German State - No More a Frozen Landscape - Essay Example

?The German No More a Frozen Landscape Bismarck’s Welfare has been founded on the concept that the needs to look after the German citizens and provide them facilities such as “minimum wage and workplace” and other benefits including healthcare, pension, vacation and unemployment insurance so that they will perceive the state as a “social institution” that exists to safeguard their interest (Ebeling, 2007, p.4). Gosta Esping-Andersen, in an article titled The Three Worlds of Welfare Capitalism, points to a lack of “conceptual attention” on the welfare state because existing literature has focused on the “theoretical concerns with other phenomena” (Esping-Anderson, 1990, p.18). Criticising the trend of confining welfare state to the element of social spending, he contends that the social expenditures are “epiphenomenal to the theoretical substance” of welfare states (p.19). Thus, he denotes the inflexibility of continental welfare state system and refers to it as a “frozen continental landscape” deriving from the “frozen Fordism” existing in countries Germany, Italy and France and concludes that the situation favours a “status quo” in these countries (Palier and Martin, 2007, p.538). However, Scharpf and Schmidt (2000), as quoted in Palier and Martin (2007), challenges this notion and contends that social insurance based welfare systems “face the biggest difficulties” among welfare states (p.538). Therefore, to accommodate the changes in economy, the welfare state system of Germany has evolved to align with the transition and it may not be fair anymore to call it “a frozen landscape.” Palier and Martin (2007) contend that the Bismarckian welfare system has initially been unable to cope with the problems due to the rigidness of “their own tradition” while the other welfare regimes have done so by adapting to the changes through the implementation of various structural reforms (p.358). However, they concede to the fact that with some reforms introduced after the year 2000, the Bismarckian system has been able to incorporate drastic changes within their system, which may account for the emergence out of the frozen landscape. In the modern day of complex economy, states cannot focus too much on social welfare, ignoring other aspects that deserve better attention. Quoting Therborn (1983), Esping-Anderson (1990) argues that if one considers the historical changes in the activities of the states, it appears that only when countries invest the majority of its resources for “servicing the welfare needs of households” they can be called welfare states (p.20). But, it has transpires from historical evidence that countries usually spend a greater part of their funds on “defence” and “administration” than on social welfare and, therefore, no state can be called a welfare state (p.20). Therefore, it appears that Germany’s continued existence as a Bismarckian welfare state has become impractical, forcing them to adapt to the changing environment. The country, over a period of time, has hence been evolving various strategies and changing their rigid stance on welfare orientation, incorporating various changes in their systems. Gosta Esping-Anderson again finds a possible failure of the welfare states to stand up to the “edifice of social protection” which remained “frozen” due to socio-economic pressures of the past and the system became incompatible to the emerging economic conditions and needs (Esping-Anderson, 1996, p.2). Developing nations such as the US and UK have prospered in the twentieth century by their focus on developing technology rather than investing on social welfare schemes. However, it becomes evident from the examples of these countries that when aspects such as technology is accorded adequate priority, the resultant growth in industry as well as other employment avenues will offer the citizens better jobs and living conditions and thereby improve the overall standard of living. This situation also seems to have encouraged other nations in the world to follow their examples. In addition, spending too much on social welfare by ignoring other important aspects was not practical for all nations. Thus, during the 2000s, governments have been forced to adopt new policies that deviated from the “frozen Fordism” as postulated by Gosta Esping-Andersen (Palier and Martin, 2007, p.541). This reflects in Germany’s reform of the country’s federal law on educational benefits during 2000, increasing the “flat-rate educational benefits” and extending “legal rights” to parents for “part time work” (Hausermann, 2011, p.17). Similarly, Germany also incorporated some reforms in their pension policy during 2001, transforming the German system of pension into a “multi-pillar pension system” facilitating addition of funds to the basic pension schemes as well as the introduction of “universal minimum pensions” (p.20-12). Such policy and reforms have seemed to help the German state to meet its commitment to social welfare on the one hand and appease the labourers and trade unions on the other. It also becomes relevant that the earlier welfare state system has remained entrenched on the concept of “male breadwinner model” which has been the basis of the family policy of the state of Germany (Stiller, 2010, p.183). However, the problem of ‘welfare without work’ which first encouraged labour shedding subsequently demanded raising of female “employment levels” and, therefore, family policy measures shifted their focus to women’s ‘free choice’ between work and childcare (p.188). In this context, nations such as the US, UK and India has set good examples, where the concept of equal opportunities for women has been given priority. Some countries also implemented the reservation for women in certain job positions. This encouraged many women to take up jobs and support their families. This has further enabled the improvement of overall quality of life in these countries as educated women engaged in productive employment rather than assuming the role of home makers. Thus, over a period of time there has been an emphasis on the role of family for the development of the individual as well as society and, as a result, the concept of enhancing the “compatibility between family care and employment” became significant (p.189). These changes rather tend to suggest that the German system has now slowly begun to embrace the tested systems in the US and UK where female employment and the issue of family balance has long been a matter of priority both for the governments as well as citizens. Therefore, it can be construed that Germany has already evolved, from the stages of being a frozen landscape, as a nation of flexibility by adapting to the changing environment. Anton Hamerijck and Eichhorst also argue that Bismarckian countries have transformed “fundamentally over the last years” both in terms of institutional set up as well as performance, which supports a notion that Germany is transcending from its frozen state to a more productive phase by adopting the reforms appropriate to the needs of time (Hamerijck and Eichhorst, 2009, p.1). They find that Germany, along with other nations of Bismarckian welfare state regime, has been vigorously pursuing reforms