Raghu Kumar
Though I am not a student of economics by training I developed an interest on general theories of economics as this branch of study influences the human societies more decisively and directly than others. As a student of law I am introduced to principles of the Constitution of India and to some extent I have a higher inclination towards constitutionalism. I understood the nature of Indian State as egalitarian, and much nearer to a social democracy. The Indian Constitution, in its Preamble, proclaims to constitute India into a ‘sovereign democratic republic’ with a pledge to secure to all its citizens – ‘justice, social, economic and political’. This was a solemn proclamation of the people – “We, the people of India”. We started our tryst with destiny on the midnight of August 15, 1947, and firmed up our resolve again on January 26, 1950. The Preamble, along with Directive Principles, had held a hope, if not immediately, but in a long run, of an egalitarian State, or a Welfare State.
Much earlier, in March, 1931, the Congress Session, held at Karachi, adopted the Resolution on the Fundamental Rights and Economic and Social Change, which was both a declaration of rights and a humanitarian socialist manifesto. The Karachi Resolution stated that ‘in order to end the exploitation of the masses, political freedom must include the real economic freedom of the starving millions’. The State was to safeguard ‘the interests of industrial workers’, ensuring that ‘suitable legislation’ should secure them a living wage, healthy conditions, limited hours of labour, and protection from ‘the economic consequences of old age, sickness, and unemployment. Women and children were also to be protected against exploitation and economic coercion. The State was to ‘own or control key industries and services, mineral resources, railways, waterways, shipping and other means of public transport’.
In catena of judgments the Supreme Court defended vociferously the idea of ‘social justice’ [see D. S. Nakara v. Union of India AIR 1983 SC 130]. Democratic socialism in the Constitution was said to aim to end poverty, ignorance, disease and inequality of opportunity. The insertion of the word ‘socialism’ through the 42nd Amendment fortified the governing economic philosophy of the State, conveyed earlier through non-justiciable directive principles, and made the State’s commitment constitutional. In Kerala Hotel and Restaurant Association v. State of Kerala, AIR 1990 SC 913, the Supreme Court upheld “the principle of promoting economic equality in the society which must, undoubtedly, govern formulation of the fiscal policy of the State.” The Indian working class had become a welcome guest in the corridors of justice during 1980s and early 1990s when the legal institutions reverberated with public interest litigation on behalf of the poor and the unheard [see People’s Union for Democratic Rights & others v. UOI, 1982 AIR 1473; Bandhuva Mukti Morcha v. UOI, AIR SC 802, Mehta M.C v. UOI AIR 1987 SC 1086 and many more]
But we woke up into 1990s with some less-known realities where the world was talking about TINA, and the Indian nation was hurrying to join the international economy. The word ‘socialism’ was looked down with consternation and slowly rendered redundant. The New Economic Policy (NEP) 1991 introduced a break in the slow yet steady march of socialism and the juggernaut of Liberalization, Privatization and Globalization (LPG) started rolling, crushing under its iron feet the little ‘welfarism’ India was talking about till then. The working class lost its preferred position in the corridors of justice, and all those previous invocations of ‘socialism’ and ‘social justice’ sounded hallow and appeared to have lost their teeth. As students of law, and convinced of the Constitution, constitutionalism, and the State’s commitment to the Welfare of the common citizens we were unable to reconcile to the unfolding socio-economic realities.
It was the time when the Soviet bloc started crumbling. Lech Walesa from Poland was challenging the truth of socialism under the socialist regimes, and was leading the solidarity movement. The comrades in the East Germany were trying to demolish the artificial walls dividing them from their West Germany’s counterparts. In the very epicentre of socialism, USSR, Michael Gorbachev was coining new words such as glasnost and perestroika. The claims of superior and true democracies by the communist countries in contradistinction to the liberal democracies as the torchbearers of equality, fraternity and liberty had fallen flat with incidents of the military tanks running over the Tienanmen Square and ruffled our socialist consciousness.
