Download III. Path to Semi-peripheral Welfarism

FROM “SEMI-PERIPHERAL WELFARISM” TO NEO-LİBERAL SOLUTIONS: WHAT
ABOUT NEW PERSPECTIVES?- DEVELOPING WORLD AND TURKEY
Sinan Sönmez
Atilim University
Department of Economics
06 836 Incek-Ankara/Turkey
Tel. + 90 (312) 586 86 17
Fax. + 90 (312) 586 90 91
e-mail. [email protected]
Presentation for RC 19 Conference on “Social Policy in a Globalizing World”
September 6-8, 2007, Firenze
Abstract:
The social policies compatible on theoritical grounds as well as in practice –in
developed capitalist countries- with the traditional –keynesian- social welfare state were
subject to a conversion in the neoliberal globalisation context. Compared to relatively welldefined concept, characteristic of the industrialized countries the capitalist welfare state had
different characteristics in semi-periphery –so called emerging market economies- this is
what we call “semi-peripheral welfarism” (SPW). It is not easy to give a precise and universal
definition of SPW as it is rather a heterogenous concept; SPW varies according to regions
and/or countries. But it is possible to point out the differences between the well-defined
welfare state and the SPW. Nonetheless SPW is in conflict with the neoliberal arrangements.
The aim of this paper is not only to explore the conflict between SPW and neoliberal policies
but also to emphasize the conversion and convergence of the system under neoliberal rules.
Within this framework social protection and modes of provision of public/social goods and
services will be underlined by making special reference to Turkey.
JEL Classification: H41, H44, H53, H55, I31
Key Words: Fordism, post-Fordism, peripheral-Fordism, semi-peripheral welfarism, social
welfare, structural adjustment, post-peripheral fordism, market-led globalist
welfarism,neoliberal(ism), globalisation, Turkey.
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I. Introduction
The term welfarism which was first introduced to economic literature by Hicks had
been developed by Sen in the context of the debate on social justice. All of the theoritical
approaches on welfarism deals with the welfare of the people or welfare of the society
including the distribution of economic goods. Therefore a wide range of policies and
arrangements must be taken into account in the measurement of the wellfare. In fact “a full
consideration of taxes, subsidies, transfer programs, health care reform, regulation,
environmental policy, the social security system and educational reform must ultimately
address the question of how these policies affect the well-being of individuals”
(Slesnick:1998: 2108). Moving from individual to societal level bring up the concept of
social welfare and -social- welfare state. Social welfare encloses the welfare of the society
but also the welfare of each individual.. The role of the state is primordial in formalizing the
social welfare.
Social welfare state in theory implies the provision of social or public goods by the
public body at least regular quality as well as an equal consumption of these goods by the
individuals This policy orientation implies a satisfying level of social expenditures which
would be financed by the tax payers according to ability-to-pay principle. The idea and
implementation of welfare state postulate and necessitate a certain compromise between
antagonist classes and/or social groups by means of the political system which implements the
social pact thereby social inclusion and cohesion But the sustainability of the welfare state
depends on adequate demographic, economic and financial structures. The defect in financing
the system could conduct to the collapse of the welfare state. In other words the problematic
is to secure the coherence between social sustainability and fiscal sustainability.
Behind the concepts of social pact, inclusion and cohesion stand the domestic as well
as the external factors or mechanisms. İt means that the welfare state have been designed and
implemented in the indusrialized world (Center) under specific economic, social and political
conditions. The development and extension of welfarism during the keynesian demand
management as from the end of the World War II to mid-1970s is not a coincidence (Arrighi,
1994). During this period. the fordist capital accumulation regime characterized by intensive
accumulation and state intevention/regulation permitted the dominance of the welfare state in
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the Center. Therefore rapid capital accumulation, high growth and the development of the
social welfare was the case in “golden age” of capital accumulation.
In the same period important differences occur between and among the developing
countries, especially between Latin America –including Mexico- and Southeast Asia. This is
due primordially to the nature of the industrialisation. In the first stage within the limits of the
international divison of labour during the post-war period, the periphery was engaged to
produce predominantly agriculture products and mineral extraction - primary commodities-.
Neverthless during 1950s the developing countries, e.g. Latin America, have undertaken a
process of import substitution industrialisation (ISI).. But later some peripheral countries
adopted a new mode of industrialisation
based on “export substitution strategy”; these
economies were producing and exporting manufactured commodities. This transformation
and new stategy are identified with a new regime known as
“primitive” or “bloody
Taylorism”. But later notably in the Southeast Asia the “bloody Taylorism” was replaced by
the “peripheral Fordism”. Traditional ISI,
“bloody Taylorism” and “peripheral Fordism”
have an impact on the modeling of the social welfare system and policy. This model, despite
the divergences between the countries, could be baptized as
“semi-peripheral
welfarism”(SPW). Towards the end of the period (end of 1970s or early 1980s) the peripheral
fordism (capitalism) engendered
an extreme inequity in income distribution, poverty,
deficiency in the provision of public services, large budget/public deficits, heavy foreign debt
burden which lead up at first to crisis, and then to stabilisation and structural adjustment
policies under the auspices of the IMF and the support of World Bank. A large group of semiperipheral countries (Latin America and Turkey, etc) had been engaged to neoliberal policies
by means of structural adjustment programs which are targeting the transformation of the
economic-financial structures. In the neoliberal context strengthened by the Washington
Concensus, the changing role of the state is concretized also by the transformation of the
social policy and its convergence to neoliberal environment. The so-called“structural reforms”
involve radical changes in social policies, i.e. social protection and mode of provision of
public goods. Turkey among semi-peripheral economies represents a specific case. The
economy is under the supervision of the IMF as from 1998,
European Union and
candidate for accession to
negotiating the membership Turkish society is exposed both to
“structural reforms” of the Bretton Woods institutions and the “reforms” of the EU. In
Turkey the state is officially secular but the secularism is under risk because of the attitude of
the islamic party holding the power. This party which has some reserves against the IMF
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program and neoliberalism before accessing to power, showed no hesitation in adopting
neoliberal policies after taking office.
II. Fordism and Welfare State
First remarque; the expression “relatively well-defined concept of welfare state” that
we have used above do not exclude the different types of welfare regimes. Already EspingAndersen introduced the three types of welfare regimes for developed Western countries as
corporatist/conservative, liberal and social-democratic. (Esping-Andersen, 1990; 1999). The
corporatist one is work oriented and based on individual contribution. In this regime the
public policy is reproducing the original social disparities (Germany, France, Austria) due to
differences in class lines. Liberal regime is residualist; the public policy do not aimes to
eliminate the economic disparities (USA, Canada, Australia). Social-democratic regime
favours universalist values; adequate polices are formulated in order to eliminate economic
and social disparaties (Scandinavian countries). By taking into consideration the crticisms to
this approach, particularly the arguments supporting the different nature of the Southern
European welfare regime, it would be reasonable to introduce a new category of welfare
regime (Ferrara, 1996; Guillen and Marsaganis, 2000).
