Global Welfare Statehood – the Alternative of the Socialist International to Global Social Irresponsibility
PARIS COUNCIL: global economy - climate change - resolution of conflicts, 15-16 November 2010
1. In its statement “Setting the Global Economy on a New Path”, the Socialist International introduced the political idea of Welfare Statehood as the basis for a global order that is socially inclusive at its XXIII Congress in Athens in 2008. The statement establishes that: Neo-liberal globalisation has undermined the ability of states to steer their economies according to given aims, such as full employment, growth or redistributive taxation. But these aims are global aims. Broader global cooperation and coordination are needed to meet these objectives.
Regulation, redistribution and public goods are the principles upon which the Welfare State is based and have now become the basis for a global order that is socially inclusive.
• Regulation has to be sustainable and effectively implemented.
• Redistribution has to be socially fair.
• Public goods have to be accessible to everyone.
In its statements at following councils, the SI spelled out the political approach which goes along with the notion of “Global Welfare Statehood”.
2. The global financial crisis with its devastating impact on global economic development in 2009 and the emergence from the crisis in 2010 with its unacceptable effect on social human rights, distribution of wealth and income and on social security in many countries has shown how necessary this Social Democratic notion of Global Welfare Statehood is. This means that each and every human being has a legal claim to social security guaranteed by the state which must be met by the community of states acting in solidarity. Only in this way can the same opportunities for all be achieved. It is high time that we Social Democrats elaborated and assertively promoted this notion. By the same token, it must be made possible to perceive differences in development, differences in global social conditions such as the inequalities in the socio-cultural conditions of the regions and countries of the world, and these must be made clearly visible in our global strategy of political responsibility.
3. The normative foundations for our position have been in place since the end of the Second World War and the founding of the United Nations. These foundations include the Universal Declaration of Human Rights and the International Covenant on Economic, Social and Cultural Rights from 1966 as well as the Conventions of the International Labour Organization (ILO). The former has been ratified on behalf of the overwhelming majority of people on earth, including for 1.1 billion people by India in 1979 and for 1.3 billion people by China in 2001.
Social security is bindingly set out as a human right in these agreements. Particularly important in this regard are Articles 6 and 9. The right to work is enshrined in Article 6, while the states which are signatory to the Covenant recognise the right of each and every human being to social security in Article 9. This includes the right to social insurance.
The Covenant also takes into account that not all individual states are in a position to establish and safeguard the respective social order and developed stipulated in these agreements. This requires international, i.e. global, solidarity. Art. 2 (1) states that “Each State Party to the present Covenant undertakes to take steps, individually and through international assistance and co-operation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means, including particularly the adoption of legislative measures.”
This provision in Art. 2 serves as the basis for Global Welfare Statehood. To implement article 2 several international institutions have been founded and instruments like the world solidarity fund.
4. It is true that it has been possible to establish Welfare Statehood in Europe thanks to a high level of economic development. It is wrong, however, to see this only as an element of competitiveness and to believe that this is therefore only possible in rich states. In a world which is seeking to overcome differences in development, the political principles of Welfare Statehood can be endorsed and applied to all states and regions of the world. This is indicated by examples in many states of the world, for example by Japan for many decades now. Many less developed states have already successfully taken measures- Mexico, Brazil and Chile, for example. Argentina, China, India, Thailand, Ghana, Mozambique and South Africa have introduced important elements such as family benefits, access to education and health services. Cambodia, Equator, Burkina Faso, Togo and Benin have recently made commitments to start building their own Social Protection Floors.
Latin America has also been moving in this direction for ten years now. Social security can and is thus being improved with growing national product.
In retrospect looking back to the beginning of the 21st century, the prospects for global sustainable development as formulated by the UN North-South Commissions under the chairmanship of Willy Brandt and by the Commission for Sustainable Development under the chairmanship of Gro Harlem Brundtland constitute Global Welfare Statehood.
It has become increasingly evident over the past two decades that the technological and societal processes which guided development in Western Europe and North America since the 19th century have become global since the 20th century.
Industrial production has become possible for the great majority of states and thus their citizens. Levels of development, with China, India and Brazil (accounting for more than 40% 0f the world’s population) leading the way, have risen continuously.
The number of children per woman has declined and with this development the traditional family has lost its social function as providing a community of social security.
Life expectancies are on the rise, which means a growing need for state old-age and health care.
