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Relations industrielles Industrial Relations

The Concept of the " Welfare State " An Essay of Sociological Interpretation Maurice Tremblay

Volume 6, Number 2, March 1951

URI: https://id.erudit.org/iderudit/1023238ar DOI: https://doi.org/10.7202/1023238ar

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Publisher(s) Département des relations industrielles de l’Université Laval

ISSN 0034-379X (print) 1703-8138 (digital)

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Cite this article Tremblay, M. (1951). The Concept of the " Welfare State ": An Essay of Sociological Interpretation. Relations industrielles / Industrial Relations, 6(2), 42–48. https://doi.org/10.7202/1023238ar

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This article is disseminated and preserved by Érudit. Érudit is a non-profit inter-university consortium of the Université de Montréal, Université Laval, and the Université du Québec à Montréal. Its mission is to promote and disseminate research. https://www.erudit.org/en/ The Concept of the " Welfare State " An essay of sociological interpretation by MAURICE TREMBLAY, Professor in the Faculty of Social Sciences of Laval University

This article will be devoted to an We beUeve that they originate in analysis of the problems raised by the "Liberal State" as it was made up the evolution of the liberal democra• in the 19th Century. We submit that cies towards the regime known as the "Welfare State" is situated in the "Weffare State",1 to bring out the prolongation of the traditional Libe• factors which are involved in this ral State, not only as its successor in evolution and which can help us to fact, but if not as the necessary, at explain it. least as its normal product. We sub• mit that it is born negatively, on one What are the sociological roots of hand, from the laissez-faire economy, the "Welfare State" ? from the unsatisfied wants bred by the liberal capitalism; and, positively, on the other hand, from poUtical U- O) Why do we use in French the En• glish expression to indicate the object beralism, from the development itself of our studies? Etymologieally, the of the democratic principle. name "Welfare State ' is rather vague. It could apply indifferently to any political system, because there is not any that does not profess as its end, Economic Liberalism the welfare of its citizens. Use, how• ever, has narrowed the meaning and the expression is now universally ad• Conceived in reaction against the mitted, in the English language, to abuses of the mercantilism and held designate the particular system of up by the glorification of the idea of economic regulation and social assist• ance which the liberal democracies liberty in all spheres, the laissez-faire are now adopting, half-way between economy is characterized by the ra• the "laissez-faire" system and the dical separation that it operates bet• socialist system. ween economics and politics. It is probably the vague etymology of the expression that explains its success, permitting it to cover equally According to the laissez-faire and without prejudice all the aspects theory, in fact, the common prospe• of the complex and controversial real• rity is not an end to which the State ity that it represents. should direct rationaUy the various No name in French has had the economic factors. It is rather a hao- same success. "Régime de protectorat social", "Etat sécuritaire", "Etat de py consequence which is expected to service social", "Etat paternaliste", result spontaneously by the search "Etat-Providence"; none of these na• of each one, in competition with aU mes has been granted unanimity, the others, in the framework of a free probably because they have all a too explicit, unfavourable meaning. market, of his own advantage: and We shall therefore confine oursel• this, by aU the ways that his talent ves in the French text to the English and industry can secure for him, with expression of which the use is firmly the exception, however, of violence, established and which has the great fraud and coalition, which would advantage, in a sociological analysis, of not causing any prejudice at first eliminate the mechanism of compe• sight tition. 42 Tbe Industrial Relation* Review It is competition, in fact, which is being content to sanction the rules of expected to be the principal animator the game, the activity of the various and regulator of the economy. On economic factors. It is the famous one hand, it must insure the maxi• "laissez-faire" policy. mum utilisation of productive re• sources and energy, as weU as the continual improvement of products Competitive Capitalism and services on the market. On the and its results other hand, it must insure the balance of the system, by adjusting automa• It is under this economic-poUtical tically in each sector, the production conception that the capitalistic sys• to the consumption, by the action of tem has developed during the 19th the law of supply and demand, which century. Let us see how the facts only shows the effects of competition measure up to the postulates of the on the commodity and labour market. doctrine. Here is how Jean Marchai descri• It must be recognized that the bes this latter function attributed to open race to profits by the capitalis• Competition by the fervents of the tic entrepreneurs of the 19th century, laissez-faire economy. "When there putting to work more and more per• are too many products, owing to the fected techniques to lower their cost competition among sellers, prices go price and assure themselves against down. Some entrepreneurs are dis• their competitors of a place more couraged and production diminishes. and more advantageous on a constan• At the same time, the product being dy expanding market through the made accessible to new groups of parallel progress of means of com• buyers, the demand increases. When munication, has caused an economic it is the demand, on the contrary, advance without equal in history and which exceeds the supply, prices go which has been properly caUed a up, some buyers are obliged to re• revolution: the Industrial Revolution. duce their consumption or give up Jaurès, who has not much sympathy the product, whereas the entrepre• for the system admired "the power neurs, stimulated by the high profits, of revolutionary action of the middle- increase production. . Identical me• class, breaking out of its former chanisms are met with in salaries, to framework, wiping away aU old adapt the supply to the demand for powers and beUefs, turning upside- labour and in the question of inter• down the world's habits, renewing national trade to equaUze imports and 2 continually its own technique, letting exports." loose the tragic beauty of unlimited The economy, thus finding in com• productive forces." 