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Welfare State or Economic Democracy - Takis Fotopoulos

Welfare State or Economic Democracy - Takis Fotopoulos

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Published by LibertadAmistad
Published in 'Democracy & Nature', Vol. 5, No. 3 (November 1999).
Published in 'Democracy & Nature', Vol. 5, No. 3 (November 1999).

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Published by: LibertadAmistad on Feb 02, 2014
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 ELFARE STATE OR ECONOMIC DEMOCRACY
Takis Fotopoulos
 
Published in “Democracy & Nature”, Vol. 5, No. 3 (November 1!.
 
Abstract:
 The three ais o! this article is to sho" !irst# throu$h a historical a%al&sis o! the rise a%' theprese%t 'ecli%e o! the "el!are state# that such a s&ste is %o lo%$er !easible i% the !rae"ork o! thei%ter%atio%alise' arket eco%o&( The seco%' ai is to sho" that the curre%t 'iscourse o! )epo"eri%$*the citi+e% throu$h e%'i%$ the )'epe%'e%c& culture* !u%ctio%s as part o! the i'eolo$& o! arketi+atio%# i! it 'oes %ot i%,ol,e proposals !or e%'i%$ the citi+e%-s 'epe%'e%ce %ot .ust o% the state but also o% thearket( This lea's to the proposal !or a %e" co%ceptio% o! social "el!are /the thir' ai o! the paper/"hich is base' o% a co%ceptio% o! eco%oic 'eocrac&# as a% i%te$ral part o! a% i%clusi,e 'eocrac&( 
0( Marketi+atio% a%' "el!are state
 A !ruit!ul "a& to i%terpret the post1"ar rise a%' 'ecli%e o! the "el!are state# as "ell as its si$%i!ica%ce "ithrespect to the pro.ect o! creati%$ a liberator& 'eocratic societ&# is# to & i%'# to $o back i% 2istor& a%'e3plore its ori$i%s( The t"o crucial !acts that coul' e3plai% its ori$i%s are the eer$e%ce o! the%atio%1state a%' the s&ste o! the arket eco%o&# "hich both pla&e' a si$%i!ica%t role i% this process( 2o"e,er# be!ore "e ebark o% a brie! outli%e o! this process it is %ecessar& to clari!& the ters "e shalluse( I a usi%$ the ter )arket eco%o&* to 'e!i%e the co%crete s&ste that eer$e' i% a speci!ic place4Europe5 a%' at a particular tie 4t"o ce%turies a$o5 a%' %ot as a $e%eral historical cate$or& o! a%approach aii%$ to sho" the e,olutio% o! the eco%oic s&ste throu$hout 2istor&# as the Mar3ist co%cepto! the o'e o! pro'uctio% suppose'l& 'oes( I "ill 'e!i%e the arket eco%o& as the sel!1re$ulati%$ s&stei% "hich the !u%'ae%tal eco%oic probles 4"hat# ho"# a%' !or "hoto pro'uce5 are sol,e'6autoaticall&-# throu$h the price echa%is# rather tha% throu$h co%scious social 'ecisio%s( The arket eco%o&# as I 'e!i%e' it# is a broa'er ter tha% capitalis a%' the t"o shoul' %ot be co%!use'"ith each other( The arket eco%o& re!ers to the "a& resources are allocate'# "hereas capitalis re!ersto propert& relatio%s( Althou$h# historicall&# the arket eco%o& has bee% associate' "ith capitalis#%ael&# pri,ate o"%ership a%' co%trol o! the ea%s o! pro'uctio%# a arket allocatio% o! resources is %oti%co%cei,able "ithi% a s&ste o! social o"%ership a%' co%trol o! eco%oic resources( This 'isti%ctio%bet"ee% capitalis a%' the arket eco%o& is particularl& use!ul to'a& "he% a%& i% the sel!1st&le')Le!t*# a!ter the !ailure o! the pla%%e' eco%o&# re'isco,er the erits o! a 7socialist8 arket eco%o&( Atthe sae tie# se,eral )cou%ist* parties i% the South 4Chi%a# 9iet%a etc(5 ha,e ebarke' o% astrate$& to buil' a )socialist* arket eco%o& a%' are i% the process o! achie,i%$ a s&%thesis o! the "orstelee%ts o! both the arket eco%o& 4u%eplo&e%t# i%eualit&# po,ert&5 a%' 7socialist7 statis4authoritaria%is# lack o! a%& political !ree'o etc(5( The !act that i% a arket eco%o& scarce resources are allocate' 7autoaticall&8 'oes %ot ea% that thereare %o social co%trols at all( 2ere# "e shoul' i%tro'uce a% iporta%t 'isti%ctio% bet"ee% the ,arious t&peso! social co%trols "hich "ill help us to i%terpret the rise a%' !all o! the "el!are state( There are three ai% t&pes o! possible social co%trols o% the arket eco%o&:re$ulator& co%trols# "hich ha,e usuall& bee% i%tro'uce' b& the capitalists i% co%trol o! the arketeco%o& i% or'er to )re$ulate* the arket( The ai o! re$ulator& co%trols is to create a stable !rae"ork!or the sooth !u%ctio%i%$ o! the arket eco%o& "ithout a!!ecti%$ its esse%tial sel!1 re$ulati%$ %ature(Such co%trols ha,e al"a&s bee% %ecessar& !or the !u%ctio%i%$ o! the s&ste o! the arket eco%o&(E3aples o! such co%trols are the ,arious co%trols i%tro'uce' at prese%t b& Worl' Tra'e Or$a%isatio%# or
 
