Social Policy in Times of Austerity: Global Economic Crisis and the New Politics of Welfare

198 Pages·2015·11.712 MB·English

by  Kevin Farnsworth (editor), Zoë Irving (editor)

IN TIMES OF AUSTERITY
Global economic crisis and
the new politics of welfare
Edited by Kevin Farnsworth and Zoë Irving
Social Policy in TimeS of
auSTeriTy
Global economic crisis and the
new politics of welfare
Edited by
Kevin Farnsworth and Zoë Irving
First published in Great Britain in 2015 by

Policy Press North America office:
University of Bristol Policy Press
1-9 Old Park Hill c/o The University of Chicago Press
Bristol 1427 East 60th Street
BS2 8BB Chicago, IL 60637, USA
UK t: [phone]
t: [phone] f: [phone]
[email protected] [email protected]
www.policypress.co.uk www.press.uchicago.edu

© Policy Press 2015
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record for this book has been requested
ISBN 978 1 44731 912 2 paperback
ISBN 978 1 44731 911 5 hardcover
The right of Kevin Farnsworth and Zoë Irving to be identified as editors of this work has
been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved: no part of this publication may be reproduced, stored in a retrieval system,
or transmitted in any form or by any means, electronic, mechanical, photocopying, recording,
or otherwise without the prior permission of Policy Press.
The statements and opinions contained within this publication are solely those of the editors
and contributors and not of the University of Bristol or Policy Press. The University of
Bristol and Policy Press disclaim responsibility for any injury to persons or property resulting
from any material published in this publication.
Policy Press works to counter discrimination on grounds of gender, race,
disability, age and sexuality.
Cover design by Policy Press
Front cover photograph: Getty Images
Printed and bound in Great Britain by CMP, Poole
Policy Press uses environmentally responsible print partners
contents
List of figures and tables iv
Notes on contributors vi
Acknowledgements ix
Introduction Social policy in the age of austerity 1
Kevin Farnsworth and Zoë Irving
one Austerity: more than the sum of its parts 9
Kevin Farnsworth and Zoë Irving
two Conventional wisdom on government austerity: 43
UK politics since the 1920s
Michael Hill
three The economics of austerity 67
Stephen McBride
four Neoliberalism, finance-dominated accumulation and 87
enduring austerity: a cultural political economy perspective
Bob Jessop
five Alternatives to austerity 113
Dexter Whitfield and John Spoehr
six Crisis, convulsion and the welfare state 143
Frances Fox Piven and Lorraine C. Minnite
Conclusion A new politics of welfare 171
Kevin Farnsworth and Zoë Irving
Index 177
iii
Social policy in times of austerity
list of figures and tables
figures
1.1 Public expenditure (percentage of GDP), 2005–7 and 2013 16
1.2 Social expenditure, 2007, post-2007 peak and 2014 17
1.3a Changes in public expenditure by department, 2007–8 to 19
2011–12 (2008 prices): Finland
1.3b Changes in public expenditure by department, 2007–8 to 20
2011–12 (2008 prices): Greece
1.3c Changes in public expenditure by department, 2007–8 to 21
2011–12 (2008 prices): Ireland
1.3d Changes in public expenditure by department, 2007–8 to 22
2011–12 (2008 prices): Sweden
1.3e Changes in public expenditure by department, 2007–8 to 23
2011–12 (2008 prices): United Kingdom
1.3f Changes in public expenditure by department, 2007–8 to 24
2011–12 (2008 prices): United States
1.4 Tackling fiscal imbalances: the ratio of tax increases to 26
spending cuts since 2009
1.5 Pre-crisis spending and planned austerity to 2019 (percentage 28
of GDP)
1.6 Unemployment averages in least and hardest hit countries, 30
2008 and 2012
1.7 Total value of state contribution to working families as a 33
percentage of take-home pay (two children, two adults, one
in work earning 40% average wage)
1.8 Wage increases/falls in the post-crisis period, 2008–10 34
2.1 Public wealth in Britain, 1700–2010 44
5.1 Corporate income tax rates and average effective taxation 126
indicators, EU-27 (1995–2012)
5.2 Trends in growth in average wages and labour productivity in 130
G20 developed economies (1999 = 100)
6.1 European countries with poverty rate increase between 144
2008 and 2012 (based on poverty line fixed in 2008)
6.2 Total public social protection expenditure (including 146
health) as a percentage of GDP, 1990 to latest year available
6.3 Child poverty rates, 2009 (percentage of children living 146
in households with equivalent income lower than 50% of
national median)
iv
List of figures and tables
Tables
2.1 UK unemployment rates, 1925–35 47
2.2 Annual unemployment rate averages and inflation rates in 55
the 1970s
3.1 Unemployment rates 71
3.2 GDP per capita, 2007–12 72
3.3 Public sector deficits and debt, and private sector debt 74
(percentage of GDP)
3.4 Gini coefficient change in market income inequality, 76
2007–11 (by percentage)
3.5 Gini coefficient percentage change in disposable income 76
inequality, 2007–11
3.6 Annual percentage change in household disposable 77
income, 2007–11 (by income group)
5.1 US comparison of estimated macroeconomic multipliers 119
v
Social policy in times of austerity
notes on contributors
Kevin Farnsworth is a senior lecturer in comparative, international
and global social policy at the University of York, UK. His research
interests include the political economy of welfare, welfare states and
economic crisis, and corporate welfare. He has published widely on
business influence on social and public policy, most recently in Corporate
Welfare Versus Social Welfare (Palgrave, 2012). He is co-editor with Zoë
Irving of Social Policy in Challenging Times (Policy Press, 2011) and the
Journal of International and Comparative Social Policy.
Frances Fox Piven is distinguished professor of political science and
sociology at the Graduate School and University Center of the City
University of New York, USA. She is the author or co-author of more
than a dozen books and hundreds of articles on social movements,
the welfare state, and social policy, most notably (with Richard A.
Cloward), Regulating the Poor: The Functions of Public Welfare, and Poor
People’s Movements: Why They Succeed, How They Fail.
Michael Hill is emeritus professor of social policy of the University of
