the 1930s-1960s period. These histories and ideologies are those of western OECD nations, arising from the Graeco-Roman concepts of citizenship and Judeao-Christian identification with, and compassion for, the poor. The Industrial revolution of the early 19th century promoted many Western polities to attempt regulatory intervention, social insurance or pay-as-you-go welfare programmes. Such programmes had become universal by the 1930s-1960s period, and mandatory, in that it became mandatory to contribute either through social insurance or taxation, and mandatory to accept benefits. These policies were closely associated with the late industrial Keynesian state. The golden age of welfare that ensued reached crisis point with the oil shocks of the 1970s. This policy sector has been in retreat since and has undergone extensive ideological re-evaluation, which this paper examines from the point of view of the literature and thought on welfare policy from several nations. This paper also reconsiders the Esping-Andersen classifications of welfare states, 30 years after they were first proposed. The mid-20th century entitlement state has become the early-21st century enablement and self-empowerment state for economies that emphasize work activation instead of universal entitlement. This change is a response to the replacement of mid-20th century industrial manual labour economies by service economies deploying higher technologies and higher educational resources. This paper also discusses the question of intergenerational equity with reference to the resources that leading political philosophers may contribute to resolve it. The status of citizenship, which had fallen into abeyance in the welfare state, is now undergoing revival and reconsideration as the corollary of the state’s own redefinition and retrenchment. Welfare remains a significant domestic output of government, but as the reorganized and reconceptualised social investment of the new liberal state. Welfare Policy: Governance History and Political Philosophy ii Table of Contents Abstract ............................................................................................................................... i Executive Summary ........................................................................................................... ii 1 Introduction ................................................................................................................. 1 2 Paradigms and golden ages ...................................................................................... 4 2.1 The welfare families of modern nation states ...................................................................4 2.2 The Iron Chancellor and his “white” welfare revolution .....................................................5 2.3 Dutch civic republicanism ..................................................................................................6 2.4 Bonapartes and mutual benefit: The French transition from welfare enablement to Bismarck ....................................................................................................7 2.5 Socialism and the lands of the free: the Anglo-American polities .....................................9 2.6 Wallander or the Nordic myth of the welfare polity .........................................................10 2.7 Families and faith, fascism and Franco: Welfare in the post-authoritarian Mediterranean .................................................................................................................14 2.8 Downunder: Welfare by other means ..............................................................................16 2.9 Canada: Liberal or corporatist? .......................................................................................17 2.10 The variants .....................................................................................................................18 2.11 The golden years: Apogee or anomaly? .........................................................................19 2.12 The red giant and dark matter: modernist states and behaviouralism ............................20 2.13 Something must be done—British state socialism ..........................................................21 2.14 Dark matter and the Third Way .......................................................................................23 2.15 Social engineering ...........................................................................................................24 2.16 The Land of the Free and Canada. .................................................................................26 2.17 Welcraft: 21st century welfare statecraft and its theorists ...............................................29 2.18 Theories and models for welfare .....................................................................................31 3 History of welfare—the longue durée of welfare and its 19th century catchments ................................................................................................................ 36 3.1 Buddhism and Christianity: Soteriology and the poor .....................................................36 3.2 British welfare worlds ......................................................................................................37 3.3 Our relationship to the deep past ....................................................................................38 3.4 Genesis: Pharoah and the Jews .....................................................................................40 3.5 Athens: Subsidised democracy .......................................................................................41 3.6 The wise men of Greece: Solon, Eubolos and the Athenian welfare system .................43 3.7 Rome is your friend: Civic entitlement, civic distributivism ..............................................45 3.8 The age of the Church: the Dark and Middle Ages. ........................................................48 3.9 Braveheart and Gotterdammerung: Tribal Europe ..........................................................49 3.10 The Tudors: The Catholic Reformation and 16th century poor law revolution ................50 3.11 Bum-tax and Scotland’s Poor Law ..................................................................................53 3.12 The Poor Laws (plural) ....................................................................................................53 3.13 The ghosts of Speenhamland 1795-2013 .......................................................................54 3.14 An epistemological warning on the uses and misuses of history ....................................56 3.15 Rural slums and backblocks ...........................................................................................57 3.16 The best of times, and the worst of times: the Poor Law Amendment Act 1834 ............58 3.17 Screen memories for workhouse horrors ........................................................................61 3.18 A new mutualism against a new Speenhamland? ..........................................................62 3.19 O Captain! My Captain!—A new liberal state and state intervention ..............................63 3.20 A new liberalism: Birmingham governance model and Lloyd George ............................65 3.21 Rousseau, Robespierre and reaction: the influence of the Continent ............................67 3.22 What did Napoleon ever do for us? .................................................................................67 Welfare Policy: Governance History and Political Philosophy iii 3.23 The legacy of Jean-Jacques