Globalization and the welfare state

Résumé du document

The anti-globalization movement became famous due to violent demonstrations, such as the ones during the WTO Summit in Seattle in 1999 or the G8 meeting in 2001. The movement supports the idea that, even if globalization may have positive effects regarding economy, it is a disaster regarding the social sphere. 'Globalization' corresponds to a greater openness of the national society and economy. Cultural globalization, human migrations and tourism are fostered by the fact that it becomes easier and cheaper to travel and to communicate at a global scale. Economic globalization can be characterized by free trade in goods and services and free capital flows. This economic globalization is supposed to encourage economic growth, as proved by Ricardo's theorem of comparative advantage, which justifies free trade. Here, the anti-globalization movement emphasizes that this mechanism reinforces growth, as shown by the 'economic miracles' enjoyed by South East Asian Countries thanks to economic openness, without taking the welfare state into account. A welfare state is 'a country that has a state system to ensure a decent living standard for its citizens', which implies a fight against poverty and, therefore, a regulation of the labour market, social policies regarding the weak, the elderly and the unemployed, and a strong defence of the principles of health care and schooling.

Extraits

[...] In Sweden and in Germany, the economic performances are really good, whereas neoliberal policies have been a thousand times less hard than in Anglo- Saxon countries. In Germany, the social market economy has been protected, essentially through a great deal of negotiation between employers and employees. It proves that a model of capitalism remains sustainable. Such a miracle can be explained by two major phenomena. First and foremost, contrarily to the classical neoliberal point of view, cost- competitiveness is not the only kind of competitiveness that must be taken into account. [...]

[...] “Globalization” corresponds to a greater openness of the national society and economy. Cultural globalization, human migrations and tourism are fostered by the fact that it becomes easier and cheaper to travel and to communicate at a global scale. Economic globalization can be characterized by free trade in goods and services and free capital flows. This economic globalization is supposed to encourage economic growth, as proved by the Ricardo's theorem of comparative advantage which justifies free trade. Here, the anti-globalization movement emphasizes that this mechanism reinforces growth, as showed by the “economic miracles” enjoyed by South East Asian Countries thanks to economic openness, without taking the welfare state into account. [...]

[...] The New Right criticizes hardly the welfare state, as showed by the metaphor of the nanny. Given that the social democratic model has been undermined by globalization, it seems to exist no alternative to neoliberal policies that mainly aim to trigger an increase in cost-competitiveness and to make the country “investor- friendly”. The difference between the policies led by the Left and the Centre and those led by the Right is just a matter of degree. Neoliberal policies are of course illustrated by Anglo-Saxon countries, but they also pressure the social market economies. [...]

[...] Thus, globalization surprisingly makes the importance of the welfare state greater than in a past era. Basically, a higher degree of exposure to international trade is statistically associated with stronger social policies. The politicians which support an open economy would not convince their electors without providing them some social guarantees against global economic shocks or brutal capital flows that trigger unemployment, and the means to face the required flexibility of the labour market. Moreover, social policies can also help to achieve the goal of integrating the numerous immigrants. [...]

[...] Nevertheless, it does not mean the definitive victory of the neoliberal ideology. Basically, globalization and the welfare state can be conciliated. Some new models of welfare state encourage a middle-road deregulation of the labour market, whose negative effects are diminished by strong social policies which do not imply increasing the public debt and deficits or the capital and corporate taxes. The most well-known and successful one is the Danish “flexsecurity”. To be efficient, such welfare state policies must also be led by democratic international organizations at a global scale. [...]