Second remarque; the roles assigned to family, market, and state are different
according to regimes. Therefore as pointed out by Esping-Andersen (1999, Table:5.4) in the
welfare state the dominant locus as well as mode of solidarity shows important differences,
and decommodification varies between a minimum and a maximum degree according
regimes. Therefore the concept of welfare state may have different meaning, the content and
the role designed to state vary; state production/provision/delivery of social goods and
services or public-private mix in the provision of social protection, and dominance of the
private solutions. In the criticisms to Esping-Andersen, the characteristics of the Southern
European welfare regime are focused on the issues such as the extent of the social security
coverage, the role of the state within the formal seurity syastem, the lack of social policies for
combating the poverty, the structure of employment. By noting that the latter welfare regime
is closed to “semi-peripheral welfarism”, we can confirm that the comparison between
welfare systems could be done by making reference to; (i) Policy action of the governments.
(ii) Resources used in the provision of welfare services but also the constraints. (iii) Rules
and structures adopted by the states. (iv) The operation of benefits and services, (v) The final
outcome.
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These remarques point out that the use of a general and unique concept
difficult and even bears some risques. Meanwhile
is rather
the common characteristic of the
industrialised capitalist societies during the “golden age” of accumulation was the
development –through different regimes- of the welfare state/social welfare. In a broader
sense a social welfare program includes the provision of a wide range of social services by
the public body such as: (a) Social insurance schemes, often based on income, to pay for the
social welfare service being provided. These are often incorporated into the taxation systeme,
i.e. income tax. (b) Pensions or other financial aid, including social security and tax relief, to
those with low incomes or inability to meet basic living costs, especially those who are raising
children, elderly, unemployed, injured, sick or disabled. (c) Health insurance, health and
medical programs; hospital and medical care including child nutrition, welfare, protection;
free or low nursing, and free natal and postnatal care. (d) Public employee retirement. (e) Free
or low cost education – pre-school, elementary, secondary and higher education but also
vocatonal and adult education-, scholarships or pensions, sometimes in the form of a
suspensory loans to students attending academic institutions or undertaking vocational
training. (f) Public housing to provide decent and safe rental housing for eligible low-income
families, the elderly and persons disabled.
Why the social welfare programs have been flourished, and/or developped, and
implemented in the industrialized countries during the “golden age”?
The nature and
characteristics of the dominant Fordist capital accumulation regime and within this
framework the appropriate domestic and external factors facilitated the engagement of the
national economies to a growth path and converted the capitalist national states to welfare
states. The dynamic synthesis of the domestic and external forces leads to the economic
expansion and the governments adopt the appropriate social policy. But in this synthesis we
can find the whole mechanism of imperialism i.e. transfer of surplus from periphery to
central economies by means of trade, investment and financial policies
Fordist regime signifies the combination of the intensive capital accumulation and
mode of monopolistic regulation (whole range of procedures and institutions which insure the
stability of the accumulation) under state guidance and control. In fact the state intervened
both directly and indirectly in supporting capital accumulation As asserted by O’Connor
(1973:6) –capitalist- state have to fulfill two basic but contradictory functions; to promote
profit yielding capital accumulation and to legitimize the previous function by achieving
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social cohesion.. Putting it differently the economic and technical requirements of the capital,
i.e. necessity of
an intensive capital accumulation and
the political and social claims
stipulating a certain social balance bring state interference.Therefore there is the possibility
of reproducing the fundamental social relations of a given historical-institutional context. It
means that the mode of monopolitic regulation reproduces the regime of intensive capital
accumulation (Boyer and Saillard,1995: 546-547). Above all the rapid development of the
productive forces, the nature of relations of production, the active state interventionism and
the international economic relations are the main factors contributing to a rapid and
sustainable capital accumulation. The periphery as a large market for the industrial goods
produced in the center and acting as supplier of the primary commodities
important contribution to accumulation of capital
make an
in the center. Another factor is the
cooperation between USA, Western Europe and Japon concerning the diffusion and the
control of the innovation.
The Fordist accumulation regime was grounded upon a historically set of regulatory
arrangements and political compromises that provisionally stabilised the conflicts and
contradictions which are epidemic to capitalism (Aglietta, 1979; Boyer and Saillard, 1995). A
historical compromise emerged between capital and labour in which wages were linked to
gains in productivity and inflation. Simultaneously the
eliminate the difficulties in
valorization of capital.
productivity gains permitted to
The strong correlation
between
productivity and real wages prepared the permissive conditions for the growth . The working
class benefitted from cooperation between capital and labour because of full employment and
higher wages. In this context the institutionalized labour-management relations and the level
of real wages allowed the labour force to become mass consumers of their mass production.
The rise in purchasing power of working classs made easier to eliminate the constraints that
the accumulation was subject under competitive markets Therefore mass production and mass
consumption were effective by the transformation in the conditons of production and
consumption. An important remark is to be done; all kind of welfare provisions combined
with Keynesian demand management policies –including infrastructural investments and
public employement- contributed considerably to this relatively autocentric mode of growth
. In fact the social welfare state could not only considered as the outcome of the capitalism in
a specific period of time but also necessary for the reproduction of the whole system
(Sönmez, 2006) O’Connor points two categories of
public expenditures; social capital
spending and social expenses. Social capital-human capital is a form of social capital6
spending has two components, social investment and social consumption.. Therefore public
expenditures can be classified in three groups (Gough,1979): (a) Social investment spending;
the projects and services increasing or preventing a decrease in labour productivity. (b)
Social consumption spending; projects and services reducing the cost of reproduction of the
labour force. (c) Social expenses; projects and services contributing to social cohesion. Social
capital spending makes a direct contribution to private capital by rising the rate of profit and
accumulation. Social expenses have no effect on the production of surplus value but on the
realization of value, therefore this categorie of expenses is corresponding to state’s
legitimation function.(O’Connor, 1973:7; 2000:107) According to O’Connor as each public
unit undertakes accumulation and legitimation, public expenditures involve both social
capital spending and social expenses. Meanwhile the economic and political factors determine
the scope of the state’s interference and therefrom the cıntent of the expenditures.
Finally
Fordist accumulation regime was characterised by
the corporatist
accomodations between capital, labour and leads to collective bargaining process. The
monopolitic mode of regulation in which the state has a preponderant role enabled corporate
concentration and centralization within major national industries, The governments were
engaged in Keynesian demand management policies and social welfare programs. This
accumulation process was impleemented in the context of a world economy guided by
Bretton Woods institutions and dominated by the U.S.
