One - Beyond the welfare state as we knew it?

Summary

The twentieth century may be called the century of the welfare state. It saw the emergence, expansion and maturation of the welfare state as we know it. Some have claimed that these developments represent a ‘growth to limits’ (Flora, 1986) and in a way this communicates a vision that we, at the turn of the century, were about to see the end of history, or at least the end of the welfare state evolution. However, we have learnt from the first decade of the twenty-first century that, not only does the welfare state appear to be here to stay, it is also subject to continued reform. This started already in the late 1990s, when various attempts were made to redefine the principles, goals and instruments of the welfare state to adapt it to the new socioeconomic context of the post-industrial era. Central to this new thinking is the emphasis that is placed on developing policies that aim at ‘preparing’ rather than ‘repairing’. These ideas have been developed most notably in OECD (1996), Giddens (1998), Esping-Andersen et al. (2002) and Rodrigues (2003). While different terms and labels have been used (such as ‘social development’, ‘the developmental welfare state’, ‘the social investment state’, ‘the enabling state’ and ‘inclusive liberalism’), all these analyses point towards a similar policy logic based on what can be labelled ‘social investment’.

The social investment perspective is intended to sustain a different economy than that after 1945 – the knowledge-based economy. In this new economy, knowledge is considered as the driver of productivity and economic growth. The knowledge-based economy thus rests on a skilled and flexible labour force, which can easily adapt to the constantly changing needs of the economy but also be the motor of these changes. The social investment perspective also aims at modernising the post-war welfare state so as to better address the new social risks and needs structure of contemporary societies, such as single parenthood, the need to reconcile work and family life, lack of continuous careers, more precarious forms of contracts and possessing low or obsolete skills (Bonoli, 2005).