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The political economy of inequality--reformism or socialism?

Article Excerpt
Jonas Pontusson, Inequality and Prosperity: Social Europe vs. Liberal America (Ithaca, NY: Cornell University Press 2005)

JONAS PONTUSSON IS A POLITICAL science professor at Princeton University who in the recent past has been known to critique social democracy, particularly in Sweden, from a socialist perspective. (1) However, the thrust of the book under review here is to provide an empirical and analytical rationale that social democratic regimes (especially those of the Nordic nations) have performed well in economic and social terms in the post-World War II era in comparison with other capitalist nations but especially in comparison with the neo-liberal United States. Indeed, some other forms of social welfare regimes in Western Europe have also done better than has the United States, thus setting up Pontusson's sub-title of "social Europe versus liberal America." It is an examination of what Pontusson refers to as "comparative political economy" with a focus on finding similarities, and particularly differences, among Western industrialized capitalist economies. Pontusson believes that while capitalism inevitably generates inequalities in the distributions of wealth and income, nonetheless, there can be a wide range among them in terms of how adversely the majority of their citizenries are affected. Neo-conservative, neo-liberal, moderate or centrist, welfare-state liberal, and social democratic governments can, and do, make some differences in how unequal economic inequality is.

In his comparative analysis, Pontusson has chosen to focus on economic indicators rather than on political (and social) indicators and analysis. In order to further such a presentation he has developed a typology which is as follows: SMES (social market economies which encompass Germany, Austria, Switzerland, Belgium, the Netherlands, Denmark, Sweden, Norway, and Finland); LMES (liberal market economies which include the United States, Canada, Australia, Ireland, and the United Kingdom); and then certain "outliers" including France, Italy, and Japan. Many of his empirical comparisons utilize these categories but complexities arise when some of the outliers share characteristics with the SMES--and when some of the SMES or the LMES are outliers themselves. Time and space could be spent dealing with these issues but that is not really my main focus here. What is important to note, at this juncture, is how Pontusson's typology is distinct from, but refers to, what has come to be the more conventional classification of Western welfare state regimes. In his 1990 book, Esping-Andersen discussed three "types" of welfare states (really three "clusters" of welfare states) which could be differentiated from one another: the social democratic, the liberal, and the conservative-corporate (2) The first is occupied by the Nordic countries, the second by English-speaking nations with roots in the British Empire, and the third basically all of the rest. (The latter have been further broken down into "Catholic/Rudimentary" and "Achievement-Performance.') Pontusson recognizes his separate path and does attempt to provide an (overly brief) justification. What happens, in my estimation, is that the focus on differences among industrial capitalist nations and their respective social-economic performances (strengths and weaknesses) leads to a drift towards limited economic analysis and away from political and social analyses. Perhaps more importantly, by such a narrowing of focus the similarities among all these nations, which are rooted in the dynamics of the capitalist mode of production, largely get ignored.

Turning to some of these political and social issues for a moment, let me briefly identify the distinctions made among the three types of welfare states. This can best be accomplished with a quote by Julia O'Connor:

The social democratic regime is characterized by universalism in social rights, a strong role for the state, and the integration of social and economic policy, which is reflected in a commitment to full employment. In contrast, in the liberal regime state intervention is clearly subordinate to the market, and there is a strong emphasis on income-and/or means-testing for access to benefits. Where universalism is applied it is universalism with a focus on equal opportunity. The conservative welfare state regime is characterized by the linkage of rights to class and status through a variety of social insurance schemes and the emphasis on the maintenance of the traditional family. The latter is reflected in the public provision of social services only when the family's ability to cope is exhausted. (3)

Social democratic regimes emphasize universal rights of citizenship, the decommodification of social services, the comprehensiveness of social services, and the emphasis on full employment. Citizens accessing such services are seen as having a (human) right to them and not because they are victims to be bailed out of their plight through the kindness of the state or private welfare agencies. What is lost in Pontusson's economistic approach is any reference to the nature of the state in Western democracies, i.e. to theories of the state. In short, does a ruling class rule? What does it do when it rules and how does it go about the process? In that regard, for Pontusson, even the classic Poulantzas-Miliband debate of decades ago is not worthy of addressing. Its relevance is captured in Miliband's following statement:

The question does not ... depend on the personnel of the state, or on the pressure which the capitalist class is able to bring upon it; the nature of the state is here determined by the nature and requirements of the mode of production. There are 'structural constraints' which no government, whatever its...

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