III. Path to Semi-peripheral Welfarism
As emphasized above different welfare state regimes can be found within the
developed countries, and “Europe is not homogenous and its lessons are plural. Indeed,
Europe offers a natural and well-studied labouratory of differing social policy responses to
broadly similar social problems” (Gough, 2005:18). But despite the differences in regimes,
and social policies, the common denominator was the Fordist accumulation regime marked
by state interventionism, strong protectionism with subsidies for domestic industries but also
by the transfer of a surplus from periphery.
III.1. Different Regimes of accumulation
Concerning the semi-periphery –and periphery- there are considerable differences
between countries concerning industrialisation, regime of accumulation, mode of regulation
and social policies,. There is a risk in generalization as the semi-peripheral countries “looks
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like a constellaton of special case.., the study of the economic and social history of each
specific country, for the study of the modes of regulation, their forms of class alliance and
their successive hegemonic sytems” (Lipietz, 1987:99). Before taking in hand the case of
Turkey, it is necessary to capture the main properties of the regimes of accumulation in the
semi-peripheral countries which would enable us to focus on the SPW. In fact the ISI,
the“primitive” or “bloody Taylorism” and the “peripheral Fordism”. Have different aspects
concerning accumalation.
After the the big crisis of 1930s a large number of the developing countries (Latin
America, Turkey) have already undertaken ISI. Especially during 1950s but also 1960s the
ISI was considered as the efficient industrialisation strategy managing the economic
development.. The ISI entails substitution of commodities-in easier phase non durables and
than consumer durables, finally intermediate and investment goods- previously imported with
domestic production. Neverthless the ISI strategy didn’t keep the developing countries from
being producer and exporter of the primary commodities. Compared to ISI of 1930s, the new
mode of industrialisation based on substitution of imports was dependent on foreign capital
and finance. In other words in the leading countries of the South the ISI strategy was
sustained by direct foreign capital inflows. The protection and stimulation of the infant
industries (emerging manufacuring sector) by tariff barriers and/or quotas, but also by means
of exchange rate controls and multiple exchange rate regimes as well as other fiscal incentives
given by the government are the main elements of attraction for foreign direct investment or
joint venture with the local capital. Therefore the foreign capital can pass the tariff barriers by
investing directly or jointly in the peripheral economy. But compared to “primitive
Taylorism” representing “export substitution” process,
the enterprises are producing for the
domestic market. Another important difference is relatif to the
production;
technology.used in
labour saving technology is predominant in ISI process but under “primitve
Taylorism” rather obsolete labour-intensive technology is used in the industrial process.
In the years marked by the ISI policies one of the striking features of the peripheral
countries is the migration from rural zones to the urban centers. The migration is accelerated
in the following decades. Given the number of the migrants, the capacity of employment and
the type of technology used in the production, the industrial sector could not absorbe the
labour surplus. The capital accumulation process was based on low wages. The labour force
was not considered as a component of the domestic demand, the consumer durables were
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accessible not only for high income groups but also for middle-classe – group of white collars
workers and high skilled labour force- therefore large fractions of the population were
excluded from mass consumption..
Before explaining briefly the involved regimes of accumulation let’s go back once
more to the most simplest definition of Fordism: Fordism is Taylorism plus mechanization.
Adopted to underdeveloped countries the terms are converted to “primitive” or “bloody
Taylorism” and “peripheral Fordism”.
“Primitive/bloody Taylorism” more concretely signifies the delocalization of certain
Taylorist type industrial activities towards peripheral and semi-peripheral economies with
very high rates of exploitation of the labour force. (with regard to wages, the length and
intensity of work hours, etc.).Notably the industrial activities constraint by low rates of profit
and rather obsolete labour-intensive technology in the central economies were transfered to
developing countries. Therefore the search for high rates of profit led multinationale firms to
transfer the concerned industrial activities to these countries and multinational banks to
finance the production process (Lipietz, 1987). The products being exported to the
industrialised economies. The nature of the industrialisation and the necessary regulations for
the sake of the accumulation reveals
concretely the social context and high degree of
exploitation. The technology used in the production process is labour-intensive and the
technical composition of the capital is low. A cheap female labour is largely employed and
the strategy incorporates all domestic patriarchal and other direct and indirect methods of
labour repression; deregulation of the labour markets, formation of official trade unions,
absence of civil rights, imprisonnement and torture of opponents. ”This strategy is “bloody”
in the sense that Marx spoke of “bloody legislation” at the outset of English capitalism”
(Lipietz, 1997:10)
“Bloody Taylorism” was replaced by the “peripheral Fordism” by 1970s in some
semi-peripheral countries. Before explaining this concept
lets go back rapidly to the
properties of industrialisation under Fordism. The mechanized mass production production
process which is transformed through the assembly line techniques implied the division of the
activities in three main categories: The first, conception, organization and engineering; the
second, skilled manufacturing; the third; unskilled or low- and/or semi-skilled assembly.
“Peripheral Fordism” is characterised by intensive accumulation and the expansion of the
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markets for the consumer durables. In fact the industrial structure was characterised by the
priority given to mass-produced consumer goods for exports. Therefore Fordism in these
developing economies
“remains peripheral in the sense that, in the global circuits of
production, skilled labour remains largely outside the country in question. In addition, outlets
correspond to a specific combination of local middle-class
consumption,the growing
consumption of durable goods by the workers and the export of low-price goods to the
central capitalist countries”.(Lipietz, 1997: 10-11). The domestic market is principally
marked by the rising purchasing power of the urban middle class the impact of the working
class is not important. The labour force in these export-oriented economies were subject to a
very intensive exploitation. Export promotion policies within the context of “peripheral
Fordism” engendered an increasing social cost.
III. Permissive Conditions for Semi-peripheral Welfarism
The characteristics of the SPW can be emphasized by making reference to the factors
contributing to its formation. Above all we have already seen that in the developed countries
the capitalist state played the main role in promoting capital accumulation and legitimizing
the previous function by achieving a certain social cohesion.. Therefore by trying to establish
and than to secure the social cohesion the authorities were trying to reproduce the
fundamental social relations of a given historical-institutional context. In the background of
the concerned Fordist accumulation regime are standing the regulatory arrangements and
political compromises. The internal economic, social and political structures constituted the
permissive conditions for a profitable capital accumulation.
