Social Protection

Discussion

Re-thinking social protection

Francine Mestrum:

"Social protection strategies for the North and the South cannot be the same, but we should be aware that policy orientations in North and South are similar, and we may find each other in the broad philosophical lines of what we have to defend. Neoliberalism is a global ideology that tries to fight poverty in order to legitimate itself, fighting inequality in order to preserve social peace, promoting social protection when it helps markets to function better. Its starting positions in the North and the South are different, but its objectives are identical.

Because of these different starting positions, it should be clear for social movements that there is no blueprint for an alternative. This is the first golden rule. Each society will have to define its own priorities and find its own solutions, in a context of cooperation with others.

The second golden rule will be that no country can solve its problems all on its own. In a globalized world, countries compete in terms of taxes, wages and social protection. If one country lowers its standards, this has consequences in neighbouring countries. This is the tragedy of the European Union today, where integration and cooperation have been replaced by competition. Not only economic actors take note of changes and come or go in function of what has been decided; people also come and go in function of what there is available in terms of labour or social benefits. Some degree of coordination is thus necessary.

This also means that social policies will have to be multilevel. They cannot be limited to the national level – even if national states remain the major actors -, but globalization demands that common rules are defined at continental or at the global level, even if, at the practical level, social models will differ from country to country. It would be positive if ASEAN could decide on a set of basic rules to be respected by all countries. Also, local authorities can play an important role in implementing and often improving social policies. This multilevel approach can also be important for the organisation of solidarity, whether it be North-South and rich countries helping poor ones with the introduction of social protection systems, or at a continental level, be it ASEAN or the European Union.

The third golden rule will be that effective social protection systems that are able to really satisfy the needs of people will be built bottom up. They will start from the real demands of people and translate these into rights and priorities. Obviously, at this level, power relations will be influential, and therefore it is indeed important to have strong social movements that are able to raise the voice of poor and vulnerable people. Social protection should be at the heart of a political and democratic project, able to create and strengthen social relationships.

Fourth, we have to be aware of the fact that, however positive the European welfare states have been in the past, a return to this past is impossible and undesirable. Economies and societies have changed, globalization leaves its marks, migration has fundamentally changed the way we look at social rights, families have changed and ‘breadwinner’s models’ have become irrelevant today; more flexibility in careers and jobs, in favour of workers, has to be taken into account. Rights certainly have to be confirmed, but will have to be strengthened and implemented in different ways. They should be more than an individual defence mechanism and should find their place in a strategy in favour of social change. This is a supplementary reason for re-thinking social protection. The South cannot wait till countries industrialize – if ever they will – in order to protect its people. Moreover, labour markets do no evolve in such a way that full employment seems possible in the near future, yet people rightly refuse to receive alms. Today, people ask to participate in decision-making that affects their lives, and this will also influence the way we conceive of social protection.

Finally, if we say the world has changed, we should also be aware of the threats of the climate change crisis. Not the planet is in danger, but its population. This means this population has to be protected and environmental rights, such as water and clean air, have to be integrated into social protection. The western development model, based on the exploitation of nature and on consumption, is exhausted. Redistribution of incomes, however necessary, will not be enough.

It is easy to see that these five basic points, the lack of a global blueprint, the need for coordination and multilevel approaches, for taking into account the real needs of people, for real change and for adding environmental concerns, will have important consequences at the political and at the economic level. Politically, re-thinking social protection will involve re-thinking the role of the State and of democracy. States will continue to play a major role in guaranteeing rights, in determining the rules of the game and as the fundamental actor for solidarity and the redistribution of resources. But for putting into practice social protection mechanisms, local authorities can be important as well. And for defining a common set of basic rules, possibly also for organizing solidarity mechanisms, the supranational level becomes ever more important. This also means democratic rules will have to be introduced at every level, in order for people to participate in such decision-making, and to then monitor the implementation of policies acting as watch dogs. But States will have to reclaim their responsibility for the welfare of their people.

Economically, re-thinking social protection will necessarily influence the economic game. First, because the environmental limits do not allow to pursue endless growth. The development of productive forces will have to be reconsidered beyond what capitalism and socialism preach. Our development models, shaped in the western mould of modernity, are more and more controversial. Whether it concerns genetically modified organisms, infrastructure works like dams, extractive industries and the like, people more and more take to the streets to reject them. But what is the alternative? In order to find solutions, in order to make room for other knowledge, our minds have indeed to be decolonized, we have to learn to think in a different way in order to protect life, all life on Earth, its production and its reproduction. Therefore, street protests ‘against’ are not enough if an alternative pathway is not presented. This is where progressive forces have failed up till now and what we urgently have to work at.