3 petitive Uberties its principle, at the same time, dynamic and regulating, It must also be recognized that the not only State interference becomes letting loose of the productive forces, useless but further it could only con• by the multiplication of the means tribute towards paralyzing and strain• of subsistence that this has caused, ing the normal functioning of the has permitted a growth without pre• system. Under this conditions one cedent of the population up until function only is reserved for the Sta• this time held back, by primitive te, that of being on the watch for the methods of life, to a level of mere respect of property and contracts, and renewal. In Europe, the population to arbitrate thus from the outside, in increased in the 19th century from 160 to 400 mdlions. In the United (4) Jean Marchai, Cours d'économie poli• tique, Book I, p. 92, Librairie de Mé• (3) J. Jaurès, l'Armée nouvelle, Rieder, dicis, Paris, 1950. p. 306. March 1951 43 States, it jumped from 5 to 100 to be impossible, under penalty or miUions, and in the whole world, bankruptcy, to make any increase in where there are still large zones that wages, and, moreover, the competi• capitalism has not touched, went tion of workers between themselves from 900 to 1,600 miUions. on the labour market, where they find In conformity with the consequen• themselves alone, unorganized, in ces of the Liberal thesis, the capital• face of employers who, according to ism of the 19th century has therefore the expression used by Adam Smith, really led us to an ever-increased constitute, each one to himseU, a and improved production of goods natural coalition. The working class, in the end, stands aU the competition and comforts of life; but, on the other 4 hand, it has not fulfilled the promises on which rests the system." of common prosperity and economic Thus if competition which gave balance of liberalism. life to the system, has produced pros• In fact, if capitaUsm in developing perity, one may say that it has sys• itseU has multipUed the means of tematically excluded the working subsistence, and permitted, because class. of this, an extraordinary increase in At the same time, competition has the population; on the other hand, not insured the automatic adjust• it has maintained the vast working ments of the economic system that class to which it gave rise at the it was supposed to guarantee. Crises simple subsistence level, and this, as or relative over-production, starting long as and to the extent that it chains of fadures of entrepreneurs has stuck to the principle of straight and widespread unemployment for competition. the workers began to appear from The worker's poverty in the first the beginning of the 19th century half of the 19th century is weU and they have repeated themselves known. Miserable wages, unduly since then, about every eight years, long working hours, inhuman use of with surprising regularity, which woman and chfld labour, pitiable would seem to indicate that they are working and living conditions; in a a phenomenon concerned with the word, all the elements of general operation of industrial capitaUsm. misery. If, therefore, to review the situa• This situation, no doubt, was caus• tion for most of the 19th century, ed in some respects, by the newness the play of competitive industrial li• of the system, by necessity; at the berties in the economic arena has beginning of an era of industrializa• started a revolutionary development tion, to sacrifice to production of of production, it has also created for capital goods that of consumer the various economic factors a state goods; but it was caused still more of insecurity which cannot be sup• fundamentally by the competitive ported, and against which they must character of the system itself. necessarily react. "Since the suppression of the cor• Insecurity of the entrepreneurs porations and the prohibition of all constandy menaced with being pas• workers' associations", writes Jean sed by their competitors and without Marchai, "the proleteriat finds itself defence against economic depres• naked and disarmed in the economic sions. jungle. It finds there two competi• Insecurity of the workers always tions, one on top of the other. The in fear of arbitrary dismissal or of competition of the employers bet• lack of work due to a depression and ween themselves, on the commodity market; competition that they invoke (2) Jean Marchai, Cours d'économie poli• and often with reason, to declare it tique, Book I, p. 97. 44 The Industrial Relations Review mabiUty to protect themselves with important branches of production, their meager wages against old age the large enterprise, in the form of and the hazards of life. a monopoly or oligopoly, has assured Insecurity of the farmers who, to itself of the domination of the mar• the extent they produce for the ket, by eliminating, absorbing or market, are also open to the risks squeezing out similar enterprises of competition and cyclical economic not strong enough to resist their com• fluctuations. petition. In the second place, the vertical concentration by which the large The process of consolidation enterprise, in order to preserve itself of economic interests against the risks and costs of the buyer-seller competition absorbs in Insecurity is repugnant to human its structure, complementary enter• nature, therefore one and the other prises situated higher or lower than must try to get above it. But they itself in the same process of pro• could not do so without working and duction. at the same time without restraining the competition to which