b& the Maastricht;Aster'a treaties# "hich ai at re$ulati%$ the "orl' a%' the Europea% arketsrespecti,el& i% the i%terest ai%l& o! those co%trolli%$ the respecti,e arkets 4ulti%atio%als etc(5
social co%trols i% the broa' se%se "hich# althou$h the& ha,e as their priar& ai the protectio% o! those co%trolli%$ the arket eco%o& a$ai%st !orei$% copetitio%# still# the& a& ha,e soei%'irect e!!ects that coul' be be%e!icial to the rest o! societ& as "ell( A priar& e3aple o! suchco%trols is the ,arious protectio%ist easures aii%$ at protecti%$ 'oestic coo'ities a%'capital arkets 4tari!!s# iport co%trols# e3cha%$e co%trols etc(5(
social co%trols i% the %arro" se%se "hich ai at the protectio% o! hua%s a%' %ature a$ai%st thee!!ects o! arketi+atio%( Such co%trols are usuall& i%tro'uce' as a result o! social stru$$lesu%'ertake% b& those "ho are a',ersel& a!!ecte' b& the arket eco%o&8s e!!ects o% the# or o%their e%,iro%e%t( T&pical e3aples o! such co%trols are social securit& le$islatio%# "el!arebe%e!its# acro1eco%oic co%trols to secure !ull eplo&e%t# e%,iro%e%tal co%trols etc( It isthere!ore ob,ious that the "el!are state8s poi%t o! re!ere%ce is this particular t&pe o! socialco%trols(
State a%' "el!are be!ore the "el!are state
Althou$h the "el!are state i% the proper se%se o! the "or' "as bor% i% the post seco%' "orl' "ar perio'#the state has be$u% iposi%$ social co%trols "ith the ai to protect# but also to co%trol# labour lo%$ be!orethat( I% !act# "e a& trace soe ru'ie%tar& state pro,isio% o! "el!are i% <ritai% a%' other Europea%cou%tries back to the tie o! the eer$e%ce o! the %atio%1state at the e%' o! the Mi''le A$es 4relie! o! thepoor# buil'i%$ o! "orkhouses etc5(=0> <ut# there is a si$%i!ica%t 'i!!ere%ce bet"ee% the state pro,isio% o! "el!are be!ore the eer$e%ce o! the arket eco%o& a%' a!ter it( <e!ore the rise o! the arket eco%o&#the state pro,isio% o! "el!are "as %ot relate' to a%& 'irect pressure )!ro belo"*( The ruli%$ elites "ere#o! course# co%cer%e' about the possibilit& o! social u%rest# !ollo"i%$ the car%a$e a%' "ars characterisi%$the co%soli'atio% o! %atio% states a%' their !i$ht a$ai%st the !ree cities a%' the ,illa$e cou%ities i% thelate !i!tee% a%' si3tee% ce%turies(=?> Ne,ertheless# the i%tro'uctio% o! "el!are ser,ices "as ai%l& le!t tothe 7be%e,ole%ce8 o! the ruli%$ elites( O% the other ha%'# the eer$e%ce o! the arket eco%o& s&stearke' the 'e,elope%t o! a stro%$ labour o,ee%t@ it "as i% 'irect respo%se to the co%sta%t pressure!ro this that the ruli%$ elites "ere !orce' to i%tro'uce ,arious "el!are schees culi%atii%$ i% thecreatio% o! !ull1 blo"% "el!are states 'uri%$ the ?th ce%tur&( I! "e $o back to the pre1arketi+atio% perio'# the state pla&e' a crucial role i% the creatio% o! the s&steo! the arket eco%o& b& both creati%$ the co%'itio%s !or the )%atio%alisatio%* o! the arket4erca%tilist phase5 a%' b& !reei%$ the arket !ro e!!ecti,e social co%trol 4liberal phase o! arketi+atio%5(=B> As re$ar's the role o! the state i% the erca%tilist phase# it shoul' be %ote' that be!orethe coercial re,olutio%# tra'e "as %ot %atio%al but u%icipal or i%ter1cou%it& i% character#bri%$i%$ to"%s a%' ,illa$es to$ether i% re$io%al %et"orks a%' local arkets but %ot i% %atio%al o%es( The%e"l& eer$i%$ %atio%s "ere erel& political u%its co%sisti%$# eco%oicall&# o! i%%uerablesel!1su!!icie%t househol's a%' i%si$%i!ica%t local arkets i% the ,illa$es( The !oratio% o! a %atio%al ori%ter%al arket "as resiste' b& the !iercel& protectio%ist to"%s a%' u%icipalities( O%l& "holesalers a%'rich ercha%ts "ere pressi%$ !or it( No "o%'er that it "as o%l& b& ,irtue o! 'eliberate state actio% i% the!i!tee%th a%' si3tee%th ce%turies that the )%atio%alisatio%* o! the arket a%' the creatio% o! i%ter%altra'e "ere achie,e'=>( The )%atio%alisatio%* o! the arket "as !ollo"e' i% the si3tee%th a%' se,e%tee%thce%turies b& !urther state actio%# the outcoe o! "hich "as to u%'eri%e to a% e,e% $reater e3te%t thepolitical a%' eco%oic i%'epe%'e%ce o! the cities a%' to rui% ,illa$e cou%es( This actio% i%,ol,e' theco%!iscatio%# or )e%closure* o! cou%al la%'s /a process that "as coplete' i% Wester% Europe b& the0s=>/( The e!!ect "as %ot o%l& to 'estro& cou%it& li%ks i% to"%s a%' ,illa$es but also to create the!ou%'atio%s !or the arketi+atio% o! the eco%o&# as both labour a%' la%' "ere %o" bei%$ release'# i%ple%ti!ul ua%tities# to be bou$ht a%' sol' i% the eer$i%$ labour a%' la%' arkets( Still# erca%tilis# "ith all its te%'e%c& to"ar's coercialisatio%# %e,er attacke' the i%stitutio%alsa!e$uar's "hich protecte' labour a%' la%' !ro bei%$ arketi+e'( The social co%trols o% labour a%'la%'# "hich# u%'er !eu'alis# ha' take% the !or o! custo a%' tra'itio%# "ere sipl& replace'# u%'ererca%tilis# b& statutes a%' or'i%a%ces( There!ore# the 6!reei%$- o! tra'e per!ore' b& erca%tilis
 