This will have consequences for the way we have organized solidarity in the past, redistributing incomes. To redistribute the product of growth is relatively easy, but what if growth dwindles or disappears? Give something to one then means taking away from the other. This is a recipe for conflicts, the consequences of which should not be ignored." (via email, May 2014)

History

Francine Mestrum:

"In this contribution I want to briefly sketch the history of social protection in Western Europe and in so-called third world countries. Secondly, I will show how this basic democratic thinking has been changed and how a new neoliberal paradigm was introduced, focusing on individual responsibility and technical management. I then want to propose a re-thinking of social protection in terms of social commons and explain the what, why and how of it. At this moment ‘social commons’ is a conceptual proposal that should allow us to develop and build a new kind of social protection, able to protect individual liberty in a context of collective responsibility, at different political levels. It will require to look beyond human rights and to put politics back in the centre.

As we will see, the social protection that is proposed today, has nothing to do with welfare states and barely goes beyond poverty reduction. What is highly confusing is the fact that in their theorizing about poverty and poverty reduction in the 1990s, the World Bank and UNDP (United Nations Development Programme) strongly discouraged poor countries to think of social security or social protection systems. These were said to be too expensive for poor countries and did not benefit the poor. Surely, people might want to have social insurance, but they should then buy it on the private market. Social protection was said to fall outside the core tasks of governments. States’ only commitment had to be to poor and vulnerable people. A second element that makes this new agenda problematic is that, precisely at the moment that international organisations are promoting ‘social protection’ in third world countries, they are also dismantling existing social protection in Western Europe, the cradle of welfare states. The austerity policies imposed by the ‘troika’ (European Central Bank, European Commission and International Monetary Fund) in countries like Greece, Portugal, Cyprus and Ireland imply serious cutbacks in health care, education and other social policies. More generally, the policies promoted by the European Commission and diligently implemented by EU-Member States will seriously diminish the protective nature of social policies. The focus is now on ‘investment’ and ‘activation’, that is preparation for the labour market.

This global context makes it difficult to have a clear picture of what precisely is happening and what the policies promoted by international organisations want to achieve.

As we will see, even if the differences between social policies in Europe and in third world countries are still huge, we also can perceive the beginning of a convergence movement and a political willingness to streamline social policies globally.

Looking back

Where does social protection come from? Does its history help to understand its possible future? In Europe, historically, poor relief was very much linked to the church and its works of charity. From the 15th century onwards, local authorities began to organize poverty alleviation and rules were introduced to see who was eligible and who was not.

A major breakthrough came with industrialization in the 19th century. In almost all countries of Western Europe and Scandinavia, the United States, Canada, Australia and New Zealand, the first elements of what would in most cases become welfare states were introduced, beginning with insurance against labour accidents. Labour unions were created, wages improved, child labour was slowly abandoned and workers were able to escape poverty.

Many different reasons can be mentioned for this important social transformation. The threat of socialism and communism certainly played an important role, but also the desire to have a stable workforce, social peace and stability. Some countries also had war in mind and knew that an army needs healthy soldiers. In fact, while different good arguments for social protection can be found in the documents of that period, there never has been a comprehensive theoretical foundation for the welfare states that came to full development after World War II. The changing perceptions on human rights, citizenship and equality certainly were important, as was the different way one started to look at risks and their collective implications.

It is important to note that after 1945 and the experience of fascism and totalitarianism, social protection in Western Europe contributed to the reconstruction of democracy and the achievement of social justice. The challenge was to reconcile individual freedom with a collective responsibility and belonging. It was a highly political project, even if it was always controversial and never lived up to its promises. Were welfare states a kind of class compromise? Yes and no. The economic and social rights that came with welfare states were not a gift. They were fought for in hard struggle for several decades. The negotiation mechanisms that were introduced between workers and employers certainly allowed for social peace and for concessions on both sides. But compromises only last for as long as all partners find them useful. With globalisation and the fall of the world of ‘real socialism’ this usefulness rapidly disappeared for employers. The strong welfare states which exist in Western Europe and Scandinavia can easily be dismantled and this has everything to do with globalisation and the current weakness of trade unions. Power relations and industrial relations are changing and workers are still at a loss and do not know how to re-organise. In this context, and in 2014, it is important to also refer to the creation of the ILO (International Labour Organisation). The ILO was a result of the Peace Treaty of Versailles of 1919 that ended the First World War (started in 1914, exactly one hundred years ago). The end of the 19th century and the beginning of the 20th century was also a period of globalization, of growing world trade and financial economy. But liberalism had failed and had not led to the spontaneous regulation of social relationships. It became clear that social justice was not a direct and inherent consequence of democracy. The dominant view after the murderous war was that peace would never be possible without social justice. In circles working at the Constitution of the ILO, there was a strong belief that economic competitiveness could not be achieved at the cost of workers.