Contemplating alternative models
It was also the time when we were searching for causes and contemplating alternative models. Was there any better model we missed in our obsessions with Marxist socialism? Were there any better experiments conducted in other parts of the world? We were told by some learned men that the Scandinavian countries have conducted the experiments of welfarism better than the stronger Marxist States. We were also told that social democrats did a better job in the areas of social security and in the distribution of wealth among the people more equitably. We were also informed that countries like Canada, and even capitalist countries like US elevated the working class to a more secured status. I could gather some bits and pieces of information through certain scattered works dealing with ‘social security’. But none were comprehensive. This deficiency has been troubling me for quite some time, when one day recently Ravela Somayya gave this 250 page detailed study of the Welfare State System and Common Security written by Prof B Vivekanandan. “The Welfare State System and Common Security – A Global Vision for a Common Future” with a foreword by J.P. Roos, published by Palgrave Macmillan, Cham, Switzerland is a comprehensive and detailed study of the subject. It has presented before us the work done by the governments of Sweden, Finland, and Canada. It argues about the relevance of well-defined welfare states at the national to the common security of the humanity the world over.
Prof B. Vivekanandan, is a former chairperson of the Centre for American and West European Studies, at the School of International Studies, Jawaharlal Nehru University, New Delhi. He has also been visiting professor at Carleton University and the University of Helsinki and a visiting Fellow at the University of Konstanz, Germany; the Karl Renner Institute, Austria; and the Olof Palme International Centre, Sweden. He is the lone Indian recipient of the highest honour, Honourary Doctorate of Social Sciences D.S.Sc (h.c) of the University of Helsinki, in the history of the award. He has been the author, co-author, edited and co-edited 36 books on international relations, foreign and security policy, social democracy, welfare state systems. They include Building on Solidarity, Welfare State System in Scandinavia: Lessons for India, Welfare States and the Future [Co-author], Why Social Democracy: Essays. The present book presents the Welfare State System as the best system for the world in the future. Prof. J.P Roots in his introduction says that Vivekanandan stresses the idea that ‘Common Security System, as an external component of a complementary security architecture, can easily form an integral part of an internal Welfare State System of countries.’ [J.P. Roos, Introduction, p.viii]. The Welfare State in Vivekanandan’s book ‘is very much a Nordic and European affair. … However, … does not restrict his overview only to Europe and the Nordic countries. He offers an extensive view of the development of the Canadian Welfare State System also. … He describes Finland as an example partly from this perspective … discusses extensively the effects of the 1990 economic crisis on the Finnish Welfare State, as well as the impact of the European Union, which Finland joined in 1995.’ [ibid, p.ix]
Poverty, a threat to prosperity
“Poverty anywhere is a threat to prosperity everywhere” proclaims the Philadelphia Declaration, 1944 of the ILO. But what is poverty? And what consequences it can unleash on the peace and prosperity of the world order? How do the world governments intend to and prepare themselves to face this challenge? These are the searching questions that still remained fully unexplored. It may even be the case that the rich nations consciously try to sweep this harsh reality under the carpet. Any conceptualization of ‘welfare State’ could never remain local. Thus Roos opines that “the establishment of the Welfare State System in all parts of the world would form a firm foundation for stable domestic peace everywhere.” [ibid, p.x]
Why a Welfare State and Common Security Vision? Vivekanandan places his perspective before us to answer this question in the expression that “a peaceful, contented ‘One World’ is the goal. Welfare State System and Common Security are the means.” (ibid, p.1) The dream of this “One World” has been fascinating the noble and enlightened minds since ages. The history of the twentieth century created certain compulsions for realization of the same, though it is still a distant dream. The reality of nation-States has also been the byproduct of the twentieth century, which places the idea of ‘sovereignty’ over and above the common interests of the people at large. Most modern democracies placed the welfare of the people at the centre and the beginnings of this realization is always within the national boundaries. But a welfare