The historical compromise
between capital and labour not only contributed to this relatively autocentric mode of growth
but also facilitated the legitimation of the accumulation process by means of convenient
social policies and provision of social welfare services. Keynesian demand management
policies combined with the welfare provisions contributed to economic growth . But also as
an external factor developing economies contribute to economic performance of the central
economies In fact developing countries had taken an active part in the international capital
accumulation process by means of ISI policies based on foreign capital inflows, “bloody
Taylorism” and “peripheral Fordism”. The role played by
may vary according to
regimes of accumulation
semi- and peripheral countries
which are characterised by their
dependency - both economic, financial and political - to capitalist centers. These economies
are articulated to world capitalist system by means of the regimes of accumulation as well.
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The dominant
regime of accumulation in the developing countries, economic-
financial structures, the nature of the economic policies and the market-based social policy as
well as the politcal regime and the dependency on external actors within the limits of the
new international division of labour were decisifs in the development of SPW. In this context
the defect in fiscal sustainability, neverthless sine qua non condition for the social welfare,
played an important role in poor performance of the social welfare state. This defect is due not
only to the state of underdevelopment – relative absence of tax-handles - and low income
level per capita compared to industrialised economies but also to the imbalance of power
between social classes or strates, therefrom the partiality of the state vis-a-vis the social
classes, absence of progressive systems of redistributive taxation and the economic policies
in favour of dominant classes/groups or alliance of classes. Some specific problems relative
to underdeveloped economies as ineffective tax administration, inefficiency in state audit of
public expenditures
and highly extended informal economy also intervenes .
More
concretely “bloody Taylorism” and “peripheral Fordism” prepared the basis for the SPW
Compared to standart Taylorism and Fordism, the regimes adopted in developing countries
could not contribute to the development of relatively “standardized” social welfare; a rather
distorted social state occurs through the economic-social-political-cultural structures of the
developing countries.
The concept of SPW and its implementation vary according to social formations and
the regimes of accumulation. Within this context the nature of the political regime- whether
democratic or authoritarian or military - is of primordial importance. These remarques keep us
perhaps to give a well-defined concept of the SPW, neverthless it is more easier to emphasize
the main characteristics of the term.
In a broader sense the SPW do not present a well
structured, large-scale social security system.. The pensions or other financial aids, including
social security and tax relief are not developed and put in action in order to support those
with low incomes or inability to meet basic living costs, especially those who are raising
children, elderly, unemployed, injured, sick or disabled. Health insurance, health and medical
programs; hospital and medical care including child nutrition, welfare, protection; free or low
nursing, and free natal and postnatal care do not cover the whole population.. Neverthless the
education is free and provided mainly by the state sector but the accesss to free and/or low
cost education is controlled and/or restricted. . Public housing do not cover the low-income
families, the elderly and persons disabled. but rather it is restricted to some public employees.
Finally the accumulation regime(s) in developing countries do not allow for a social welfare
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state but only to divers forms of SPW. In other words although the capitalist state takes an
active part in the process of accumulation, there is no consistent social policy mix targeting
the social cohesion but also rather coercive methods could be used for an “undemocratic
legitimation”. The defective legitimation procedures as well as the coercive methods are the
integral part of the SPW. By making reference to O’Connor and Gough it will be possible to
argue that
the social investment spending and the social expenses are not closedly
coordinated and planified as well as the volume of the expenditures is far from the optimality
in the developing world. Concerning the social expenses, even in a democratic context the
defect in fiscality do not permits to mobilize the necessary resources necessary for sustaining
a public policy consistent with the social cohesion. But in most of the cases, as already
emphasized the social cohesion is not conceived as a target or an “undemocratic” persuasion
of the working class is the case. As a matter of fact “bloody Taylorism” and “peripheral
Fordism”, identified with the SPW, were implemented under undemocratic regimes, i.e.
military junta or civil autoritarian govenments. In Latin America with a few notable
exceptions, the number of military dictatorships climbed to ten in 1969, twelve in 1970,
fourteen in 1972 and fifteen in 1973. Concerning Turkey we are observing the military
intervention in March 1971, the formation of an authoritarian civil government under military
control during 1971-1973 and the direct military take over in September 1980.. In Southeast
Asia civil authoritarian regimes were frequent. Therefore during these years there is a precise
shift from democracy and participation to authoritarianism and order. The case of post-1964
Brazil indicates that “the benefits of the new order accrued to a small alliance of domestic
enterpreneurs and speculators supported by a techocratic-military middle class and their
busines, political and military associates in the Northern core” (Nef, 2006). In this new order
characterised successively by “bloody Taylorism” and “peripheral fordism” the bulk of the
population- notably the working class- was demobilized and excluded. “Dictatorship became
an intrinsec component of economic freedom” (Letelier, 1976:138). Dictatorship or
authoritarian civil regimes or undenocratic governments in their discourse for “economic
freedom” have eroded the civil, social and political rights. And adopted the market-based
social policy.
Finally some remarkable differences occur through the regimes of accumulation; the
ISI could be outward-looking based on export promotion (Southeast Asia) or inward-looking
without important links with international markets (Latin America, Turkey). But also the
“semi-peripheral Fordism” also vary following the social formations. To a certain extent the
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SPW is a more concret concept as it is characterised mainly by the defects in large-scale
public provision of social insurance and the progressive sytems of redistributive taxation as
well as by the defects in delivery of public utilities and deficiency in fiscal sustainability
necessary for the development of social welfare services. Neverthless as from early 1950s and
during 1960s the developing countries have been influenced by the Keynesian thought as
well as the economic policies implemented in the central economies. Interventionist
development policies entailed substantial public expenditures, expansion of the public sector
as well as public services and social security system. But the end of well functioning Fordism
or Keynesian capitalism precipitated by the negative supply shocks during 1970s du mainly to
quadrupling of oil prices in the first half and than doubling in late 1970s implied the rise both
in price level and unemployment. The stagfiation in the central economies as well as the oil
shock had an important and negative impact on oil-importing developing countries. Their
terms of trade being worsened and current account balance seriously deteriorated these
economies
had recourse to foreign loan lended mainly by the private multinational
institutios/banks. The contraction of the world trade produced a new protectionism against
developing countries’ exports and higher interest rates due partly to world inflation bring the
developing countries to find credits with high costs. As a result the oil importing semiperipheral countries have been heavily undebted and they face the debt servicing difficulties
and the loss of credibility. The end of fordism and transition to post-fordism in central
economies, therefore engagement to neoliberal policies have an important impact on
developing world.
These economies by adopting economic stabilisation measures and
neoliberal structural adjustment programs were engaged to market-based social policies and
transforme gradually but rapidly the content of the social welfare programs.