erel& liberate' tra'e !ro localis@ arkets "ere still a% accessor& !eature o! a% i%stitutio%al set1upre$ulate' ore tha% e,er b& societ&( p u%til the I%'ustrial Re,olutio%# there "as %o attept to establish aarket eco%o& i% the !or o! a bi$# sel!1re$ulati%$ arket( I% !act# it "as at the e%' o! the ei$htee%thce%tur& that the tra%sitio% !ro re$ulate' arkets to a s&ste o! sel!1re$ulate' o%es arke' the )$reattra%s!oratio%* o! societ&# that is# the o,e to a arket eco%o&( p u%til that tie# i%'ustrialpro'uctio% i% Wester% Europe# a%' particularl& i% E%$la%' "here the arket eco%o& "as bor%# "as aere accessor& to coerce( The use o! achi%es i% pro'uctio% a%' the 'e,elope%t o! the !actor&s&ste re,erse' this relatio%ship( The arketi+atio% o! la%'# labour a%' o%e&# "hich "ere crucialelee%ts i% the i%'ustrial process# "as there!ore# as Gola%&i 'escribe' it#
“the inevitable conse"uence o# theintroduction o# the #actory system in a commercial society” 
(=H> The arketi+atio% o! labour "as particularl& si$%i!ica%t "ith respect to the eer$e%ce o! the "el!arestate( %'er the $uil' s&ste# "orki%$ co%'itio%s as "ell as the "a$es o! the "orkers "ere re$ulate' b&societ&# that is# b& the custo a%' rule o! the $uil' a%' the to"%( The sae applie' to la%': the status a%'!u%ctio% o! la%' "as 'eteri%e' b& le$al a%' custoar& rules 4"hether its possessio% "as tra%s!erable or%ot a%' i! so u%'er "hat restrictio%s# !or "hat uses# etc(5( The reo,al o! labour a%' la%' !ro socialco%trol has le' to the creatio% o! %e" !ors o! 'oi%atio% a%'# at the sae tie# has 'estro&e' thetra'itio%al !abric o! the $uil' "orkers- cou%ities# ,illa$e cou%ities# the ol' !or o! la%' te%ure a%'so o%( For i%sta%ce# the pri%ciple o! !ree'o !ro "a%t "as euall& ack%o"le'$e' i% e,er& t&pe o! socialor$a%isatio% up u%til the be$i%%i%$ o! the si3tee%th ce%tur&:=> the i%'i,i'ual i% a priiti,e societ& "as%ot threate%e' b& star,atio% u%less the "hole cou%it& star,e'( 2u%$er# "hich "as a %ecessar& elee%to! a sel!1re$ulati%$ arket# presuppose' the liui'atio% o! or$a%ic societ&( I% !act# soe ar$ue that#co%trar& to popular a%' eco%oic "is'o# people are relati,el& less "ell o!! %o" tha% the& "ere i% theMi''le A$esJ=>O%e coul' there!ore speculate that o%l& a 'rastic cha%$e i% the eco%oic structure o! Wester% Europea%societ& at the tie o! the I%'ustrial Re,olutio% coul' ha,e a,erte' the arketi+atio% o! societ& /a cha%$ethat "oul' ha,e a'e the use