as a measure of overcoming “economic and technological challenges” as well as the changing “social and demographic structures” (p.2). Therefore, they contend that the image of the country in academic literature as a “frozen welfare landscape” no more seems reasonable (p.2). To support this contention, they refer to evidence in terms of the reforms such as “retrenchment” of the 1970s that addressed the issue of welfare without work that entailed further institutional and “structural reforms” (p.5). Here, it becomes relevant that the concept of welfare without work can be cumbersome on the economy of nations and can affect their progress adversely. On the other hand, the present policy of social security schemes based on the productivity of the individual encouraged people to engage in productive employment as in the one hand they had the earning potential and on the other a guarantee that government will cover some of their expenses such as health, disability and pension, when they retire from their jobs. In addition, Hamerijck and Eichhorst also point to the reforms in the field of labour supply through instituting disability pension, early retirement, other unemployment schemes etc with a view to eliminate older and “less productive workers” from the labour market (p.6). Similarly, there also has been an entry of women in the labour market as a consequence of the reforms as well as the facility to “work part time” which has resulted in an increase in women’s representation in the workforce (p.12). All these changes have helped the German state to emerge out from its ‘frozen landscape’ status. Palier and Martin (2007) contend that in order to understand the systematic changes in the Bismarckian system, one has to focus on the “reform trajectory” and appreciate it based on the “cumulative but transformative development” where one reformation paves the way for the other through learning” (p.543). They also consider the activation of the “inactive population,” the “defamilialization of care” and the introduction of “competition and rampant privatization” in health insurance as drastic shift from solving the problems of Bismarckian regime (p.543). In addition, they find that the reforms that Germany introduced in their system in the early 1990s for “reducing the level of social benefits” by increasing the “contributivity,” has strengthened the link between one’s contribution and the benefits he or she receives in return (p.547). This, in turn, has resulted in encouraging people to engage more actively in employment as they felt that if they remain idle in the hope of social welfare schemes, they will not be receiving any of the benefits. Obviously, this policy has entailed in increasing per capita productivity. Similarly, from the beginning of 2000s, various structural reforms have taken place in Germany and the culmination of all the institutional and structural changes in “social insurance and new employment policies” signalled a “general paradigmatic change” in the state (p.550). Moreover, it is seen that Bismarckian systems are undergoing drastic changes due to the reforms, which has entailed in the “dualization” of the welfare system as well as the “population” protected by it (p.550). This dualization suggests a “political dynamic” that Bismarckian systems have themselves created (p.550). Stiller (2010) also testifies to the evidence of “far-reaching reforms” in Germany which signals the transformation in various social policies relating to healthcare, pension schemes and labour market policies and thus foresees the country as the “latest likely candidate for reforms (p.15). The author also contends that situations like lack of employment opportunities, slowing down of economic growth, high “tax burden on labour” as well as the mounting social as well as financial implications of “reunification” have combined to exert pressure for reformation in the German state (p.16). In addition, it is also seen that “adverse demographic trends” such as rapid ageing of the population as well as a fall in fertility rates have also contributed to intensify the pressure for change (p.16). Thus, Germany has had to adopt drastic institutional and structural changes in their system to adapt to various developments in social, economic and demographic environment in the country that kept evolving. Thus, despite the notion that Germany evokes the concept of a frozen landscape, keeping in view of the “profound transformations across several policy areas” one has to acknowledge that the country has eschewed its rigidness and allowed necessary reforms in their system and, thus, emerged out of its frozen landscape status. From the evidence emerging from the above discussions, it transpires that Germany has been rigidly following the concepts of Bismarckian welfare state structure, laying emphasis on the aspect of social welfare as their primary agenda. However, as various social, economic and demographical changes occurred in the world, these transformations necessitated long lasting repercussion on various aspects of the society. The resultant situation also reflected in the labour markets across the world, including Germany and they had to change their policy from a social welfare perspective to productivity oriented welfare policies. Similarly, in order to adapt to the evolving situations, the country had to implement various policy changes in their system. Thus, from the 1990s the country has implemented various policy reforms, which have been intensified during the early 2000s. The changes in policy mainly reflected in social security, healthcare and unemployment insurances as well as family welfare. The country has, thus, been able to emerge out of their status of being a rigid welfare status, whose edifice is based on a ‘frozen landscape’ and emerged as a flexible nation that adapts to various changes within the society. Thus, at this juncture, it is not fair to consider the German state as frozen landscape. References Ebeling M. R. 2007. Marching to Bismarck’s Drummer: The Origins of the Modern Welfare State. The Freeman: Ideas on Liberty. Retrieved May 14, 2013, from Esping-Anderson, G. 1990. The Three Worlds of Welfare Capitalism. Princeton, New Jersey: Princeton University Press. Retrieved May 14, 2013, from Esping-Anderson, G. 1996. After the Golden Age? Welfare State Dilemmas in a Global Economy. London: Sage Publications Ltd. Retrieved May 14, 2013, from Hausermann, S. 2011. Post Industrial Social Policy Reforms in Continental Europe: What Role for Social Partners? 18th Conference of Europeanists. Retrieved May 11, 2013, from Hemerijck, A and Eichhorst, W. 2009. Whatever Happened to the Bismarckian Welfare State? From Labour Shedding to Employment Friendly Reforms. IZA Institute for Study of Labour. Retrieved May 11, 2013, from Palier, B and Martin, C. 2007. From ‘a Frozen Landscape’ to Structured Reforms: The Sequential Transformation of Bismarckian Welfare Systems. Social Police and Administration, Vol.41 (6): pp. 535-554. Retrieved May 11, 2013 from Stiller, S. 2010. Ideational Leadership in German Welfare State Reform: How Politicians and Policy Ideas Transform Resilient Institutions. Amsterdam: Amsterdam University Press. 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