IV. Impact of Globalisation on Social Welfare Programs
Globalisation studies can be categoried according to different study groups as worldsytems approach, global society approach, global society aproach and global capitalism
approach (Sklair, 1999:143). There is no universal definition of globalisation. Globalisation
colud be defined in terms of
transition from nation-state to transnational hegemony
(Robinson, 2005:1) Hegemony is identified to internartional domination” and/or “the latest
stage of the Western form of dominance over the world’s economies: folowing the previous
ones of slavery, mercantilism,colonialism and imperialism” (Amoroso and Galina, 2002:15).
We can give a long list of definitions and/or the name of writers but our aim is not to explain
in detail this concept. The turning point in our approach is the identification of globalisation
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with post-fordism and neoliberal programs/policies. The impact of post-fordist accumulation
regime and neoliberal policies on semi-peripheral economies could be underlined by making
reference to Washington Concensus.
The original list of Washington Concensus (Williamson, 1990) which seems to cover
policy changes but not requiring profound institutional changes in fact produces an important
impact on social welfare programs. Because on the original list
figure, among the other
measures, the fiscal discipline, reorientation of public expenditures, tax reform, privatisation,
deregulation and secure property rights. The original list has been augmented by a second list
of “institutional reforms”. On this list figure the flexible labour markets, social safety nets
and targeted poverty reduction and also some other arrangements wich do not have direct link
with social welfare programs (Williamson, 2000) These measures or policies figuring on the
original and augmented list of Washington Concensus have a direct impact on social welfare
programs. But also some of the other listed measures as financial liberalization, trade
liberalization, openness to direct foreign investment, corporate governance, measures for anticorruption, WTO agreements produce an indirect impact on social welfare. For example
financial liberalization affect income distribution to the disadvantage of low income group.
As direct foreign investments of the multinational firms imply flexible labour markets, the
working class would be negatively affected. It is not surprising to find out that the measures
and/or policies introduced by the original and augmented Washington Concensus are those
of short-run stabilisation packages and long-run structural adjustment programs or structural
reforms introduced by IMF and supported by World Bank. It is not surprising no more to find
that these policies are conform to neoliberal ideology and policy principles.
Post-Fordism is characterised by the flexible production process based on flexible
system and flexible labour force. Post-Fordism introduces a new accumulation regime and a
socioeconomic sytem. The well-known features of post-Fordism are just-intime
manufacturing- use of computer aided design and manufacturing-, fragmentation of the
national bargaining process, both numerical and functional flexibility, deregulation or less
regulatory state (labour laws, environmental standarts, advanced tax systems, minimum wage,
etc). . These features indicate the structural transformation of the capitalist state. The
elimination of the national mode of regulation or namely deregulation calls for the support of
the globalisation activities; development and expansion of the transnational corporations and
global commodity chains as well as the international capital flows and international trade in
goods and services. Therefore post-fordist accumulation regime brings out the globalisation of
14
the economic and financial activities, erosion of the social welfare state, denationalization of
the state, growth of supranational regimes and internationalization of political regimes
(Jessop, 2003b). But also good governance and/or regional/local governance as well as global
governance
are
giving the
neoliberal
guidelines
for
public
policy parallel
to
internationalisation of economic activities and globalisation of the world economy .
Semi-peripheral countries are subject to a profound transformation
by means of
globalisation. Put it differently the transition to post-fordism and the policies in favour of
globalisation produced an important impact on the economic, social and even political
structures and systems. The semi-peripheral economies faced with the foreign debt crisis in
early 1980s adopted the macro-economic stability as the main target. The neo-orthodox
stabilisation policies had been implemented under the auspices of the IMF and with the
support of the World Bank. The stand-by arrangements signed with IMF permit the conduct
of tight monetary policy, fiscal disciplin and budgetary austerity, strict control of both social
expenses and
wage increase. These measures having the objectives of
inflationary spiral,
promoting the exportation and
breaking the
making the external debt-service
payments. are based on the contraction of the domestic demand. Therefore the erosion of the
economic and social rights and acquisitions are inevitablr The conditionality –rule- introduced
by stand-by arrangements are conform to original Washington Concensus inspired by the
neoliberalism. The macroeconomic stability is the basic requirement in the process of
articulation of the semi-peripheral economies to global economic order. The next step is the
implementation of the so-called “structural reforms” integrated in structural adjustment
policies in accordance with the augmented Washington Concensus. Various lending facilities
were used by the IMF and the World Bank in support of macro-economic stabilisation and
structural adjustment programs (Sönmez, 2005)
These policies consist in considerable cuts to social programs especially in the fields
of education, health, housing and imply privatization of the public service sector. The deep
cutbacks in social programs/social services, privatization of
public services and also
imposition of high user fees in a wide range of public services as education, health,
tranasportation, i.e. public utilities and even public school and hospital closures are the
widespread practices in the context of a systematic neoliberal policy. The so-called neoliberal
reforms are market-based solutions as it is the case for health-care, education, health
insurance, the system of social security as well. The policies for stabilisation and structural
adjustment modify gradually the SPW and impose a market-led welfare system.