These global trends make the notion of Welfare Statement a global challenge. But Global welfare statehood is not only a challenge, it also offers tremendous opportunities and trade-offs. Extended social security raises productivity, reduces poverty faster and decreases economic inequalities and political instability. At present four out of five people worldwide do not benefit from a level of social protection that allows them to realize their human right to social security. Ensuring a basic level of social protection and thus a decent life for these people – many of whom are struggling just to survive – is a necessity and an obligation under the Human Rights Instruments. Such is the objective of the Social Protection Floor initiative, initiated by the International Labour Organization (ILO).
The Social Protection Floor approach promotes access to essential social security transfers and social services in the areas of health, water and sanitation, education, food, housing, life and asset-savings information. It emphasizes the need to implement comprehensive, coherent and coordinated social protection and employment policies to guarantee services and social transfers across the life cycle, paying particular attention to the vulnerable groups.
5. Welfare states are characterised by:
• High employment,
• A labour market with a strong and independent trade union movement and strong collective agreements,
• Employment insurance,
• A strong public sector,
• A fair tax regime,
• Education and training for everyone,
• Efficient social and pension systems,
• Health care for all.
Welfare states are developed on the basis of values such as social justice, solidarity and full employment. These values are not contrary to dynamic economy and sustainable development.
5.1 Welfare states are embedded in a democratic market economy with private property. The key characteristics of social organisation in welfare states are:
• Strong public finances through the economic cycle. It is not only a question of reducing vulnerability to an open economy, it is also the basis for a well-functioning economy, with low inflation and high increases in real wages.
• Strong public sectors, characterised by health and education and training being more publicly dominated and universally oriented, including everyone.
Overall tax levels in more developed states are higher than in other states, but these also seek to equalise incomes. An acceptable level and efficiency of taxation is the best way to avoid budget deficits.
5.2 Social bridges – a policy of protecting workers and employment. There are three main types of social bridges, life-long learning, adjustment insurance and re-introduction to working life. By providing social bridges one creates a flexible, dynamic society ready to adjust – even if it is painful.
5.3 Gender equality, including equal wages, is an essential part of social justice and human rights and thus an integral component of the welfare state. Important aspects include: Policies designed to help both men and women combine working life with parenthood and private life. High quality public childcare centres and a shared parental leave-system. The system delivers: gender equality and therefore achieves a high level of employment. Gender equality will contribute to the assertiveness of women.
5.4 Integration of the youth into their societies will largely depend on the improvement of global welfare statehood.
6. Increased information about and awareness of the basic values behind Welfare States are the first steps towards political ideas and strategies that will have a positive effect on development, including in less developed states. The main challenge is to explain the interconnection between implementation of properly functioning social protection, social inclusiveness, equal opportunities and sufficient and fair taxes.
It is necessary to initiate a global debate how to convince citizens that publicly financed social security is to everyone’s advantage. In many states, tax legislation and collecting taxes are a real and understandable problem.
7. This concept of the Welfare Statehood contradicts the informal labour and informal social security prevailing in the majority of countries in the world. All this must be overcome in a step-by-step, but sustainable, manner in order to attain successful development in the 21st century.
Social security transfers are particularly hard to implement in the less developed states since the preponderant part of employment in these countries takes place in the informal economy.
This creates possibilities for progressive political parties to contribute to establishing social protection in the informal economy.
Globally, up to 90% of employer-employee relationships are based upon informal work; these numbers are particularly high in the less developed states. Informal employment may take on different forms, but all the various types share one feature: they are not officially recognised and thus the employees have no possibility to benefit from legal social protection. This issue affects above all the weakest segments of society, such as young people, women or migrant workers.
Different perspectives on the problem are being discussed: the legal point of view with regard to labour law as well as human rights, the role of the civil society, especially with respect to the organisation of workers in trade unions, and a gender based approach to social security in the informal economy.
The most controversial topic is the impact of law:
On the one hand, it is almost invisible when it comes to immediate effects. This is due to problems in implementing legislation, especially in less developed states that often suffer from weak governments.
On the other hand, the legal structure is in the long run a very important means with which to improve the situation of informal workers. In fact, well-established labour laws can help informal workers organise themselves and eventually stand up for their right to social security as complementary to the International Covenant on Economic, Social and Cultural Rights.
The second important issue is the organization of workers and more specifically the role of trade unions in the informal economy, including the importance of civil society as a substitute for governmental support.
The concept of Global Welfare Statehood will contribute to sustainable development including the challenges to tackle climate change, and to acceptable free movement for capital and people including the equality of rights for migrants.