Pierson, C. (2021). The Next Welfare State? UK Welfare After COVID-19. Policy Press.
Where does the welfare state head? has been a crucial question in the UK since the crisis of the Welfare State in the 1970s. In his book, Christopher Pierson, a prominent scholar in social policies, presents a new yet old and highly persuasive perspective. The subtitle of this volume, UK Welfare after COVID-19, suggests that the author will describe in detail how COVID-19 or even Brexit have impacted the British welfare state. Instead, Pierson declares in the Introduction, “This is a book about welfare after COVID. But it is very much not a book that is solely concerned with what COVID has done to the political economy of welfare in Britain”.
Fifty years have passed since the limits of the Welfare State were outlined, and Pierson is keen to discuss what direction the Welfare State might take in the future and what its future potential might be. What particularly caught my eye in the Introduction was that the wording he focused on when considering this issue was none other than the phrase ‘strategy of equality’. This is the exact title of a chapter in R. H. Tawney’s Equality, first published in the 1930s, and a book by Julian Le Grand, published in 1982. After reading this phrase and glancing at the title of chapter 3, ‘Back to the future, again’, some readers might be tempted to predict what this phrase means. And for readers who believe that now is the time to reconsider ideas of political economy associated with social democracy, which had been the dominant tradition before the founding of the Welfare State, you can expect some exciting developments at this point. The first chapter aims to “uncover what the UK welfare regime was like just before the COVID-19 crisis”, focusing on the decade of austerity starting in 2010 instituted by the Conservative Party led Government. Pierson argues that low-income families with large families were most affected due to welfare reforms that focused resources on those already in need in a mission to reduce ‘welfare dependency’. Even if the political narrative was that the welfare state’s work of redistribution is finished, Britain remained a deeply divided and unequal society.
In chapter 2, Pierson evaluates New Labour under Tony Blair and Gordon Brown (1997 – 2010). Pierson’s doesn’t buy the concept of New Labour. He rejects the familiar notion that the Third Way (see Giddens, 1998) was the basis of something new. Rather, his view was that New Labour did not, in fact, propose a new social democracy but rather re-iterates previous forms of social democracy. But isn’t this just ‘Old Labour’? Pierson points to Giddens’ definition of Old Labour who refers to key figures such as William Beveridge, Tom Marshall, and Tony Crosland, and policies such as nationalisation, redistribution of income and wealth, and an extended public sector. Pierson’s understanding of Old Labour is expressed in his interpretation of Blair. That is, “[Blair’s] ambition is…to take a step further back and to bring together…the ‘two great streams of left-of-centre thought’ parted in the early 20th century–‘democratic socialism and liberalism’ (p. 59)”.
Liberalism, when Pierson here referring to Blair, is different in nature from the neoliberalism that has been prevalent since the 1970s. It is sense of Liberalism which flourished in the late nineteenth century. This Liberalism has a tradition that focuses on social freedom in which the state actively intervenes in society and the economy to realise welfare and equality, based on the reconsideration of classical laissez-faire. This type of liberalism is quite different from Hayek’s neoliberalism which influenced Thatcher, as is clear also from Michael Freeden’s analysis in Liberalism: A Very Short Introduction. (Oxford University Press, 2013). Similarly, the social democracy invoked here, is what Pierson calls “value-based socialism”. Specifically, it is a social democracy influenced by 19th century Liberalism going back to thinkers such as Hobhouse and Hobson. Pierson says “The only alternative is to go back to a still earlier and value-driven variant: a value-based ethical socialism. The origins of this view lie as much with the New Liberals–Blair names Hobhouse and Hobson, among others–as with Labour’s social democrats (p. 59)”.
In Pierson’s former book Beyond the Welfare State (3rd ed., 2007), Pierson mentions that the Keynesian welfare state was no longer sustainable. This view, in fact, would have been shared with those who had contributed to constructing the British welfare state in the interwar period. In other words, there had been rich social democratic discourses before the Welfare State was established in the UK, and each of these discourses clearly could have been a potential tool in sustaining a post-war welfare society in Britain. Pierson notes the legacy of the ‘old’ British social democratic tradition in chapter 3 of this book. For example, with G.D.H. Cole, why he had faded away from guild socialism might be the point we most want to know. With Tawney, I could expect the author to delve into the nature of Tawney’s ethical socialism, its roots, and why ethics can be a socialist norm. But it would be unreasonable to ask him to go that far. The book’s main appeal is to use Pierson’s words, to explore “the dust-covered boxes in the lumber room of old Labour ideas”, and you will find “treasure boxes” there!