15
The peripheral countries have undergone economic and financial crisis and/or
bottlenecks during the period marked by the transition from fordism to post-fordism in the
central economies. The “necessary” neoliberal solutions and structural transformation of the
economy and socioeconomic system imposed by means of IMF and World Bank programs
signify the transformation of peripheral-Fordism and SPW. We’ll baptize the new
accumulation regime simply as “post-peripheral Fordism” (PPF) and the welfarism related to
this regime as “market-led globalist welfarism” (MLGW). As it was the case for semiperiphal Fordism, the PPF is a broder concept covering large range of “emerging-market
economies”. Instead of giving a precise definition-which seems to be impossible- of the term
it is preferable to refer briefly to its main features. The PPF occurs in the context of the
internationalisation/globalisation of the capital at three main levels: foreign trade, allocation
of money capital or financial capital and investment/production by means of transnational
firms and banks/financial institutions. The production, realisation and reinvestment circuits
of the capital have to be articulated in the context of internationalisation/globalisation. The
circuits of capital are internationalized i.e. the international/global economic and social space
intervenes, not only in the earlier stages of integration of the semi-peripheral economies to
global world order by means of stabilisation programs but even more intensively during the
recent adjustment process. This tendency represents the development-overshootingtransformation of the peripheral-Fordism. More concretely internationalization of capital,
politics and ideology is interiorized, internationalization do not exert an effect from exteriour,
could not be considered as an exogenous factor. Neverthless the regime of accumulation in
semi-peripheral countries is extraverted, the dominant accumulation regime PPF is a link or a
part of the post-fordist accumulation. This is not somewhat in contradiction with the previous
remarque; the interiorization of the intenationalization of capital and extraversion of the
regime of accumulation is the outcome of the dialectic approach. Concerning the mode of
regulation
the
competitiveness
at
international
level
must
be
taken
into
consideration.Therefore “in a tripartite economic-political-ideological space, the mode of
global connection typically involves contingent internal-external linkages between a complex,
nested internal formation (that, depending on the precise analytical focus, could be a
local/regional/national space) and a more encompassing economic-political-ideological
space organized under the dominance of a hegemonic power. Thus the mode of global
connection can be defined as a spatially-specified form of internal-external structuration whic
expresses the distinctive, contingent articulation of an domestic social formation to the
16
processes of the internationalizaion of capital, politics (the global power of capital), and
ideology” (Sum, 2001) . As in the new regime of accumulation the growth process is
articulated to international context, production and investment at local level is closely linked
to exteriour, strategies are based on competition but neverthless mass production and the
objective of
mass consumption for middle-classes is maintained.. This is due to hybrid
nature of the semi-peripheral economies in the era of globalisation; compared to SPW which
is impregnated by the Keynesian welfarism, PPW is closed to Ricardian and Schumpeterian
workfare regimes. The differences between Ricardian and Schumpeterian regimes do not keep
us to use the term of PPW. Neverthless the PPW is not the synthesis of two different
regimes. In fact under Schumpeterian workfare regime “(1) domestic full employment is
deprioritized in favour of international competitiveness, (2) redistributive welfare rights take
second place to a productrivist reordering of social policy; (3) the primary role of the social
state is deprivileged in favour of governance mechanisms operating on various levels. At the
same time, a growing trend to the internationalization of policy regimes reflects a perceived
need for coordination of policy and policy contexts across scales of eonomic and political
action” (Jessop, 2003a:10). Especially the international competitiveness requires permanent
innovation and re-skilling. On the contrary one of the basic features of the Ricardian workfare
regime is
the effort of obtening competitive advantages by exploiting intensively the
abundant labour force. These remarques shows that the Schumpeterian workfare regime is
dominating in some semi-peripheral countries (East and Southeast Asia) whilst Ricardian
workfare regime is the dominant one in other parts of the world (Latin America, Turkey). In
fact there are variations within each regime as well as a semi-peripheral country can combine
the particularities of Ricardian and Schumpeterian regimes, i.e. following the sectors and subsectors. The crucial point is the common characteristics of these two regimes concerning the
valorization of the capital and the social reproduction of the labour-force. These regimes are
characterised by the outward oriented economy, supply-side orientation which determines
also the market-based social policy.
The characteristics and fragility of the SPW,
particuliarly the deficiency of both the social security system in
covering the whole
population and the public body to respond to growing collective needs could be considered as
the flexibilities for the transformation or conversion of the system.
Finally post-Fordism dominating in the era of globalisation is characterised by the
post-peripheral Fordism in the semi-peripheral sphere. The PPF is a broader and rather
heterogenous concept related to Ricardian and Schumpeterian workfare regimes. But PPF
17
marks its difference from semi-peripheral Fordism which is impregnated with Keynesian
welfarism. As the circuits of capital are internationalised and the mode of regulation is based
on promoting the competitivity on international markets,
the social policy and social
welfarism have been transformed and modified; the new structures do not permit even the
implementation of the semi-peripheral welfarism. It is substituting rapidly by the market-led
globalist welfarism. The interests of the transnational capital is the main facteur which
determines this new welfarism in the semi-peripheral sphere.
V. Case of Turkey: Neoliberalism, Islam and Social Welfare
In the current constitution-as it is the case in the previous one- which became effective
in 1981, Article 2 stipulates that “ The Republic of Turkey is a democratic, secular and
social state,…” Article 5 is pointing out that “The fundamental aims and and duties of the
state are...,… to ensure the welfare, peace, and happiness of the individual and the society; to
strive for the removal of political, social and economic obstacles which restrict the
fundanmental rights and freedoms of the individual in a manner incompatible with the
principes of justice and of social state…”.. The terms as “secularism”, “justice and social
state” “welfare”, “fundamental rights and freedoms” are the key concepts and/or basic
principles of the state. In fact the Article 4 stipulates that the provisions of the first three
articles (including Article 2)
“may not be amended, nor may trheir amendement be
proposed” . Article 5 is the complementary of the previous one. Therefore it is expected that
whatever the ideology of the political parties, the objective is performing the welfare of the
individuals and the society by means of the social state in a democratic, secular regime .
Without returning back to very old times, just the examen of the economic-social-political
structures in Turkey as from 1980 reveals that the nature of the welfare regime is not
conform to the “wishful” thinking emphasized in the constitution but also the political regime
bear some risks concerning the secularism.
Many of the properties of the Southern European welfare regimes could be found in
Turkey.That is why some eminent writers as Gough (1996) and Saraceno (2002) have
considered the Turkish case as a part of the Southern European welfare system. In fact small
employers, self-employment and unpaid family workers have an considerable weight in
employment, the dimensions of the informal economy and informal employment are very
extended, social rights are inequally distributed and universal health insurance is absent. The
18
whole social security system is linked to holding a formal job, therefore those without any
connection to formal labour market are excluded from social protection. The social protection
system is excluding the
sesasonal and casual workers which represent an important
percentage among workers. The formal heterogenous social security system covering the
working class
combines both retirement and health insurance implies inequalities in the
access to medical care and also allocation of pensions. As by the end of 1990s 55 % of the
population is not registered to one of the social security institutions (Retirement Chest
covering the civil servants; Social Seecurıty Institıtion covering workers employed in public
and private sectors; Bağ-Kur covering the self-employed and small artiasans and various other
small insurance funds) is not covered also by the official health insurance system (DİE,
2001:200). Turkey’s social assistance is characterised by ad hoc assistance through Social
Solidarity Fund as well as by limited programs to elderly and disabled people, but also by an
institutional care for children and elderly administrated by specifed institutions. But there is
no other sytematic cash transfers that would help the vulnerable, unlike many neighboring
countries of Western and Eastern Europe, which have universal child allowances (World
Bank, 2001).
In the absence of a social policy combating the poverty and exclusion, the
state intervenes not directly and systematically but through particuliar mechanisms. As well
“...the importance of the family, local government and religious local institutions in
promoting the welfare of the individual and helping individuals to deal with risk situations”
(Buğra and Keyder, 2003:14) is an important particularity. But in spite of the commun
characteristics with Southeastern European countries, the welfare regime in Turkey has her
own particularities. The characteristics of the welfare regime which is labelled in this paper as
the semi-peripheral welfarism reveal the changing nature of the regime according to social
formations but also to the regime of accumulation. From this point of view Turkey is a
meaningful and an interesting case concerning the societal impact of the populist and the
neoliberal policies.
The neo-orthodox stabilisation program adopted in January 1980 by the civil
government had been strengthened after the military putsch in September of the same year.