state within, has all the potential to create a common security system at the global level. For the realization of the idea of welfare State we need to survey and identify the best possible systems evolved so far in the world order. It is here the present work of Vivekanandan comes handy to us. He says: “In comparison with all other socio-economic and political systems experimented hitherto in the world, the cradle to the grave Welfare State System institutionalized in Sweden, and other Scandinavian countries, is the best one. This is because the system is universal and is steeped in politics of cooperation and solidarity in dealing with everyday needs and aspirations of all people in the country equitably, without discrimination.” (p.3)
But ‘the fulcrum of the Welfare State System is a benign democratic state.’ (p.5) “Welfare State System is the best form of social system the world statesmen and humanists have ever articulated, and established, in different parts of the world, during the last nine decades, with the objective of solving problems of social inequality and social exclusion.” (p.8) Globalization has impacted the general economy of developing nations and their efforts towards establishment of a welfare system. The author also notes that ‘though globalisation as an idea has provided a global framework for policies, the economic and financial globalisation, led by World Bank’s ‘three pillar model’ of privatisation of certain welfare state provisions, had a negative impact. (p. 11)
While it is true that ‘Europe is the cradle of modern Welfare System’, and ‘the most outstanding model of a modern Welfare System is Sweden followed by the systems established in other Scandinavian countries like Denmark, Norway, and Finland’, India also travelled on the path of welfare economics, with all the constraints of a depleted economy owing to years of exploitative colonial rule. It made certain decisive steps towards an egalitarian model already available in the west. As correctly observed by the author, “some progress in the implementation of the welfare state provisions in the Indian Constitution has been made during the prime ministerships of Jawaharlal Nehru, Indira Gandhi and Morarji Desai, though the speed and the spread of it was short of expectations.’ (p.22) ‘But, the programme suffered a serious setback since 1990s, after a World Bank nominee, Dr. Manmohan Singh, positioned himself as India’s finance minister, and later as prime minister for ten years – a total of 15 years, who made every effort from inside, to hollow out the state from the arena of public welfare.’ (p.22-23)
Social security and welfare state contributed to better health and longevity in Canada, and other Scandinavian countries. But it also caused certain demographic changes. It is very interesting to note one important observation made by Vivekanadan when he says: “In concrete terms, demographic change would mean that the number of people getting into the job market would be less than the number of people retiring. It would also mean a reduction in contributory revenue, and an increase in social expenditure.” “Demographic change due to low birth rates and high life expectancy is a potential threat to welfare states in many parts of the world. Indeed, the population crisis question, especially the prospects of a shrinking population and its consequences, became a live public issue in the Swedish Social Democratic circles ever since Gunnar Myrdal and Alya Myrdal, economists, published a book in 1934 under the title “Crisis in the Population Question.” (p.30)
Sweden leads in welfare
The book examines the best available models in the world on the welfarism. We find a detailed study of the models in Sweden, Finland and Canada. Each case study not only traces the historical and theoretical foundation for the welfarism and contextualizes the issue while examining the impact of (Liberalization, Privatization, and Globalization (LPG) in each case. ‘The Swedish Social Democratic governments have built up the most advanced Welfare States System in the country, between 1930s and 1960s from these basic premises and transformed Sweden into a Folkhemmet (People’s Home), conceptualised by their leader Per Albin Hansson.’ (p.37). ‘Taking a cue from Sweden, all other Scandinavian countries like Norway, Denmark, Finland and Iceland have adopted the Welfare State System, more or less similar to the Swedish system and made and impressive change in the psyche and ethos of all these countries and their peoples in the region. As a result, they present the picture of the most honest, courteous, civilised, peaceful and contented humans in the world. They now hesitate even to use an offensive language against their adversaries.’ (p.57) This book is a rich source for all those who are interested in experimenting alternative models of development in the tradition of social democrats.
