Community in the Place of the State

Ross Allen

To picture Britain in the 19th century is to conjure classic Dickensian images of dark satanic mills, corrupt parish officials, deserving poor and, defining it all, a rife hotbed of rampant poverty, misery and inequity. Such conceptions are made all the more salient in comparison to the modern British welfare state, so much so that the common conception of transition from stateless dark to welfare light has been termed ‘the welfare state escalator’ by British historian Geoffrey Finlayson[i]. The truth, however, is that in the 19th century and throughout its history, long before the Beveridge Report or the welfare state were even glimmers on the political horizon, Britain had a welfare regime, and a strikingly highly developed one at that.

To understand this, we need to define exactly we mean when we use the term ‘welfare’. In Europe and North America at least, it’s become so synonymous with the intervention of the state that ‘welfare’ effortlessly reads as ‘government handouts’ to most. Yet, if welfare is defined simply as the temporary or permeant provision of aid to others and for oneself, it becomes obvious that a welfare system would include multiple components. In childcare, for example, the most important welfare provider is undoubtedly the family or household. This would hold true even for the most social democratic of welfare states today. In the sociology of welfare, the different segments of a welfare system as defined above, are often termed the ‘welfare mix’[ii] and comprise of not just the state (if the state is even prevalent at all) but also the family (including the household and relatives), the community (including neighbours and voluntary organisations) and the market (including employer provided schemes and the effects of economic growth). In fact, throughout pre-war history and in many areas of the world still today, the state, at least centrally, has been fairly insignificant compared to dominant and often highly complex systems of familial and community welfare.

When considering the welfare regime of pre-Beveridge Britain, for example, what is immediately striking is the extent to which the community was able to provide not charity but systems of social insurance that bore surprising resemblance to later 20th century state welfare provisions (many of which, including the Beveridge report recommendations, taking inspiration from and looking to supplement such organic private networks that were already in existence[iii]). As David G. George demonstrates in The Friendly Societies and Adam-Smith Liberalism[iv], when the liberal government enacted the National Insurance Act in 1911, over three-quarters (9 million individuals) of those covered were already covered by voluntary membership of one or more ‘friendly societies’, community run, local mutual-aid organisations that had their origins in informal gatherings of men who met up to socialise over drink. Over time, these gatherings had quickened into community groups where members would pool resources through membership fees and, in return, would be eligible for a whole range of social benefits including health insurance (in the form of cash benefits or care from a society’s own doctor), life insurance (if the breadwinner of a family died), old age support and even unemployment and travel support, the latter being a service provided primarily by industrial groups like the Manchester Unity to aid job-switching in the disruptive years of the industrial revolution. It has been estimated that approximately 45% of the adult working-class males had acquired the right to medical access through friendly societies by 1900[v] whilst even the very poorest who could not afford society fees regularly utilised charitable dispensaries and free departments in local voluntary hospitals[vi]. Thus, contrary to the common conception of the welfare state as the first progressive safety net in the United Kingdom, it was only the top tier of the middle-class that would regularly pay for medical care out of pocket during the 19th century[vii].

In addition to this, the family played a significant role in the provision of social transfers. In the absence of state pensions, and in addition to friendly society support, most elderly individuals would live with, and receive monetary support from, their children and children in-laws, in a traditional extended family mode of living that lasted even after the onset of industrial urbanisation. Michael E. Rose has also discussed the manner in which working-class housewives would operate complex credit mechanisms with one another for pawning goods in order to pay rent and purchase clothes and food[viii].

Despite all this, however, we must be careful not to let the rose-tinted shades shuffle too far up the bridges of our noses. Contrary to what some members of the New Right, particularly during the Thatcher years, have claimed, 19th century and early 20th century welfare regimes did not produce some kind of state-free Shangri la. Only middle-income working class men could afford to pay multiple friendly society fees and, as of 1900, 55% of working men were not covered with community social insurance[ix]. The regime also broadly excluded women and children, who were thus forced to rely, alongside the very poor, upon threadbare charity, such as doctors waiving fees, or what scant state provision was available[x]. Poverty was rife, with Seebohm Rowntree’s poverty surveys of York showing combined absolute and relative poverty rates of around 28% in 1899[xi]. Further studies suggest this was low compared to other areas of the country, such as Reading whose absolute poverty rate alone is predicted to have been around 30% in 1912 for a couple with three children[xii]. Infant and general mortality rates were also eye-watering and children, forced to work, were denied a proper education. However, the point is that, without a communal or familial welfare system of any kind, this situation would have been greatly worse. The informal welfare regime, despite its flaws, likely saved many from death and squalor.

