CHAPTER 14

The chapter begins by reviewing the work of some of the first to research the modern welfare state such as Adolph Wagner and Gusta Schmoller who hypothesized that social spending will increase with income. Others attributed the particular development of a nation’s welfare policies to its labor market and level of industrialization. I agree particularly with Karl Polanyi’s assessment that society or regimes protect themselves by adopting some form of social insurance to secure their labor force, keep loyal party patrons, and maintain stability. Polanyi found similarities in the responses to the turbulent effects of late 19^th century capitalism (such as external competition, price variation, ect.) between Victorian England and the Prussia of Bismark. The expansion of suffrage also had a great effect on the pace and scope of the development of the welfare state. States primarily sought to keep peasants in the country side with their early social programs, yet later developed programs to both subdue and patronize the peasantry.

Recent examinations of the social welfare systems in developing countries have suggested that one of the biggest determinants of a particular state’s welfare policies and scope will be its distinct path to development. Countries that seek to industrialize through ISI will often appease urban industrial workers but become the enemy of strong agricultural sectors favoring ELI. The study examined claims that the four crucial determinants in shaping a welfare state are; “the domestic market size, the relative abundance or scarcity of labor, asset inequality, and the openness of the international commodity.” An interesting point raised in this same section examining the welfare state in developing countries tied in the complex relationship of industry to education. While at first glance and in many instances throughout history, captains of industry have sought a large uneducated and unskilled labor pool to keep wages low in order to reduce costs. This may still be the motive for many formerly western based manufacturers relocating to special economic zones where wages are guaranteed to be less. This model, efficient for ELI however fails horribly when inverted into a strategy for import substitution industrialization. With an unskilled poor population industry will have no consumers for the products it produces and therefore will inevitably fail. Mares says on page 368, “Capitalists sought to create a labor force capable of domestic industrial production, as well as a consumer base capable of absorbing its output.” A great example of this is the book, “Captains of Consciousness,” by Stewart Ewing which explores the roots of the modern American consumer society and the tactics early marketers used to accomplish this transformation.

Finally the article challenges the common notion that the welfare state is over and in retrenchment since the 1970’s. Mares argues instead that the welfare system in developing states is transforming itself in new ways that may be less apparent and relying more heavily on the private sector for the delivery of services. Mares closes the chapter on a humble note saying that while comparing data from developed and developing welfare states can raise many new questions, the new plurality in methodology, paradigms, and the availability of data will provide studies of welfare states a secure future in the realm of comparative politics.