Fair competition, so it was thought, was only possible if labour conditions in different countries were similar and converging. It is also important to point to the fact that even if the emerging welfare states were different from country to country and came about in specific historic, political and social circumstances, the major points of insurance against labour accidents, unemployment insurance, and so on, were discussed at the international level in different conferences. Nation-states did not act on their own but coordinated their work with others and reacted within their national contexts to specific demands and resistances. As for the ILO, it immediately started to work at international conventions on different social topics.

The social thinking in the current globalisation is totally different, and labour conditions are today a major element of competitiveness. Globalization is directly linked to and based on growing inequality. But when thinking of solutions to prepare a better future, it can be useful to remember this past.

European welfare states were fully developed after the Second World War, but it should be mentioned that they were never fully consensual. Their practical realization was often in opposition to its underlying philosophy. From their inception, they have been contested and as soon as it became clear that they were not able to eradicate poverty, liberal assaults against them became stronger and stronger. As for leftwing political forces, they often have seen the welfare states as correction mechanisms for a capitalist system that needed them in order to legitimate itself.

What about the third world?

It would be wrong to think that welfare states were a monopoly of industrialized and rich European countries. The countries that industrialized in the 20th century, like some countries of Latin America, also started to develop social protection systems and some of them were nearly as complete as the European ones. In Asia, countries like South Korea and Taiwan had developmental welfare states, social protection as an element in development strategies.

African countries as well had the ambition to develop social security as an element of nation-building. Unfortunately, limited resources and the development projects being distorted very rapidly after their independence, they never were fully developed. Today, most systems remain limited to civil servants, the military and the small number of workers in the formal sector.

What is important to note in this section however, is that the official documents of the UN, in which development theories and strategies were developed in the 1950s and 1960s, never speak of ‘poverty’. The UN started to write reports on the ‘social situation’ in under-developed countries in the 1950s and identified all problems of health, housing, education, etc. The solution for these problems, however, was ‘development’, not ‘poverty reduction’.

At the UN, efforts were made to integrate economic and social development into one concept, an effort that sadly failed. But the Universal Declaration of Human Rights, adopted in 1948, clearly listed a series of social and economic rights that have universal validity. They were confirmed and detailed in the International Covenant on Economic, Social and Cultural Rights of 1966.

In 1969, the General Assembly of the UN adopted a Declaration on Development and Social Progress . The document spells out all the rights that were also characteristic of Northern welfare states, confirming once again that the social development project was on the agenda for the South as well. The 1970s started as the ‘decade of social development’, with a failed attempt of the World Bank trying to put poverty on the agenda in order to fight within-country inequality. The ILO had an Employment Pact and started to work on the informal sector and ‘basic needs’.

Unfortunately, the 1970s also saw the beginning of the monetary and the oil crisis in the North. This led to an external debt crisis in the South and to the disaster of Structural Adjustment in the 1980s. It was the end of Keynesian policies in North and South, and the beginning of the era of neoliberalism. And this is what explains the changing social agenda.

Neoliberal social policies

In the 1980s social policies began to change, in the South as well as in the North. Structural adjustment in the South not only led to social disasters of privatizations, bankrupcies, dismissals, closing of social services, deregulation of the labour market, more poverty, growth of the informal sector, massive arrival of women on the labour market, emergence of special export zones, etc. Austerity policies led to the dismantling or the non-implementation of the timid existing social protection policies.

In the North, and more particularly in the European Union, the social discourse changed dramatically. Whereas the European Commission had always insisted on receiving more social competences, it now started to look at the (financial) sustainability of national welfare states and their compatibility with the European internal market.