A ‘welfare mix’ lens of analysis, thus, perhaps brings us closer to understanding what Ian Gough calls the “liberal alchemists dream”[xiii] of modern East Asian states, such as Taiwan, Korea and Japan, that appear to combine extremely low levels of government provision and expenditure with high health and welfare outcomes by international standards. In 2000, the then 15 members of the European Union had average public social spending equivalent to 34.1% of GDP[xiv]. For East Asia, the average figure was 7%, breaking down into 1.2% on health, 3.4% on Education and 2.2% on social security, compared to 6.8%, 5.0% and 22.3% respectively for the EU15[xv]. To compensate for this shortfall in state provision, many of the previously discussed patterns of communal and familial welfare gain in prominence. The rate of personal savings in most East Asian states has historically been exceptionally high. This, combined with the fact that extended and stem family households are common (In 1995 in Japan, South Korea, Hong Kong and Singapore, over 50% of all elderly individuals lived with their children – the rate for the UK was 8.4%[xvi]), creates strong systems of familial welfare, in which households pool their savings as social insurance and allocate it to relatives in times of need, rather like the Victorian ‘friendly societies’ but on a household level. In the 1990s in Taiwan and South Korea, over 50% of elderly income came from such support from children[xvii].

Welfare regimes are also strongly intertwined with culture in the sense that cultural values can influence individual and collective behaviour, advancing welfare outcomes. For example, the inevitable kick-back against the admittedly quite simplistic left-liberal idolising of Scandinavian big-state welfare systems has revealed some interesting findings. Primary among these is the finding that many of the welfare outcomes that Scandinavian states are so prized for pre-date the establishment of large state welfare provision in the 1970s and 80s. Norway, Denmark, Iceland and Sweden all top UN international rankings of lowest child mortality rates[xviii] and longest life-expectancies for 1960[xix], when all had relatively small public sectors, whilst inequality and poverty in Scandinavia had already shrunk greatly in the last three decades of the 19th century[xx]. To explain these long-term trends, Nima Sanandaji points to the high levels of trust, population homogeneity and a culture of family values, community and individual responsibility that have fed strong social cohesion and interpersonal support networks, as well as active and healthy living styles, like the much-touted Danish ‘Hygge’[xxi]. In addition, interestingly, such features, particularly high trust levels, can be found in Scandinavian immigrants and their descendants in the US, many amongst the latter of which having emigrated in the 19th and early 20th century long before big state welfare was introduced[xxii]. Cultural features such as this have also been prevalent, and still are to a great extent today, in Switzerland. A country with a highly decentralised small state, low taxes and modest, contributory and localised systems of social insurance, it nevertheless ranks similarly, if not higher, than the Scandinavian states on most welfare outcomes. 

To what extent, then, would it be fruitful for familial and communal networks to fill the gap that will inevitably be left as developed and developing states alike seek to adjust to the pressures of slower growth and globalisation by cutting social spending? There are two reasons to suggest that it would not be.