But the experience of each of these models, especially after the advent of globalization also deserves a mention. “The economic crisis in Finland in early 1990s was a severe one which had an adverse impact on the Finnish Welfare State System. It was not the result of a sudden development. It was the outcome of some stealthy moves, of a few high ups in the Finnish bureaucracy, to prematurely integrate the Finnish economy with globalisation, liberalisation and privatisation process, and to impress upon the European Union that Finland was making important change to become eligible to join the European Union.” (p.74) “In consequence, after 1997, a majority of jobless people were found among those who received means tested minimum unemployment security benefits.” “Recession had adversely affected the provision of healthcare and social services in Finland.” (p.87) “Recession made a big impact on the financing of public welfare state schemes. Hitherto a stable economy, which showed a public finance surplus of 6 percent of the GDP in 1990, after a couple of years it caved in and slid down to 8 percent deficit of the GDP. To curb state debt, the government took resort to effect stringent measures to cut down public expenditure.” (p.88) “Under the cloak of recession, the Finnish establishment could smoothly impose new burdens on the wage and salary earners, which in normal times would have met with robust opposition.” (p. 89) “Recession had put public finances from a healthy surplus into a deficit syndrome.” (p. 91) “To harness its savings, the central government had drastically cut its money transfers to municipalities for welfare services.” (p. 91) “The aftermath of the recession saw significant restructuring of healthcare and pension systems.” (p. 93)
Globalization also led to formation of certain regional economic blocs. One such development has been the European Union. But the country specific interests and the interests of the EU have their own dichotomies. “… there is a dichotomy between the market principles of EU’s internal market and the political principles based on equitable redistribution of the fruits of growth in advanced Welfare State System of Finland.” (p. 97) “… EU promotes free market system, and its agenda is economic growth, profit and widening of its market worldwide, and not to simultaneously pursue social or distributive justice nor to pursue egalitarian principles of equality, justice or solidarity. EU promotes trickledown effect which is contrary to Welfare State System and distributive justice.” (p. 99)
Impact of globalization on welfare state
The case of Canada also testifies to the pressures of globalization on its Wefarism. “If the 1960s witnessed the flowering of Canada as an advanced welfare state, the 1980s witnessed mounting attacks on the role of the state as a provider. This was partially stimulated by the growing demands on public expenditure due to increasing unemployment and due to demographic changes caused by the growing size of the ageing population in the country. The main focus of these attacks was on the universalistic element ingrained in the welfare state programmes. That was also the time when massive and sustained attacks on the Welfare State System were launched by Thatcher and Reagan administrations in Britain and the United States, breaking the bipartisan consensus that prevailed in Britain and the United States on the publicity funded Welfare State Systems.” (p. 141) “The 1980s and 1990s witnessed drastic changes in the structure and policies of the Canadian state.” (p. 144) “Yet, Canada ranks among the most advanced welfare states in the world, with several strands of welfare benefits disbursed through a string of programmes ranging from universality to those which disburse specific welfare benefits to the categories of the population through multiple kinds of insurance and social assistance programmes.” (p. 145)
‘Common Security’ is the second important theme of this book. In fact, the welfare state is an internal construction which scaffolds the common security at the international level. It ‘is one of the two strong and mutually reinforcing components of the peace structure which this book presents for ensuring common future well being of humanity; the other component of it being the Welfare State System.’ (p. 163) ‘It is undeniable that a peaceful and secure environment is imperative for universal public welfare.’ (p. 164) ‘Though world bodies like the League of Nations and the United Nations, were established with the objective of building up a peaceful world, they failed to live up to the expectations of their founders, because they were made super structures, bereft of supporting national domestic structures, attuned to peace, equality and justice.’ (p. 164) ‘While the Super Powers and their military blocs competed with one another to maintain superiority over the other at the global level, at the regional level, countries have followed the same strategy and reduced themselves as lucrative markets of arms exporting countries.’ (p. 168)
More than many international organizations, ‘European Socialist and Social Democratic Parties paid serious attention to this irrational and unsustainable approach to ensure national security from 1970s and looked for alternative approaches for the maintenance of peace and security in the world.’ (p. 169) ‘In early 1980s social democrats of Europe have paid attention to the negative impact of the deterrence security strategy, by posing a fundamental question, whether the same objective of ensuring security can be achieved through a more sensible alternative, and by bringing an end to arms race and high military spending. The Swedish statesman, Olof Palme, paid special attention to this all important question, and decided to stop the world from ‘the march of folly’ it is currently engaged in.’ (p. 169-70) ‘Common security is a solidarity approach to international security relations.’ (p.170) ‘The debate on Common Security since 1982 seems to have made an impact on the general outlook of countries. Compared to 1970s, they now show greater spirit of cooperation in the current epoch, brightening the prospects of creating more peaceful and humane world.’ (p. 184-85) ‘The bountiful resources the Common Security System would release, in real terms, in every country, can transform the World into a peaceful prosperous and contented Common Home of all people. It would create a new world where there would be no need for people to migrate from their countries and Continents in search of better means of livelihood.’ (p. 186)
