Researchon Poverty Discussion Papers

This paper reviews current criticisms of the welfare state, in particular those put forth in West Germany and Austria. The review is set against a background of alternative attitudes toward social policy-attitudes forming a spectrum of ways in which the term "social policy" may be defined in Europe. It is pointed out that the "crisis of the welfare state" is not solely a fiscal crisis. It must also be seen as an indicator of a "systemic crisis," characterized by, among other problems, negative effects of social welfare policy on individual freedom and private initiative, by the emergence of a new class of underprivileged members of society, and by an increasing degree of centralization, bureaucratization, and professionalism. While none of the alternative attitudes toward social policy would deny the existence of these problems, they would disagree substantially about their relative weights and about the implications to be drawn for future welfare policy. -----_._--_._~_._~-European Views toward Social Welfare Policy Due to the substantial differences between the political systems in western Europe, "European social welfarepolicy"can only be conceived of as a conglomerate of different schools of thought, varying emphases on political and social issues, and alternative sets of instruments to achieve policy goals. Neither in politics nor in science is there a general agreement on how broad the scope of social welfare policy should be, or on what policy areas should be included in an enumerative definition. The relation between "economic policy" and "social policy" is a special subject of dispute. The intent of this paper is twofold. l First, it outlines the spectrum of schools of thought underlying views of social welfare policy in Europe. Second, it attempts to give an overview of the chief criticisms directed against social welfare policy by summarizing the current discussion in some European countries, particularly Germany and Austria. In Section I we highlight the variety of schools of thought by describing three positions, which we term the liberal position, the "security net" position, and the position of integrated social policy. We then describe briefly how one of these schools--representing a kind of medium position--can be translated into a concept of economic order: the concept of "social market economy," as found in the Federal Republic of Germany (FRG). Against this general background, Section III reviews the main line of criticism directed at current welfare policy in Germany and Austria. We emphasize fundamental challenges to the welfare state rather than policy issues of more local relevance.