First, where family and community welfare regimes exist, not only do trends show they have existed in similar form for centuries (Confucianism places a strong emphasis upon the family as the main salient unit of social organisation in East Asian states[xxiii]), but many far less developed states also have similar welfare regimes. Research into the welfare mix of Sub-Saharan Africa has revealed strikingly similar systems to those employed in East Asia. Not only are intra-household transfers and extended families common, but systems of communal harvest insurance are regularly employed, where households will share crop surpluses with others in their locality, even those they do not know personally, under informal understanding that this will be reciprocated in times of hardship[xxiv]. In addition to this, Rotating Saving and Credit Associations perform very similar functions to ‘friendly societies’, providing risk-pooling and social insurance[xxv]. Yet, despite the impact this has on reducing poverty and risk, Word Bank data suggests that the poverty rate of Sub-Saharan Africa has stagnated, and even briefly increased, throughout the last 30 years, flatlining at around 50-55% at a time when East Asia was climbing quickly out of poverty[xxvi]. A similar scenario is seen in small-state welfare Southern European societies, like Italy and Portugal, where Catholic chartable funds and traditional family structures have failed to alleviate high poverty in comparison to European neighbours[xxvii]. In light of this, it is perhaps useful to look at other aspects of the welfare mix that may have led to what can not unduly be termed East Asian and Swiss exceptionalism, namely the market. East Asian miracle rates of growth are a well-known phenomenon and, at an average of 9% per year throughout the 1980s and 90s[xxviii], lifted many millions of individuals out of poverty. This, combined with a majority working age population, very few elderly and extremely efficient health and education systems that have managed to achieve almost universal primary care and primary education, despite few resources (Japan and Singapore’s healthcare systems were ranked amongst the top 10 in the world in the 2010 WHO rankings[xxix]) can account more for low public expenditure than family and community necessarily can.         

Yet, ultimately, the main reason that community and family are unlikely to bear the entire weight of the welfare burden from the state is simply that such networks tend to decline in the face of encroaching modernisation and globalisation. Declining fertility rates in fast developing and developed nations is a well-established phenomenon[xxx]. This, coupled with increasing life-spans and the disruption caused by the introduction of contraception and better healthcare outcomes, tends to both produce aging populations and reduce the pool of relatives from which the elderly and the young can depend, especially as extended and stem families nuclearize, and single-parent families and divorce become more common. Another key feature of modernisation is female empowerment and, seeing as most familial and communal structures rely heavily upon female support (In Japan in 1992, 73.9% of familial care-givers to the elderly were women[xxxi]), there is somewhat of an incompatibility, at least until men take up a greater role, between familial and communal welfare and gender equality. Even if familial and communal welfare structures did not have a tendency to decline, however, structural changes in mature economies make it increasingly difficult for such systems to cope. The globalisation and the shift towards knowledge-based rather than capital-intensive economies, which tends both to increase the skills premium and exacerbate regional inequality within societies, and the slowdown in economic growth that characterises mature economies (and has already set in in the more mature East Asian economies, like Japan) pose problems. They are difficult for families and communities, that rely exclusively on horizontal rather than vertical redistribution (and, thus, are severely affected by increasing inequality), to cope with.

None of this has gone unnoticed by East Asian governments in recent years. In an attempt to utilise the skills of women in reinvigorating its stagnating economy, Japan has invested in multiple ‘Angel Plans’ with the purpose of expanding access to the childcare market, traditionally very underdeveloped in the country[xxxii]. As of 2014, Japan spends more on social protection than the United Kingdom, totalling 17.8% of GDP[xxxiii]. In 2013, Taiwan was forced to raise its poverty line for the first time since its creation as NGOs like the Taiwan Fund for Children called for greater provision[xxxiv]. Even Singapore has recently introduced ‘individual learning accounts’, providing public money universally to all over the age of 25 to spend on education and training from approved providers[xxxv].

All of this demonstrates the possible danger posed by ruthlessly cutting away undiscerningly at government provision under the impression that the community can take the place of the state. A case in point is Scandinavia. Despite the undoubtedly large cultural aspect to its welfare mix, child poverty in Sweden would have been approximately 21.7% in 1995, approaching the 29.2% of the US, if it had not been brought down to approximately 2.7% once such taxes and transfers are factored in[xxxvi]. This phenomenon is echoed in Norway and Finland, though to a lesser extent, and possibly stems from the fact that many Scandinavian states are actually as unequal pre-taxes and transfers than the United States (Sweden again is a case in point here)[xxxvii]. Further to this, two studies by D. Bradley in 2003[xxxviii] and L. Kenworthy in 1999[xxxix] demonstrate, using the Luxembourg Income Study, that Sweden and Denmark both had absolute poverty rates of well over 20% in 1960 which fell dramatically to 5.8% and 5.9% respectively in 1991. Controlling for economic growth suggested little impact on this front, strongly suggesting that it was state welfare reforms during this period that held poverty down. This dramatic trend also held for most other nations surveyed, like Australia and the United States. 