it was in• Finally the financial concentration separably joined. It is thus, that which by the development of the from the insecurity inherent to com• limited company and holding com• petitive capitalism, was born, by a pany, permits a small number of sort of logical reasoning, two ten• administrators of capital to control dencies towards its elimination. A great sectors of the economy. first tendency which pushes the va• In addition, in order to protect rious classes of producers to orga• against drops in prices, competing nize themselves to dominate the enterprises, in spite of all legal res• market, each one in his own sector. trictions, have more and more re• A second tendency which inclines course to association in the form of them at the same time to make appeal agreements to fix prices, limit pro• to the protection of the law and to duction and divide markets. the assistance of the State in order to consolidate their position on the On the other side, the workers market. were obliged to dominate the labour market in attempting to eliminate These two tendencies, which hit competition which, in the beginnings at the very foundations of laissez- of capitalism, had held them in the faire economy: free competition and total insecurity called poverty. Then its coroUary, the non-interference of came the development of unionism, the State in the economic sphere, favoured by the grouping of the have begun to manifest themselves workers and the awakening of class in the second half of the 19th century consciousness which foUowed the and have kept on increasing. phenomenon of concentration of en• Let us see briefly how each one terprises and industrial urbanization. of these tendencies has developed and to what results it has led. Alone the workers were condem• ned to accept miserable wages and On the enterprise side, the pro• often very poor working conditions gress towards control of the market that their mutual competition and took two directions, that of concen• that of their employers between tration and that of association. themselves, forced on them. Joined Concentration itself followed three together, they are now strong enough, methods. under the threat of striking, to force First of all, horizontal concentra• the employers to raise their wages tion, by means of which, in the more and better their working conditions. March 1951 45 With the increase of unionism, and century aU the capitalistic countries the legal and poUtical helps of which in the course of development of poUt• they have assured themselves, the ical UberaUsm, went from a system working-class in now more and more of qualified voters to one of universal able to have its demands accepted suffrage. The Uberal State had been and thus substitute its intervention up to this point a middle-class state, to the automatic adjustment of the controlled by those with possessions, competition on the labour market. but with the extension of the right The agricultural class has been to vote, it became a popular state, longer to react, but it also now leans obliged to take heed of the demands more and more by professional as• of the mass that it had incorporated poUticaUy. As R. M. Maclver puts sociation and cooperation to sur• 5 mount the competition in quite ano• it so weU the evolution or rather, ther important sector of the economy. this poUtical revolution, has not The same insecurity, which has aUowed the capitalists, owners of the pushed the various producing agents means of production to set them• to try and protect themselves by or• selves up as a governing class in the ganizing against the hardships of way the nobles, owners of the land, competition, has also inclined them had done. towards calling more and more on No matter how much influence the protection and assistance of the they exercise poUticaUy, the State is State in the economic struggle. henceforth called upon to serve also On the side of the capitalistic en• the interests of the other classes. trepreneurs, it must be noted in con• Strong with their political rights, nection with the development of this the workers have -used them not only second tendency against the classical to have their right to unionize re• tradition, the claiming of protective cognized or even to strike, but also tariffs against foreign competition, to gradually have adopted a whole the pressure put on die State for the series of laws tending to improve initiation of a colonization or im• their working conditions and remu• perialistic poUcy susceptible to fur• neration. nish to the national production ac• The agricultural class also making cess to raw materials and assured use of its poUtical power, has fol• markets, the claiming of government lowed the same road with the result subsidies to the profit of sub-marginal that it has probably become the class national industries, the request for receiving the most economic assist• tax exemption or exclusive conces• ance from the State. sions for the establishment of new industries, the recourse to the State for the saving of enterprises threat• Emergence of the ened with faflure. In a general Welfare State fashion, it might be said that since the end of the 19th century, the ca• However, this race towards the pitalistic entrepreneurs had recourse increase and stabilization of the re• to State intervention each time and venues of the various categories of in every case, no matter how opposed producers, by the double method of it was to Uberal principles, that it controUing the market and depending was judged to be favourable to their on state protection, could not read- enterprise's interests. any more successfuUy a balanced The working class did not fad to market and general prosperity than call on the State either. This appeal (5) R. M. Maclver, The Modern State, has been that much more effective, Oxford University Press, London, since with the second half of the 19th 1941, p. 304 and foUowing. 