ABSTRACT
The notion of “welfare capitalism” refers to a political-economic regime that integrates the functions of a capitalist market economy with the functions of a democratic welfare state. The term is commonly used by Esping-Andersen (1990) in The Three Worlds of Welfare Capitalism, but it is also linked to Marshall’s (1950, p14) idea of three generations of rights, which all form part of modern citizenship: civil rights, political rights, and social rights. The question that this chapter seeks to address is how social rights, which Esping-Andersen and Marshall understood as the apex of the democratic welfare state, remain bound to the logic of the capitalist market economy. Employing the perspective of the economic sociology of law, it will be argued that the transformation of welfare capitalism over the last few decades has led to a reinterpretation of social rights in the light of economic incentives. To make this point, changes in the financial structure of the welfare state, both on its revenue and expenditure side, will be connected with changes in the moral discourse on citizens’ rights and duties, which is increasingly informed by economic arguments. The chapter first outlines the analytical framework that connects the language
of social rights with the concept of welfare capitalism. In the perspective of the economic sociology of law, scholarship in comparative and critical political economy can be fruitfully integrated and related with the moral-economy approach, which is particularly suited to document a loss of entitlements, or accustomed social rights. The following analysis is divided into two parts. The chapter first turns to the revenue side of the welfare state and explores the moral economy of taxation, emphasising changes over time and across different welfare regimes. What we can, by and large, observe, is a move from “contribution tax” to “exchange tax”, or a renegotiation between social rights and property rights. The chapter then proceeds to discuss the expenditure side of the welfare state and the moral economy of debt, again focusing on the overall patterns of development. Accordingly, we are not only witnessing a transition “from welfare to workfare” but also “from welfare to debtfare”, which replaces unconditional social rights or welfare benefits with activation in the labour market and the credit market. The chapter
concludes by interpreting the above developments in the light of the social contract, or social compromise, underlying welfare capitalism.