Those who are greatly in favour of a return to community and family in place of increasingly centralised government welfare, such as James Bartholomew, author of the controversial indictment of the British welfare state: This Welfare State We’re In[xl], tend to advance several moralistic arguments. A key advantage of community and familial welfare is that it is democratic, decentralised and personal and, thus, highly flexible, allowing it to adapt to individual circumstances and promote self-determination and voluntary freedom of choice. Indeed, it is those state welfare systems that most emulate these values of personal responsibility, temporary aid and fluidity, such as the Swiss and Singaporean systems, that tend to be amongst the most efficient and little burdened in the world. Yet, despite this, Dickens was not wrong that, sometimes, as much as it provides a vital source of solidarity and the first line of welfare in all societies, the community and family do not operate in place of but alongside the state in a well-functioning welfare mix.

 References

[i] Finlayson, G. (1994). Citizen, state, and social welfare in Britain 1830-1990. 1st ed. Oxford: Clarendon Press: 3.

[ii] Ochiai, E. (2009). Care Diamonds and Welfare Regimes in East and South-East Asian Societies: Bridging Family and Welfare Sociology. International Journal of Japanese Sociology, 18(1): 60-78.

[iii] Gladstone, D. (1999). Before Beveridge. 1st ed. London: IEA Health and Welfare Unit: 1-9.

[iv] George, D. (1999) The Friendly Societies and Adam-Smith Liberalism. In Gladstone, D. (1999). Before Beveridge. 1st ed. London: IEA Health and Welfare Unit: 18-25.

[v] Morris, S. (2000). Defining the non-profit sector. 1st ed. London: The Centre for Civil Society, Department of Social Policy, London School of Economics and Political Science: 32.

[vi] Ibid: 32.

[vii] Ibid: 32.

[viii] Rose, M. (1990). Poverty and Self-Help: Britain in the 19th and 20th Centuries. [online] Available at: http://www.ehs.org.uk/dotAsset/485ac9a2-dec4-4a8f-83a6-2ba0b7a71589.pdf [Accessed 19 Jan. 2017].

[ix] Morris, S. (2000). Defining the non-profit sector. 1st ed. London: The Centre for Civil Society, Department of Social Policy, London School of Economics and Political Science: 32

[x] Ibid: 32.

[xi] Rose, M. (1990). Poverty and Self-Help: Britain in the 19th and 20th Centuries. [online] Available at: http://www.ehs.org.uk/dotAsset/485ac9a2-dec4-4a8f-83a6-2ba0b7a71589.pdf [Accessed 19 Jan. 2017].

[xii] Glennerster, H et al. (2004). One Hundred Years of Poverty and Policy. [online] Available at: http://eprints.lse.ac.uk/3913/1/One_hundred_years_of_poverty.pdf [Accessed 18 Jan. 2017]: 44.

[xiii] Gough, I. (2000). Welfare Regimes in East Asia and Europe. [online] Available at: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.199.2561 [Accessed 19 Jan. 2017]: 5.

[xiv] Ibid: 11.

[xv] Ibid: 11.

[xvi] Jacobs, D. (1998). Social Welfare Systems in East Asia: A Comparative Analysis Including Private Welfare. [online] Available at: http://eprints.lse.ac.uk/6522/1/Social_Welfare_Systems_in_East_Asia_A_Comparative_Analysis_including_Private_Welfare.pdf [Accessed 19 Jan. 2017]: 84.

[xvii] Ibid: 80-81.

[xviii] Data.worldbank.org. (2017). Mortality rate, under-5 (per 1,000 live births) | Data. [online] Available at: http://data.worldbank.org/indicator/SH.DYN.MORT [Accessed 20 Jan. 2017].