In chapter 4, Pierson shifts focus to the future with regard to the following issues: an ageing society, the idea of social investment or Universal Basic Income (UBI), and the challenges of climate change. He engages with three leading scholars who lead these issues; Branko Milanovic, Thomas Piketty, and Ian Gough. But once again, what Pierson finds in the writings of these three authors echoes with an earlier generation, which he referred to in the previous chapter. The suggestion that Pierson has been making for years, ‘the welfare state is not going to disappear,’ still prevails in this chapter. By referencing three concepts of austerity outlined by Paul Pierson in 1998, including ‘slowed economic growth’, ‘reaching the limits of existing governmental commitments to welfare’, and ‘the ageing of the population’, the author explores the potential for a future welfare state. This exploration involves a reevaluation of social investment and asset-based welfare, as well as a positive assessment of UBI. Pierson suggests an alternative to the traditional approach of relying on economic growth to address redistribution, which has become a vulnerability or weakness in Keynesianism. Take, for example, the idea of UBI. Pierson generally holds an optimistic view of UBI, whilst I would like to highlight a potential challenge in its implementation. From the perspective of Japan, which is a Welfare State characterised by a blend of neoliberalism, social democracy, conservatism, and a Confucius ethos, one hidden issue with UBI is the risk of it being exploited by neoliberalism. The UBI could be a policy of reversing traditional social security in exchange for an extremely low basic income payment and universal income distribution. Such a transformation is unlikely in a state with firmly established social rights, but neoliberal parties and politicians, in fact in Japan, are advocating this.
The attempts to deal with the social, political, and economic impacts of COVID-19 have brought about a tremendous debt burden to the UK. However, at the same time, it has made us reevaluate the indispensability of the welfare state. This statement introduces the conclusion of this book, and it is reflected in the book’s title, The Next Welfare State? rather than The End of Welfare State. So, what comes next? Pierson’s proposal can be succinctly summed up as a reexamination of social democracy from ‘Old Labour’ social thinkers who inherited the tradition of 19th-century social liberalism that predates the establishment of the Welfare State in 1945. New Labour deserves some commendation for realising some of the ideals of Old Labour, especially in addressing issues like child poverty and education. More to the point, it’s time to reevaluate the criticisms of the concept of social investment and asset-based welfare. Pierson’s response to critiques on the idea of social investment by figures such as Ruth Lister or Brian Nolan naturally follows his proposal in Chapter 3, titled ‘Go Back to the Future’. Indeed, he cites a passage from Tawney’s Equality: ‘The greater part of the expenditure on social services is not a liability but an investment’ (Tawney, 1964:156) shortly after discussing their criticisms. It would be too hasty to judge the Third Way as a complete failure. While it is true that basically Blair’s policies were an extension of capitalism, labelling them as almost continuations of neoliberalism might hinder our possibility to recognise the potential for the Third Way approach to rebuilding the Welfare State.
Despite the subtitle of this book, UK Welfare After COVID-19, its arguments should be considered a distinct proposal for the future of the Welfare State, whether or not the COVID-19 disaster is in the picture. The book posits that the central tenet of the Welfare State is the pursuit of equality. Within the framework of equality, it is essential to reconsider how social institutions and policies can serve as the means and strategies to achieve this objective because these ideas closely align with the principles of the pre-welfare state, or British social-liberal democracy. The Keynesian Welfare State, established in 1945 by the Atlee government, was just the tip of the iceberg of a broad-based social democracy with ethical values introduced in 19th-century liberalism in Britain. This book reminds us of the richness of the tradition of values in ethics and social-liberal democracy in Britain and makes us realise that it is worth exploring again.
Masako Hayashi is a Research Fellow of Japan Society for the Promotion of Science and a visiting Doctoral Fellow at Goldsmiths, University of London, whilst a PhD student of Tokyo Metropolitan University