New Social Risks and Welfare State Reform Is the Future American? Peter Taylor-Gooby P.F.Taylor-

The Welfare State A distinctive European project Ineluctable challenges: –Technical –EU –Moral WS as an interruption – market liberalism as the ‘normal business’ of the West Relevant to Norway: rich, equal, cohesive

The technical critique Rising costs; diminishing resources Ageing, dependency and household changes Labour market, globalisation and government capacity

Assessment Regimes not convergent Innovation continues No obvious ‘race to the bottom’ ‘Permanent austerity?’

EU: The view from the ECB Greater flexibility in labour, product and financial markets together with sound fiscal positions and wage moderation will support the objective of maintaining price stability and will create stable conditions to foster employment creation. Such an interaction of policies … is the best possible way to enhance the long-term welfare of the citizens of the Euro area Duisenberg 2002

EU – Assessment Direct social policy harmonisation unsuccessful SEA and pension restructuring in 1990s Primacy of a ‘dynamic knowledge-based economy’ But ‘soft law’, ECJ, OMC preserving key national differences Future uncertain

Declining possibility of welfare ‘End of history’, Hegelian empiricism ‘Social capital’ – individual and institutional trust –Not obviously correlated with welfare spend –Not obviously lower for state provision

Trust: state and private services (UK) NHS hospital59 Private hospital65 State school70 Fee-paying school79 State pension50 Private pension56

Why Europe is not the US: Alesina Geography and ‘race’: an unreconstituted C18th liberal constitution, a divided working class, limited left politics Scientificity of statistical method – the 50%+ claim Influences European debates Diversity: the impact of globalisation on the citizenry

The point US-Europe differences have more to do with the racial divisions than … cultural differences. As Europe has become more diverse, Europeans have increasingly been susceptible to exactly the same form of racist, anti-welfare demagoguery that worked so well in the US. We shall see whether the generous European welfare state can really survive in a heterogeneous society

Goodhart in Prospect Feb sharing and solidarity can conflict with diversity … an especially acute dilemma for progressives who want plenty of both solidarity - high social cohesion and generous welfare … - and diversity - equal respect for … peoples, values and ways of life … the left's recent love affair with diversity may come at the expense of the values and even the people that it once championed

Diversity and social spending Alesina 64 ‘Race’ fractionalisation-7.54* Per capita GDP1.92 Majoritarian-2.31 % pop Latin American-2.42 Caribbean-3.00 Asian-0.09 Constant R sq.0.69

Politics matters in Europe Correlations with social spending ‘Race’ index -.17 Left in govt..58** Race, controlling for Left in govt -.06

Politics, diversity etc in Europe ‘Race’ fractionalisation-.30 Left parties in cabinet.51** Pluralism.13 Pop R sq.46

The distinctiveness of Europe Various arguments imply that the future is American European traditions of welfare seem to be surviving – thus far US political traditions set against state welfare European traditions can resist such trends

Choice and welfare: UK version