o! achi%es# i% co%'itio%s o! lar$e1scale pro'uctio%# copatible "ith thesocial co%trol o! pro'uctio%( <ut such a cha%$e "oul' ha,e reuire' a social re,olutio% to"ar' eco%oic'eocrac& to accopa%& the I%'ustrial Re,olutio%( As such a re,olutio% 'i' %ot aterialise at the tie#"hat !ollo"e' "as i%e,itable( Factories coul' %ot secure co%ti%ue' pro'uctio% u%less the suppl& o! ea%so! pro'uctio% 4especiall&# labour a%' la%'5 "as or$a%ise'( <ut i% a coercial societ&# the o%l& "a& toor$a%ise their suppl& "as to tra%s!or hua% acti,it& a%' %atural resources i%to coo'ities# "hosesuppl& 'i' %ot 'epe%' o% the %ee's o! hua% bei%$s a%' o! the ecos&ste respecti,el&# but o% arketprices( There!ore# the i%tro'uctio% o! %e" s&stes o! pro'uctio% to a coercial societ&# "here the ea%so! pro'uctio% "ere u%'er pri,ate o"%ership a%' co%trol# i%e,itabl& le' 4"ith the crucial support o! the%atio%1state5 to the tra%s!oratio% o! the sociall& co%trolle' eco%oies o! the past# i% "hich the arketpla&e' a ar$i%al role i% the eco%oic process# i%to the prese%t arket eco%oies(Gri,ate co%trol o! pro'uctio% reuire' that those co%trolli%$ the ea%s o! pro'uctio% "oul' ha,e to beeco%oicall& )e!!icie%t* i% or'er to sur,i,e copetitio%# i(e( the& ha' to e%sure:
the !ree !lo" o! labour a%' la%' at a i%ial cost( 2o"e,er# u%'er co%'itio%s o! pri,ate co%trol o! pro'uctio%# this !lo" has a% i%,erse relatio%ship to the social co%trols 4i% the %arro" se%se5 o% thearket( Thus# the ore e!!ecti,e the social co%trols o% the arket# a%' i% particular o% thearkets !or the ea%s o! pro'uctio% 4labour# capital# la%'5# the ore 'i!!icult it is to e%sure their!ree !lo" at a i%ial cost( For i%sta%ce# le$islatio% to protect labour a'e the labour arket less!le3ible a%'# co%seue%tl&# the !lo" o! labour less sooth or ore e3pe%si,e( There!ore#historicall&# those ha,i%$ pri,ate co%trol o! the ea%s o! pro'uctio% ha,e al"a&s 'irecte' theire!!orts to"ar's !urther arketi+i%$ the eco%o&# that is# i%iisi%$ the social co%trols o% thearket(
the co%ti%ual !lo" o! i%,este%ts i%to %e" tech%iues# etho's o! pro'uctio% a%' pro'ucts# i% a%e!!ort to ipro,e copetiti,e%ess a%' the sales !i$ures /a lo$ic aptl& e3presse' b& the otto)$ro" or 'ie*/(=K> The outcoe o! this process is eco%oic $ro"th( There!ore# it is %ot acoi%ci'e%ce that
“the modern idea o# $ro%th %as #ormulated about #our centuries a$o in uro'e %hen the

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