In the South, the ‘poverty agenda’ that was put in place by the World Bank in the 1990s and the MDG agenda of the UN did not do much to alleviate poverty. In fact, both strategies failed. Only China and India succeeded in drastically reducing extreme poverty, but in Africa, the number of extremely poor people doubled from 1981 to 2005.

In the European Union, slow and almost invisible changes were introduced at the European level. The ‘convergence criteria’ of the Maastricht Treaty introduced austerity policies. Internal market policies made national protection of workers almost impossible. The Charter of Fundamental Rights, adopted in 2000, is very weak on social and economic rights. Negotiators for the draft Constitutional Treaty (which later became the Lisbon Treaty) did not succeed in integrating social and economic policies. It has to be noted that the European Union has no competences to deal with social security, which remains in the exclusive competence of its Member States. However, through its other polices like the ones on competition, internal market, economic and monetary union and several policy documents, it does have a possibility to directly influence Member States’ policies.

With the crisis of 2008, important new policy orientations were adopted, such as the social investment package and social innovation mechanisms. In the meantime, in all Member States, and because of strict fiscal policies adopted at the European level, unemployment rules are changing, social assistance is being curtailed, pensions and health care are being privatized, etc. In countries like Greece, Portugal, Spain and Ireland the consequences are really disastrous and can be compared to what happened in the South in the 1980s. In fact, all policies are oriented towards labour market participation and fiscal balance, believed to promote growth.

As for the South, as has been noticed already, poverty reduction policies have failed, and most countries are in a competitive bid in the globalisation context, not really ready and willing to introduce strong social policies. In terms of poverty, inequality and labour law, the situation is dramatic and, in general, worsening.

Asia certainly is a case in point. The continent can be considered the world’s most dynamic economy, in 2012 it generated 36 % of gross global GDP, it succeeded in boosting income per capita, yet there is a remarkable rise in income inequality and the region hosts two thirds of the world’s poor with 800 million people living with less than 1.25 US$ a day and 1.7 billion people living with less than 2 US$ a day.

Most countries of the world have recently witnessed movements of social unrest. They concern young people protesting against their lack of perspectives for the future, middle classes protesting against the privatization of public services, workers against bad labour conditions, women against the elimination of their rights, people in general against poverty and inequality. The slogans ‘another world is possible’ and ‘we are the 99 %’ were globally heard and understood, and continue to inspire new movements.

This is the context in which all international organisations, from the World Bank to the European Commission, via the ILO, UNICEF and OECD (Organisation for Economic and Development Cooperation), now propose to introduce ‘social protection’.

However, the social protection that is on offer has nothing to do with welfare states. For one, it is only meant for poor people and even if the ILO emphasizes it concerns ‘universal rights’, it only focuses on the poor and the needy. Secondly, most organisations – except the World Bank – start with the important statement that social protection is a human right. But immediately afterwards, they start listing all the economic advantages that are linked to the introduction of social protection: it favours growth and productivity, it functions as an economic stabilizer, it promotes economic activity and entrepreneurship… When analyzing the different proposals, one cannot but conclude that the protection of people is only a far away objective. The main aim of social protection is to be at the service of the economy and it will allow for creating new markets in sectors of education, health care, care for the elderly, etc. In a nutshell, with the exception of the Social Protection Floor of the ILO, social protection is fully compatible with neoliberal policies, in the same way as were the poverty reduction policies and the MDGs. If fully implemented, the ILO proposals can break away from neoliberalism, but it remains to be seen if governments will be ready to go that way.

The question then is: how to react?

Till now social movements have hardly reacted. Clearly, trade unions support the ILO proposals since they participated in the coming about of the recommendation. Most NGOs accept the international agenda, being happy, as always, with every small ‘social step’ that is being taken. A global coalition for social protection is now pushing and lobbying for having this issue in the post-2015 agenda. A major problem however is that there are almost no movements that have a general position on social protection. Trade unions care about labour law and social security, human rights movements look at women, or children, or indigenous people, or pensioners, or disabled persons, or refugees, etc. Development NGOs look at health care and education. The world of economic and social rights is very fragmented.

A general picture and a comprehensive project are lacking. In the meantime, the neoliberal project is being implemented. It is time to react. Where do we want to be heading? What future do we want for people, for workers as well as for the poor, the pensioners, the refugees, the disabled persons, etc. Can we re-think a social project able to motivate and mobilize people while also able to strengthen democracy and society?" (via email, May 2014)

More Information

• Francine Mestrum proposes to replace social protection with the Social Commons