Under an undemocratic regime the wages had been depressed
during the decade of 1980s.
The negative distibutional shock have been partly corrected by new populist policies
implemented by means of the liberalization of the capital account in balance of payments
(external financial liberalization) in August 1989. Capital inflows being accelerated after
the financial liberalization, introduced very high arbitrage gains for banks and high mark-up
19
rates for large-scale manufacturing firms (Sönmez, 2004) but at the same time sustained the
growth of private and public consumption. The government concede an important rise in the
wages of the public sector workers and in the salaries of civil servants, increased social
spending and the subsidies given to agriculrural sector. A considerable wage rise took place
also in the private sector. Leaving a side the crisis management policy implemented during
1994-1995 as an orthodox treatment in response to the crisis of 1994, the populist policies
marked the whole period. However populist policies could not be qualified “corrective” in
the proper sens of the word because the erosion of the wages and salaries during 1980s and
the extreme inequity in distribution were not corrected. As the logic of the populist
adjustment operated by the government was “giving to labour/the poor without taking from
capital/from the rich” (Boratav,Yeldan, Köse, 2000:28). The outcome could be reduced to
large public deficits, increasing public borrowing and growth in public debt. Faced with
economic bottlenecks and difficulties in adopting the economy to golbal economic order the
ruling coalition of the time opened the economy to IMF control in 1998 by means of the Staff
Monitored Program. The intervention of the IMF and World Bank became direct and more
official by means of a stand-by arrangement which became effective in year 2000. Despite
two major crisis (November 1998 and February 2000) the government maintained their
engagement to IMF program. Even the stabilisation program is strengthened and the structural
adjustment process is accelerated by means of two new stand-by arrangements contracted in
2002 and 2005. Therefore particularly as from the year 2000 IMF-in accordance with the
World Bank- started to intervene directly and
play the decisive role in modeling the
economic and social policies. This is not specific to Turkey; since 1980s
developing
countries are constraint to adopt their economic structures to the global restructuring of
capitalism. Within this context
economic, social and political adjustment/transformation
have been imposed to peripheral countries Neoliberal policies do not aim only to stabilise the
economy but also to transforme or alter the social structure. But compared to Latin American
countries such as Brasil and Argentine which had undergone economic crisis almost at the
same period of time, Turkey stayed the sole country entirely engaged to IMF prescriptions.
On the contrary of the Latin American world there is no evident sign of neo-developmentalist
welfarism in Turkey.
Despite the structural adjustment process the dismantling of the SPW have not been
completed; concerning privatisation, the divestiture of the state-owned enterprises (SOEs)
has the priority compared to public services sector. The gouvernmental authorities have
emphasized several times that the state will no longer deal with economic, financial and
20
commercial activites but focuse on the provision of public utilites; especially health care and
education will have the priority in public sector. Neverthless transformation of the social
security system, privatisation and commercialization of the health and education system was
on the agenda. The strategy adopted by different governments in Turkey is conform to the
prescriptions of the original and augmented Washington Concensus. The first-generation
policies is focused on economic stabilisation in a context marked by the liberalization of
trade as well as the development and liberalization of the domestic financial markets and full
liberalization of the capital account in balance of payments. The last measure consists in
opening of the national economy to international captal flows. The necessary deregulation
and privatisation policies will be adopted for completing and strengthening the structural
adjustment process. Therefore the axis of privatisation is turned gradually but rapidly from
SOEs and partially state banks to public services sector with the second-generation reforms.
The new wave of “reforms” though completing the preceding ones, in fact are assigning a
new role to the state; restructuration of the institutions and the legislation in order to adopt
the domestic economy to global economy and/or markets. More concretely, “…while the
first-generation of reforms placed the state in apassive position vis-á-vis market rules, the
second generation reforms envisage an active-regulating state (re-regulation) undertaking
the mission of expanding the influence of the market to all social spheres. Consequently,
nation-states are charged with the task of redefining and rearranging their insrtitutional and
legal structure, which have been shaped by their historical and social relations, in line with
what global global law and institutions ask for” (Independant Social Scientists’Alliance of
Turkey, 2006:21) .Engagement to “de-politicization” of the distributional process advocated
systematically by the Turkish bourgeosie and the international circles representing the
Washington Concensus and the policies of dismantling of the SPW have been emphasized
particularly during the second-generation reforms. Within this context the gradual marketbased provision of the public goods as health-care, education and social security as well as the
necessary legal and institutional changes take place. Almost the final act is played in 2006:
The social security system is radically transformed with the enactment of the Social Security
and General Health Insurance Law and the Social Security Instıtution Law. Following the
decision of the Supreme Court, the effective date of these legal arrangements is postponed to
1.01.2008. It is remarkable that as a part of the structural reforms the authorities present these
changes as indispensable not only
for the economic.efficiency but also for the
“democratisation” and “modernisation” .
21
The islamic Justice and Development Party (AKP) came to power following the
general elections of October 2002 . The AKP
has a discourse against the IMF and the
neoliberal policies during the electoral campaign and presented somewhat a program
involving some islamic motifs particularly in the field of social policy. It is possible to find
some traces of a “islamic inspired” social policy in this program. But there is no reference
to “social welfare state” and the content of the social policy is not well defined. After taking
office the AKP government has adopted the IMF control and the neoliberal policies. It is
interesting somewhat instructive to find out that the AKP government has fully undertaken
the mission of executing the neoliberal policies but continue to “islamic” discourse.
The
direct allowance-in-kind given to people living in shanty towns, the effective and potantial
supporters of the AKP, could not be considered as a deviation from the neoliberal program.
The AKP government is more determined compared to previous governments in managing
rapidly the second-generation reforms. The market-based provision of education and health
already started in the previous years of structural adjustment has been accelerated under AKP
government. The privatisation as well as the commercialization of the education and health is
supported by generous incentives given to private investors.. In education the number of the
private high schools is rapidly increasing and the private universities is flourishing. The users’
fees are high and the scholarships do not cover a significant portion of the students. A modern
and luxurious but expensive health care system is rapidly instaured. The high income groups
are using this this health care system by means of private health insurance schemes. But the
private hospitals have extended their services to new fractions of the population, i.e. the
middle income group, by means of
contracts made with the formal social security
institutions. The cost of the private health care is paid partially or in some cases entierly by
these institutions. The cost of this new practice is high for the social security funds as the
private health care is very expensive and even the misuse of the system is sometimes the
case. These practices in education and health risk to induce a dual system in human capital
formation and to polarization between the upper and lower income groups (Boratav, Yeldan
and Köse,200: 30). The “market analogy” approach adopted in public sector permit the
authorites to impose higher users’ fees in state universities. The public hospitals do the same
by commercializing their health care services. It is not surprising that the AKP government
trying to accelerate the neoliberal reforms and even to turn the page -under the auspices of the
IMF and the World Bank-, has focused on the social security system - - with enactment of
The Social Security Institution Law and the Social Security and General Insurance Health
Law.
