Contemporary Europe:

Challenges facing Society

Dr Neil Lee

n.d.lee@lse.ac.uk

@ndrlee

Aims of the course

• Understand different European social models
• Consider how theory helps us do this 
• Think about Europe's future, and how policy can help

How to do well

• Read a lot, actively, while taking notes  
• Be proactive - take responsibility for your learning
• Ask questions when you don't understand
• Be critical: there is often no single 'right' answer

Who we are

What you will learn

Europe is diverse

Sweden

GDP per capita = 122% of EU Average (2017)

Romania​

GDP per capita = 63% of EU Average (2017)

Rich vs. Poor

Germany

Population: 82,850,000 (2018)

Malta

Population: 475,700

(2018)

Large vs. Small

How do we understand this diversity?

• Option 1: Get lost in detail - Europe is simply too complicated to describe 
• Option 2: Simplify and synthesise the complexity into models reflecting the key elements of 'real life'

Published in 1990 (based on data from the 1980s)

The state was changing: from functional (military, services) to regulatory / redistributive

This meant the state was increasingly shaping society

Three diverse 'regime types' - each with its own logic of organisation, stratification and social integration 

Two key concepts

• De-commodification

  • The degree to which social service is a right / the degree to which a person can live without reliance on the market

  • e.g. When childcare is provided by the state it is decommodified

• Social stratification​

  • ​Extent to which social stratification is promoted by social policy > does the welfare state broaden or narrow solidarities?

3 Regime types

Liberal regimes

Characterised by: 

Means testing

Modest transfers

Liberal work ethic

Only those on v. low incomes are state dependent

Welfare is determined by the market, with equality of poverty at the bottom

Corporatist

Characterised by: 

No liberal obsession with efficiency / commodification

Negligible redistribution

“Familyhood” seen as important – social insurance excludes non-working

Benefits encourage mothers to stay at home / childcare is underrepresented

Text

Corporatist countries: Germany, France, Austria, Italy 

Social democratic

Characterised by: 

–Equality of the highest standards

–Services benefits upgraded to ensure all have higher standards

–Decommodified

–Crowds out market provision

What's good and bad about this typology? 

(Don't look at the next slide)

Some problems 

• Mixed cases – countries take elements of different types

• Inadequate treatment of gender (Crouch 2008)

• Not comprehensive (some countries ignored)

• Now dated?

“welfare states cluster, but we must recognize that there is no single pure case. The Scandinavian countries may be predominantly social democratic, but they are not free of crucial Liberal elements. Neither are the Liberal regimes pure types. The American social-security system is redistributive, compulsory and far from actuarial. At least in its early formulation, the New Deal was as social democratic as was contemporary Scandinavian social democracy. And European conservative regimes have incorporated both Liberal and social democratic impulses. Over the decades, they have become less corporatist and less authoritarian”

The defence from Esping-Andersen (1990: 28-29)

Varieties of Capitalism

Elements of a VoC approach:

Relational view of the firm

Firms need to overcome coordination problems

1. Industrial relations - coordination of wage bargaining / working conditions

2. Vocational training / education - firms need skills, workers need to know skills to acquire

3. Corporate governance - firms seek finance, investors seek returns on capital

4. Inter-firm relations - stable demand with stable supplies

5. Employees - making sure they cooperate with each other and have the competencies they need

Key concept: Institutions

“Following North (1990: 3), we define institutions as a set of rules, formal or informal, that actors generally follow, whether for normative, cognitive, or material reasons, and organisations as durable entities with formally recognized members, whose rules also contribute to the institutions of the political economy”

•

Hall and Soskice, 2009: 28

Hall & Soskice's Varieties of Capitalism

Liberal market economies - Market coordination

Hall & Soskice's Varieties of Capitalism

Liberal market economies - Market coordination

Coordinated market economies - Institutional coordination

Hall & Soskice's Varieties of Capitalism

Ambigous /

missing

France

Italy

Spain

Portugal

GreeceTurkey

Problems with VoC?

• Generalises from a point in time - countries evolve
• Things have changed since 2005 (Germany)
• Countries can be socially inclusive for some, not others

  Conclusions

• Europe is a complicated place - to understand it we need to simplify
• Today we've considered two typologies
  • Three World's of Welfare Capitalism
  • Varieties of Capitalism  
• Both are helpful, but neither is perfect
  • Systems change
  • Boundaries are blurred
  • Models are imperfect