[xix] Data.worldbank.org. (2017). Life expectancy at birth, total (years) | Data. [online] Available at: http://data.worldbank.org/indicator/SP.DYN.LE00.IN [Accessed 20 Jan. 2017].

[xx] Sanandaji, N. (2015). Scandinavian Unexceptionalism. 1st ed. London: The Institute of Economic Affairs: 51-58.

[xxi] Sanandaji, N. (2015). Scandinavian Unexceptionalism. 1st ed. London: The Institute of Economic Affairs: 5.

[xxii] Ibid: 7.

[xxiii] Mendes, P. (2007). An Australian Perspective on Singaporean Welfare Policy. Social Work and Society International Online journal, 5(1).

[xxiv] Platteau, J. (1991). Traditional Systems of Social Security and Hunger Insurance. In Dreze, J., Hills, J., Sen, A. and Ahmad, E. (1991). Social security in developing countries. 1st ed. Oxford: Clarendon Press: 112-170.

[xxv] Ibid: 112-170.

[xxvi]  World Bank. (2016). Poverty and Shared Prosperity 2016: Taking on Inequality. Washington, DC: World Bank. doi:10.1596/978-1-4648-0958-3. License: Creative Commons Attribution CC BY 3.0 IGO: 25.

[xxvii] Gough, I. (1996). Social assistance in Southern Europe. Southern European Society and Politics, 1(1): 1-23.

[xxviii] Department for International Development. (n.d.). Growth: Building Jobs and Prosperity in Developing Countries. [online] Available at: http://www.oecd.org/derec/unitedkingdom/40700982.pdf [Accessed 19 Jan. 2017]: 11.

[xxix] World Health Organisation. (2000). The World Health Report 2000. [online] Available at: http://www.who.int/whr/2000/en/whr00_en.pdf [Accessed 19 Jan. 2017].

[xxx] Ochiai, E. (2009). Care Diamonds and Welfare Regimes in East and South-East Asian Societies: Bridging Family and Welfare Sociology. International Journal of Japanese Sociology, 18(1): 60-78.

[xxxi] Jacobs, D. (1998). Social Welfare Systems in East Asia: A Comparative Analysis Including Private Welfare. [online] Available at: http://eprints.lse.ac.uk/6522/1/Social_Welfare_Systems_in_East_Asia_A_Comparative_Analysis_including_Private_Welfare.pdf [Accessed 19 Jan. 2017]: 82.

[xxxii] Ochiai, E. (2009). Care Diamonds and Welfare Regimes in East and South-East Asian Societies: Bridging Family and Welfare Sociology. International Journal of Japanese Sociology, 18(1): 60-78.

[xxxiii] OECD. (2017). General government - General government spending - OECD Data. [online] Available at: https://data.oecd.org/gga/general-government-spending.htm#indicator-chart [Accessed 20 Jan. 2017].

[xxxiv] BBC News. (2013). Changing times force Taiwan to raise welfare spending - BBC News. [online] Available at: http://www.bbc.co.uk/news/business-22243977 [Accessed 18 Jan. 2017].

[xxxv] The Economist. (2017). Equipping people to stay ahead of technological change. [online] Available at: http://www.economist.com/news/leaders/21714341-it-easy-say-people-need-keep-learning-throughout-their-careers-practicalities [Accessed 18 Jan. 2017].

[xxxvi] Sweeney, J. (2002). Ending Child Poverty Today. Poverty Today, (55): 5.

[xxxvii] Our World In Data. (2017). Income Inequality. [online] Available at: https://ourworldindata.org/income-inequality/ [Accessed 19 Jan. 2017].

[xxxviii] Bradley, D et al. (2003). Determinants of relative poverty in advanced capitalist democracies. American Sociological Review, 68(3): 22-51.

[xxxix] Kenworthy, L. (1999). Do social-welfare policies reduce poverty? A cross-national assessment. Social Forces, 77(3), 1119-1139.

[xl] Bartholomew, J. (2004). The welfare state we're in. 1st ed. London: Politico's.