Newcastle, UK. Since leaving Newcastle he has held part-time visiting
appointments at Queen Mary College (London), the London School
of Economics and Political Science, and the University of Brighton.
He is author of The Public Policy Process, Implementing Public Policy (with
Peter Hupe), Social Policy in the Modern World and Understanding Social
Policy (with Zoë Irving). In 2009 he was presented with the UK Social
Policy Association’s Lifetime Achievement Award.
Zoë Irving is a senior lecturer in comparative, international and
global social policy at the University of York. Her research interests
are in the social politics of economic crisis and austerity, and also in
the development of comparative welfare theory that accounts for
population size. She is co-editor with Kevin Farnsworth of Social Policy
in Challenging Times (Policy Press, 2011) and the Journal of International
and Comparative Social Policy, and co-author with Michael Hill of
Understanding Social Policy (Wiley Blackwell, 2009).
Bob Jessop is distinguished professor of sociology and co-director of the
Cultural Political Economy Research Centre at Lancaster University,
UK. He is best known for his contributions to state theory, critical
political economy, critical governance studies, the analysis of welfare
vi
NNootteess oonn ccoonnttrriibbuuttoorrss
state restructuring and, most recently, cultural political economy. He
has recently completed a 3.5-year funded project on crises of crisis
management in response to the North Atlantic financial crisis and
the Eurozone crisis. Recent books include: Towards a Cultural Political
Economy: Putting Culture in its Place in Political Economy (co-authored
with Ngai-Ling Sum, 2013); Financial Cultures and Crisis Dynamics
(co-edited with Brigitte Young and Christoph Scherrer, 2014); and
The State: Past, Present, Future (2015). His personal website and archive
are at bobjessop.org
Stephen McBride is professor and Canada research chair in public
policy and globalization in the Department of Political Science at
McMaster University. Current research interests include comparative
labour markets and social policy, new constitutionalism and the
political economy of austerity. Recent publications include Private
Affluence, Public Austerity: Economic Crisis and Democratic Malaise in
Canada, co-authored with Heather Whiteside (Fernwood, 2011), and
Orchestrating Austerity: Impacts and Resistance, co-edited with Donna
Baines (Fernwood, 2014).
Lorraine C. Minnite is an associate professor of public policy at
Rutgers University-Camden, where she serves as director of urban
studies and mentors doctoral students in the Public Affairs/Community
Development programme. She is the author and co-author of two
books on electoral rules and racial and class politics in the US, The
Myth of Voter Fraud, and Keeping Down the Black Vote: Race and the
Demobilization of American Voters (co-authored with Frances Fox Piven
and Margaret Groarke).
John Spoehr is executive director of the Australian Workplace
Innovation and Social Research Institute at the University of Adelaide
in South Australia. He is an associate professor and political economist
specialising in economic, employment and social policy. He currently
leads a project on the political economy of austerity in collaboration
with the Don Dunstan Foundation. Recent publications include State of
South Australia – Turbulent Times (2013) and The Engaging State – South
Australia’s Engagement with the Asia Pacific Region (2012) with Purnendra
Jain, both published by Wakefield Press.
Dexter Whitfield is director of the European Services Strategy Unit
and adjunct associate professor, Australian Workplace Innovation and
Social Research Centre, University of Adelaide. He has undertaken
vii
Social policy in times of austerity
extensive research and policy analysis of regional/city economies and
public sector provision, jobs and employment strategies, marketisation
and privatisation. Publications include Unmasking Austerity (Spokesman,
2014), In Place of Austerity (Spokesman, 2012), Global Auction of Public
Assets (Spokesman, 2010), Public Services or Corporate Welfare (Pluto
Press, 2001), The Welfare State (Pluto Press, 1992) and Making it Public
(Pluto Press, 1983).
viii
acknowledgements
This is the second edited collection we have published with Policy
Press on the subject of social policy and the (after)effects of the global
financial crisis. There is a sense in which this volume is a ‘sequel’
to Social Policy in Challenging Times (2011) and sometimes there is a
worry that the successor will have less impact or originality than its
predecessor. However, although benefiting from the collected works
included in ‘Challenging Times’, this book has different aims and
a different format. We are confident therefore that the quality and
breadth of contributions in this volume, and the range of approaches
to the examination and analysis of austerity, will provide readers with
new insights and perspectives on the politics and economics of welfare
after 2008.
In developing the book, we are grateful to Policy Press and especially
Emily Watt and Laura Vickers who have supported the project through
several stages, and have demonstrated their unique blend of motivational
skills and patience (often simultaneously) in its final production. We
would also like to thank the contributors for agreeing to include their
work in the volume. Each of them has brought something different
and important to a better understanding of the austerity story, and
they have all been a genuine pleasure to work with. As co-authors
we would also like to thank all those who have attended the various
papers we have delivered on the subject of austerity while preparing
the book, and the anonymous reviewer of the manuscript; we hope
we have done justice to the welcome comments we have received.
As we go to press, there is little to suggest that a major change in
policy direction will happen anytime soon. If anything, austerity
appears to be spreading and deepening across welfare states. We hope,
however, that the arguments and ideas presented in this book add force
to the momentum for an alternative vision to the austerity future of
welfare, or at least the possibility that an alternative vision exists.
ix