22
According to the official view the “reform” in social security system is necessary in
the context of the
membership negotiations of Turkey with EU opened formally on 3rd
October 2005. In principle the EU is committed to modernising its social model, based on the
shared values of social justice and the active participation of all citizens in economic and
social life. The rules of the –revised- European Social Charter are the important factors in
modelling the Turkish social policy and welfarism.. On theoritical grounds EU policy in the
field of social inclusion and social protection is stipulating the promotion of social cohesion
and equal opportunities for all through adequate, accessible, financially sustainable, adoptable
and efficient social protection system and social inclusion.. Therefore the task is to produce a
decisive impact on the eradication of poverty and social exclusion. In fact the remark above is
corresponding to one of the objectives in the streamlined OMC (Open Method of
Coordination) in the field of pensions and health. Two other objectives are to establish the
interaction “ with the Lisbon objectives on achieving greater economic growth and more and
better jobs with the EU’s Sustainable Development Strategy” and
also to strengthen
“governance, transparency and the involvement of stakeholders in the design, implementation
and monitoring of policy” . Consequently Turkey has to adjust the social security system and
the social policy. The “screening” process and reports indicating Turkey’s present state of
readiness to meet the obligations flowing from EU membership ought to be considered as the
basic guideline for the neceassary adjustment and/or transformation. In other words Turkey
must make the necessary adjustments to acquis communautaire. The screening chapter 19
“social policy and employment” in the acquis has been already evaluated at the bilateral
meeting in 20-22 March 2006 and the screening report is approved at the Council of the EU
with benchmarks (EU Turkey Review, 2006)1 . Within this context it could be possible to
argue, as it is the case in screening chapter 19, that the social security reform consists in;. (a)
Setting up single retirement insurance for all employees, employers, self-employed and civil
servants other than health. (b) Creating a General Health Insurance . (c) Gathering a social
benefits and services that are currently being carried out in a dispersed manner. (d)
Establishing a new institutional structure for providing the services mentioned above.
Neverthless the so-called reform process has been initiated under the pressures of the
IMF and World Bank. All the arrangements introduced by the new law on social security and
general insurance (2006) has been anticipated in the Staff Monitored Program (1998) as well
as in the three successive stand-by arrangements (1999-2000, 2002, 2005) and in some
1
For more information on the Accession Partnership: http://europa.eu.int/comm./enlargement/turkey/
For more information on Turkey’s screening process http://www.abgs.gov.tr
23
eighteen revision rounds of the stand-by arrangements between 2000-2007 (spring). For
example in the Letter of Intent of 17 th Stand-by arrangement (December 9th, 1999) the
authorities are underlining the big deficit in the social security system and propose a reform
in the system in order to have a more sound public finances. The Letter of Intent of the 19th
Stand-by arrrangement (April 26th, 2005) is insisting on the necessity of a comprehensive
social security reform for the improvement of public finances. The proposed reform
package.is composed by three laws:; “... a pension and health reform law introduces
parametric changes while harmonizing the pension formula across occupational groups and
establishes universal health insurance with additional costs largely ofset through measures
under the health transformation program. The reform also reorganizes the fragmented system
into one unified pension fund and one unified health fund. Legislation on social aid
consolidates a multtude of existing programs. Finally an administrative reform law unifies the
governance structure of pensions,health and social assistance programs.” (p.8). One of the
reasons of the reform in social security regime is the rising deficit of the social security. But
this deficit is du to the defects of the dominant capitalist sytem in Turkey. (a) State has no
contribution to social security; the sustainability of the social security system without the
financial support of the state is not possible. (b) The rate of participation to labour force in
Turkey is very low (48 to 49 %).. (c) Defects in collecting the social security premiums, the
use of the funds accumulated in the social securiy institutions in financing public deficit as
well as some other political solutions to the problems relatives to social security. (d) Markedbased provision of the health care, i.e. commercialiasation and privatisation of the services
contributed to deficit of the social security system (Erdoğdu, 2006) The last remarque is of
crucial importance because as we have already emphasized the privatisation of the health care
is concretized by means of allocation of the public funds to private sector. By substituting
rapidly the public units in the health sector, the private sector in a larger extent is providing
the health care. But the high cost of provision is financed by means of social security
institutions, i.e. public funds. On the other hand the proponderant private pension companies
are “ sponsored” by public pension funds which in turn invest these funds in financial
markets. This mechanism is supported by the World Bank and large-scale corporations.
VI. Conclusion
Parallel to restructuring of the world capitalist system the social welfare systems are
subject to readjustment and transformation. The transition from Fordism to post-Fordism lead
the developed countries to change also the social welfare regimes. The dominance of the
24
neoliberal policies in the era of globalisation changed the role of the capitalist state not only in
the field of economic and financial activities but also in the social sphere. The neoliberalism
has radically modified the social welfare regimes in the central eonomies. The big project is
to liquidate for a major part the “social” essence of the regimes and establish a “welfarism”
based on individualism. Divers governments in different countries in coalition with the
holdings of capitalist power as transnational firms, transnational financial corporations and
banks, IMF, World Bank, G-5, G-7, Davos Summit, etc., are engaged to neoliberal
restructuration of the soceties.
Concerning the developing countries the transition from “bloody Taylorism” and
“peripheral Fordism” to “post-peripheral Fordism”
engendered also the transformation of
the social welfare regime. The semi-peripheral welfarism far from responding the social needs
and inapt for eliminating the poverty has been also adjusted by the neoliberal policies. The
market-led globalist welfarism which is characterized by reduced social rights and social
protection, is conform to the needs of the dominant transnational and –associated- domestic
classes and/or capital.
Turkey engaged to neoliberal adjustment policies for almost a decade under the
auspices of the Bretton Woods institutions is advanced in completing the second-generation
reforms. The public services sector and the social security regime are subject to re-adjustment
which wiould manage the compatibility with market solutions . Just to the contrary of the
arguments in favour of the so-called reforms, this re-adjustment and/or conversion would not
be advantageous to the majority of the population. The compatibility with the European
Social Model is not a concrete target;on the one hand this model is not so clear and definite,
(EuromeMemorandum, 2004), on the other hand the government engaged to neoliberal
solutions has already lost her perspectives on social welfare. Given the problems occured in
Washington Concensus (Rodrik, 2006) and new engagements in several countries (Latin
America) Turkey has to break her engagement to neoliberal policies and to create the
necessary conditions for a new social welfare state.
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