The Social State under Attack

The Social State under Attack

By Christoph Butterwegge

[This article originally published in: Ossietzsky 2/2004 is translated from the German on the World Wide Web, http://www.sopos.org/aufsaetze/403224bfd7cf5/1.phtml. Christoph Butterwegge is a professor of political science at the University of Koln.]

Although no one doubts that the social state is in a profound crisis, we should not speak of a “crisis of the social state” since that suggests the social state is the cause of the problems or social deformations. The social state actually suffers under the crisis of the capitalist economic system that has not guaranteed either an adequate growth or a high level of employment for decades.

Four factors are mainly cited in the public discussion for the problems of the social state:

Excessive generosity. The German social state is too liberal with its benefits, is increasingly overstrained financially and causes the opposite of what was really intended.

Massive abuse of benefits. That people not entitled to claims profit from social benefits may not be prevented since effective controls are lacking. The social state is used according to the “logic of the cold buffet” even if one doesn’t seriously need assistance.

Demographic change. Through the falling German birth rate and the rising life expectancy on account of medical progress, an “aging” occurs that weakens the potential economic output and overstrains the social security systems (pension-, care- and health insurance).

Globalization process and positional weakness. Because of the intensifying world market competition, Germany’s sickly position must be “purged” and the social state “trimmed” to maintain competitiveness and prosperity. To its critics, the social state is regarded as outdated by the economic-technological development, an obstacle to the economy and the greatest barrier to investment.

The following responses can be made to these misunderstandings or misjudgments spread mostly by lobbyists and neoliberal opponents of the social state:

Empirical social state research has demonstrated that Germany – contrary to the dominant media pictures and the mass consciousness – is in no way the “most generous” European social state but has fallen far behind compared with the other 14 European Union states since the 1974/76 worldwide economic crisis and since the Schmidt/Kohl change in government in the fall of 1982 and ranks today in the lower half (8th or 9th place). The rate of social benefits (share of social expenditures in the gross domestic product) at 33 percent is not higher today than in the middle of the 1970s despite the increased unemployment rate and the burdens of German unification.

The misuse of the social state by unauthorized persons is kept within reasonable limits contrary to numerous reports (from the popular press) about spectacular isolated cases and the gossip about “social parasites”. All serious studies confirm that the deplored misuse of benefits is not a mass phenomenon and the social state is not financially drained. Rather these loud complaints divert from a more extensive misuse in the higher strata of society (income tax returns of higher-income persons and owners of capital; subsidy swindles).

The demographic development perspectives become darkened in the public and the media into a true horror scenario. However payees are lacking, not babies. This problem can be overcome through consistent combating of unemployment, increased rate of paid women workers, relief of immigration or extension of the circle of the insured to officials and self-employed persons. The demand for generational justice reinterprets social injustices existing within all generations into a distribution conflict between the old and the young. The combative political term “generational justice” diverts from a gulf between poor and rich that is growing dramatically in Germany and other parts of the world.

Cuts in social benefits are not social reforms but a relapse into the 19th century when society was unable to protect its members from general life risks on account of inadequate resources of its members. Today society is richer than ever and the social state is indispensable for the society altogether and for the socially disadvantaged. Germany whose export-oriented economy is one of the main winners of the globalization process can afford a developed social state on account of its continuously growing prosperity that is distributed ever more unequally. This social state may not be dismantled if it wants to maintain democracy and inner peace on one hand and remain competitive on the other hand. Even in the framework of neoliberal positional logic, there are good reasons for an expansive social policy compared with other less successful “economic positions”.