46 The Industrial Relations Review the competitive system at the be• regulate the economy and promote ginning. the common prosperity. It was not In fact, the interests of the various enough that the State had the ne• groups of economic agents are in op• cessary inclination to assume this position to each other and their part, it was necessary in addition consolidation could only accentuate that the State dispose of the neces• their antagonism and lead to disas• sary means towards this end. trous results for the whole of the It is at this point, that comes into economy. the picture as a third factor in the These results manifested themsel• budding up of the Welfare State, ves in a particularly unfortunate the Keynesian revolution in economic manner during the depression of science, since from the theory of the 1929, with its almost total paralysis celebrated economist has been drawn of the economy, its widespread un• a programme of poUtical action dest• employment and the crash of all ined to direct the free activities of categories of earnings. various economic agents towards the Capitalism with monopolistic ten• maintenance of a high level of em• dencies having faded, just as had ployment and national revenue, and competitive capitalism, there was only to insure the distribution of this re• one practical course open, recourse venue according to the merits and to the State as coordinating agent of needs of each category of citizens. the various economic interests and to take primary responsibiUty for The adoption of this poUcy ins• common prosperity. pired by Keynes in preference to a policy of systematic state socializa• This, then, is the particular policy tion of basic industries and general adopted by the government or the Elanning of the economy, is caused liberal democracies to meet this new y a fourth factor, the survivance responsibility which characterizes in public opinion in the democratic what is usuaUy called the Welfare countries of the laissez-faire ideals State. with the attachment to the system of It may be considered that the new private enterprise they imply and its system is the result of four comple• inalterable opposition to direct ma• nagement of the whole economy by mentary factors. the State. FundamentaUy, it first presents itself as the consequence of the po• The Welfare State appears to us Utical demands of the popular masses as a kind of an institutional compro• of which the most urgent, welfare mise between the liberal tradition and security have not been satisfied on one hand and on the other, the by laissez-faire capitalism. practical necessity of state interven• It appears secondly, as the result tion in order that the desires for of the organic evolution of the State welfare and security of the majority itself which only continues in a more of its citizens be satisfied. systematic and comprehensive man• ner, the intervention towards which The Welfare State takes account the various groups making up the of the Uberal tradition in so far as population had already directed it it does not have a tendency to re• with their ever-renewed demands of gulate the economy by authority but protection and assistance. rather by way of compensation, in attempting to prevent, by means of But it was not enough that the its budget, the inflationary or defla• masses disappointed by laissez-faire tionary tendencies which continually capitaUsm, turned to the State to threaten to unbalance the various March 1951 47 economic factors in a free market directiy or indirectiy the purchasing economy. power of the masses, must insure a maximum utilization of productive According to the theory of the forces. WeUare State, the volume of taxes and public expenditure should, in The economic by-product that is effect, vary inversely with the cy- expected from these programmes of cUcal fluctuations, in such a way as social security in a general policy of to stimulate or discourage, as the stabilization of the economy at a case may be, private investments and high level of employment and reve• thus to maintain at a stable level nue, must not make us forget that employment and national revenue. they are first of all inspired by social preoccupations, by the thought of On the other hand, in order that guaranteeing to the economically this stabilization does not operate weak classes, this supplementary at too low a level, and that the welfare which they demand and general prosperity be thus compro• which, even in an economy of full mised, the theory includes the neces• employment they cannot earn for sity of insuring that the low income themselves by their work. classes who have the biggest tend• ency to consume, receive enough re• While remaining within the limits venue to permit them to maintain of a sociological interpretation, we a sufficient demand on the commod• hope to have shown that the new ity and services market. system with the poUtical-economic conception which inspires it, is the The method provided, to this latter normal product of the classic econo• end, consists, on one hand, in the my state of the 19th century; that reduction of indirect taxes of a it is born, on one hand, from the general nature, and on the other unsatisfactory conditions and insecur• hand, in financing by progressive ity produced by the laissez-faire eco• direct taxes which put unproductive nomy; on the other hand, from the savings to work, a comprehensive incorporation of the popular classes programme of social security, of to the democratic state in the de• which the payments, by increasing velopment of political liberalism.

Forced Labour Camps in Countries Under Communist Domination by FRANÇOIS BRECHA, Member of the Czechoslovak Foreign Institute

In this second study, we shall means of inspiring terror, wedded by strive to define the actual reasons for the group in power against the entire the establishment of the forced labour Czechoslovakian population. Their camps in basing our statements upon aim is, on the one hand, the suppres• what we know and what we have sion of dangerous elements or simply received from various information of those who do not demonstrate a sources. positive enough spirit toward the re• The facts cited in the preceding gime; on the other hand, it is the study prove that, beyond all doubt, mass intimidation of a population the FLC's are certainly not a means which might some day reveal itself of instructing the idle, but an illegal hostile to the regime. Those constitute 48 The Industrial Relations Review