The Scandinavian / Nordic Welfare States are considered as the most approximate international peace and security models. “In the annals of societal reconstruction, the Scandinavian / Nordic Welfare States – Sweden, Denmark, Norway, Finland and Iceland – have made a significant contribution to the advancement of human civilisation in the twentieth century and have become for other states and regions for emulation.” (p. 189) ‘Its philosophical foundation was laid on the principles of democratic socialism, as articulated by the Social Democratic Parties (SDPs) of Scandinavia.’ (p. 190) ‘Though the initial objective of the welfare state was alleviation of poverty, the Nordic Welfare States have gone for beyond that agenda and enveloped in it larger objectives like reduction of inequality and promotion of distributive justice and human solidarity, in addition to programmes like social insurance and provision of social services to the needy people.’ (p. 191) ‘The fulcrum of the Nordic Welfare State System is a full employment policy pursued by the Nordic States which have sustained the system all along.’ (p.192)
Recession and budget deficits
‘However, the strain the Nordic economies had experienced in the early 1990s, following recession and budget deficits, led many Conservatives and neo-liberal analysts to hastily apportion the blame to it on the Welfare State System, although the cause of the strain lay elsewhere.’ (p. 194) ‘Despite these changes, the general view is that the core elements of the Nordic Welfare States remain more or less intact.’ (p. 195) ‘Yet, certain difficulties loom large in the horizon for the Nordic states, though they are not exclusive phenomena of the region. One is the demographic change that is under way in the region.’ (p. 196) ‘Indeed, the Nordic cooperation system has provided a regional model of the Common Security system.’ (p. 203) ‘India looks at the Scandinavian Welfare State System with profound admiration, since the system remains the largest successful human solidarity project in the world. Since its independence in 1947, India has tried to introduce the rudiments of a Welfare State System in the Country.’ (p. 203)
‘Thomas Piketty, a French economist, in his classic work, ‘Capital in the twenty First century’ has delved into the issues of inequality. According to Piketty, inequality is a social and historical phenomenon based on the larger phenomenon of wealth flows and income distribution.’ (p. 218) ‘Among all the socio-economic political systems hitherto rested in the world, the Welfare State System is the finest one.’ (p. 219) ‘It must be recognised that largely due to the advancement of science and technology particularly information technology, the world has shrunk in a big way and it would continue to do so in the coming decades as well. The environmental changes also signal the common destiny of the world to sink or sail together.’ (p. 220)
‘The world is spending so much for arms when, according to a UN Report released on 20 June 2018, in 2016 there were about 815 million malnourished people in the World. In India, 20 percent households come under the category of the poorest.’ (p. 228)
Spending on arms purchase
‘These national resources, spent for arms purchase under the populations of the deterrence doctrine, can be saved through appropriate joint political decisions of statesmen and channelled for human development and welfare, while ensuring the national security in another way, with the help of minimum conventional armaments. Common Security is the magic word for it, which can transform the recurring annual wastage of military expenditure into productive resource for building up institutional welfare states.’ (p. 228) ‘In this context, it is exciting that a wind of change favourable to democratic socialism and the Welfare State System has started blowing even in the United States. With the US Senator Bernie Sanders as the new torch bearer, millions of young Americans are demanding reform of the United States into a Welfare State, based on equality and distributive justice.’ ‘Welfare State System is a civilizational projects, anchored in human solidarity. … the Welfare State System, complemented by a Common Security System worldwide, is a civilised and civilising project of modern times.’ (p. 241)
‘The Welfare State System and Common Security – A Global Vision for a Common Future’ is a source book for all the students, thinkers and activists in search of alternatives for a better social order, especially in an unfolding reality that the classical ideas of ‘socialism’ failed to inspire new epochal changes in the world order of exploitative capitalism. The world needs a new look and demands creation of new environments for a stable and secured progress of the human beings. The concluding para of the book draws our attention to the thoughts of the then Prime Minister of England, Clement Attlee when he said: “In all great enterprises it is the first steps that are difficult, and it is the way in which these are taken, that makes the difference between success and failure.” The initial moves are made by the Scandinavian countries, and ‘it is the turn of others to follow the lead and reap its benefits.’
- Raghu kumar
Advocate,
Director, Center for Social Dialogue, Hyderabad
Author of “Gandhi – A Hope in Despair” (2020) and
“Revisiting Rammanohar Lohia –
Challenges to Theory & Practice of Alternative Socialism” (2022)
