What Role Did the Welfare State Play in the Post War Regime of Accumulation?

What role did the welfare state play in the post war regime of accumulation?

The above question can be restated; what effect did the welfare state have on the post war regime of accumulation? I plan to argue that the welfare state played a hugely significant role in the post war regime of accumulation because it was actually its context. The ending of the Second World War marked a puncture in capitalism in that it ushered in both a new form of state and a new regime of accumulation which formed and developed within the welfare state countries, thus the role of the welfare state was to mediate, or shape the post war regime of accumulation. I plan to show this by briefly mentioning the pre-war equivalent, and by discussing the major elements of the post war welfare state and its impact upon the regime of accumulation.

Some definition of terms and setting of context is of value. Broadly speaking, the term Ð''welfare state' describes a nation state in which the central authority assumes responsibility for the wellbeing of its population through outlining a minimum standard of living which is the right of its citizens and attempting to ensure its citizens do not fall bellow this minimum through such policies as the payment of benefits to the needy, a commitment to high employment and the maintenance of social services. Secondly, a Ð''regime of accumulation' can be defined as a form in which capital is organized or expanded for a period of time with some stability within the context of Ð''modes of regulation' which are constructs of law, forms of state, policies etc. Hence, building on my argument, the post war modes of regulation can be grouped together under the banner; Ð''the welfare state'.

It is of importance to approach this essay from an international viewpoint, since the regime of accumulation was itself an international one even if not to the extent of the world today, welfare state ideology, and Fordism, (discussed later) were international phenomenon. The post war world and the western states had been devastated by the Second World War and desperately needed rebuilding. The United States emerged from the conflict as the clear hegemon and sought to use its superiority to shape the new economic order. In what Charles Maier has termed Ð''the politics of production', the United States sought to transform political issues into problems of output, to adjourn class conflict for a consensus on growth. Thus, the United States aimed for a prosperous and peaceful Europe, and its economic concepts for the continent suited policies of Keynesianism and the welfare state;

Ð''The mission of planning became one of expanding aggregate economic performance and eliminating poverty by enriching everyone, not one of redressing the balance among economic classes or political parties'

Clearly these ideas fitted those welfare notions of equality and universalism, the role of the United States was crucial towards the role of the welfare state as it was through their foreign aid that the European nations were able to spend on and develop such policies as welfare, and further benefit to the welfare state came from the Marshall Plan authorities, who endorsed Keynesian type thinking. With these points in mind, despite forms of welfare state being as divergent as those of the United States and Sweden, for the purpose of this essay I plan to group them under the banner of Ð''the welfare state'.

Thus the regime of accumulation established after the Second World War was led by the United States and differed from the previous model in that floating exchange rates were replaced with fixed ones, the United States after the war was determined to establish multilateralism in favour of discriminatory trading policies and trading blocks in order to enhance its markets. Intergovernmental collaboration to facilitate a balance-of-payments equilibrium within domestic environments of full employment was thus pursued by the hegemon in order to achieve these desirables . Again, full employment suited welfare policies but it should here be mentioned that the international conditions were, in essence, dictated by the United States as a pursuit primarily of self-interest rather than romantic ideas of welfare for all nations. Though the United States wanted an economically prosperous Europe, it was for its own market purposes first, and strategic considerations second, but multilateralism in trade was the initial priority.

The welfare state can find its origins to some extent in the social and economic consequences of the Great Depression, the catastrophic effects of which generated much criticism of the previously dominant school of economics, the classical approach. Of this criticism, the work of John Maynard Keynes can be seen as the most important; Keynes rejected the idea that a self-regulating market brought about the maximum utilization of available resources; suggesting recession can come about because of an inability of the market to respond to crisis with collective action. Keynes thus advocated for discretion over monetary policy through state intervention in order to avoid the economic consequences of market inefficiencies. Clearly then, Keynesian economics were compatible with the ideals of the welfare state and their implementation can be seen as having significant affects upon the regime of accumulation; broadly grouped together; a massive increase in state intervention in the economy.

One such role, the commitment to full or near full employment through government interventions (such as an increased public sector) was key to the Keynesian model and the welfare state, and was a clear break from previous ideas that labour was no different to any other commodity and thus should be subject to the laws of supply and demand. Unemployment in the UK even after recovery from the depression in 1940 stood at around 10% whereas once the welfare policies were in full swing they had been reduced to around 2% and this high employment rate was to continue until the early 1970s. Thus the welfare state and Keynesian economics maintained a high employment rate, along with an associated increased saving and consumption and a stable inflation rate which characterized the Ð''golden years' pointing to the conclusion that the welfare state significantly altered the regime of accumulation.

A key illustration of a regime of accumulation and the example of which I am predominantly discussing is Fordism. The term derives from the successful implementation of the assembly line by Henry Ford in the early twentieth century and the associated improvements in mass production method, as well as the