Is welfare finished?
Is welfare finished?
The traditional welfare state, linked to the industrial economy, has reached a deadlock, but not because protection is incompatible with economic development, as certain lines of thinking would have it. The new globalised economy rather demands a preventive type of welfare, which is more effective in the fields of education, health and the environment.
gate in the london borough of anfield and ceasing the house of lords for labor okay representative professor a member of the lord important a discipline philosophy over his scientific contributions this has been very relevant he wrote about a new philosophy of sociology based on a reinterpretation of classics uh marx duncan and weber and all this ending up in a holistic analysis and based on this he developed a solid theory of modernity and a critique of post modernity in terms of public debate gideon's has given a formidable contribution to the development of thought and to the development of social democratic forces in particular the labour party in the uk and the democratic party in the u.s books such as the third way and beyond the left and the right have inspired the progressive front in the uk in the us but also in europe gideon has demonstrated the importance of social sciences in order to understand deal with and possibly govern the great challenges of our times so professor gideon do you have the floor well um thank you very much for that um kind introduction and i'd like to say what a pleasure is to be here this evening in such a lovely setting and thank the organizers for inviting me and thank mr latta and his publishing company for translating my book europe in the global age which i came partly to celebrate here i must say i think the festival of economics is an amazing event it's quite extraordinary the range of speakers that you have at this event and it's also quite amazing the degree of public interest in the event and i'd like to congratulate everyone who is involved with this because i think it is a major innovation which in my view could easily be copied elsewhere i used to be the head of london school of economics and i'm only sorry that we didn't think of it first because it's a really i think uh tremendously impressive event well i've just written a new book which is called over to you mr brown it's uh that's that's tony blair fading away from view fading away from history and this is mr brown who's going to be the new prime minister of britain within four weeks time or something coming into view much more clearly as mr blair makes his exit from the sidelines not so interesting to people in italy because it's mostly about parochial british politics nevertheless with mr brown with mr sarkozy with mrs merkel hopefully mr prody too we have a generation of european leaders who we hope will move the european project onwards this book i've just written is different from other books i've written previously it was mentioned i like to write books but this one is a bit different because it's aimed at a wide audience and different in two main respects one is that it has quite a strong autobiographical in it i describe how i got involved in politics in britain the connections between academic life and politics are much fewer than they are in italy it's very uncommon very very uncommon for anyone to move out of the academic world into the political sphere and even more uncommon for politicians to move from the political sphere into the academy so it was a big transition in my life really when i started to get involved more with politics and not just do as i used to do which was to write books on social theory which professor pudgy knows very well which were hard to understand poorly written now i try to write books better than i used to for a much more general audience than i used to my involvement with politics really started in the discussions which uh tony blair when he first got into power had with president clinton and the american democrats those discussions started in 1997. the first one was held in the prime minister's main country residence in britain which is called checkers hillary clinton was there bill clinton didn't come to that one there are about four or five members of the american cabinet at that time and several members of the british cabinet including the aforesaid mr brown as well as mr blair who was there that started a whole range of debates which became more internationalized on the center left the next meeting was actually in the white house and i can tell you for a sociologist it is a very surreal experience to be sitting in the white house it was opposite a window where you could see the washington monument and i was opposite bill clinton sitting next to me hillary clinton on the other side al gore tony blair gordon brown that was at the height of the monaco lewinsky affair and it was interesting to be there to see the nuances of it all and i can say that you know mrs clinton behaved very well but she didn't look all that much at the president she tended to look more over the president's shoulder because there was a lot of emotional undertow going on at that time well later on these debates became much more general um the first general one we had was actually in italy in florence uh at which um i don't know about 10 or 11 i think center left leaders came uh one of those was mr joshbach and i remember mr josh ban didn't feel very much at home with the other center-left parties in in europe at that time or with the american democrats and he tended to be a rather isolated figure in the corner of the room who who looked i think with some condescension on these uh left-of-center parties which were being too reformist for his taste at that time since then um the whole thing has broadened even more president lula from brazil and becky from south africa um political leaders from new zealand australia and other places take part in these debates chile ricardo lagos and michelle barber they have been in these discussions too the reason i mention these things is that they've been very important for the elaboration of of new style social democratic thinking because um although the political leaders came to these um discussions also some six seven hundred policy specialists came each time and i feel a lot of the thinking on a global level about social and economic reform was carried on behind the scenes among the policy experts the leaders would always grandstand to their local nation national audiences whereas behind the scenes most of us were trying to get on with thinking about what a left-of-center party can aim for in the world today so reform of the welfare state reform the social protection how to make social protection compatible with an economically competitive society if you like the key issues of our time those were issues which were certainly focused on and elaborated in these discussions a second um difference between this book and previous books i've written is that i put a lot of jokes in this book some of these jokes are about tony blair some are about gordon brown some are about social welfare now when i've been to italy before i sometimes tried to tell jokes and nobody laughs at all because either they're british jokes or else they don't work in translation but at least i'll try i'll try a couple of jokes that essentially about social welfare and health which is some you know the main core of what i have to say this is a joke by the american um actor walter matau who says i went to see my doctor and he gave me only six months to live when i said that i couldn't pay his bill he gave me six months more well we would hope that would not happen in a european welfare system which is not fortunately as marketized as the american ones are here's another one from the german sorry the american comedian george burns he says talking to another person i took a thousand aspirins last night in order to kill myself and the other person says and what happened and george burns says after the first two i felt better well the background to the discussion of reform of welfare systems is really the massive changes sweeping through the world and if you ever wanted to know what third wave politics was all about it was about precisely the third way or simply a label for how you update left-of-center policies in the light of a world which is changing fundamentally before our very eyes and on a daily basis now in many countries the main issues facing welfare reform are practical issues when one comes to italy for example when you look at the struggles of the pro-d government the problems here are not so much knowing what to do as how to do it as how to carry out the practical reforms which anybody who looks at the italian economy can see it's not sustainable even in the median term reform of pensions reform of labor markets reform on some aspects of the state are certainly necessary most people i think would agree on that the problem is actually to implement those reforms but that's not what i'm talking about what i want to say is that we have to quite radically rethink the nature of the welfare state in a world which is dramatically changing what are the major changes well i think we know them quite well although it took a long time for academics like me to convince convince politicians to take them seriously we all know now i think that we live in a much more globalized world and that globalization is a pressing influence which we all have to adjust to but if you go back to the early blair clinton dialogues at that time for me it was very difficult to persuade any politicians to take the theme of globalization seriously it was actually even difficult in academic life because there are many who doubted that the world really is different from the past many people said well you look back 100 years the world was already globalized then what's the difference well there are fundamental differences and i think now the term globalization has become such an everyday term that you might think it's always been debated but really it's only when you go back 10 to 15 years that you find people even beginning to accept the importance of this and it is massive massively important what is globalization well it is primarily increasing interdependence many people think of globalization as just economic interdependence and of course that is true you know in a society like italy or the uk or the united states you face new global competition much more radical and thorough going than in the past but for me globalization is also cultural it's also political it involves most dimensions of our lives so for example if you take the the the problem of multiculturalism and the experience of migration and to be a migrant today is quite different from what it was a generation ago the main reason being that if you're a migrant if you're an immigrant you can keep in touch with people in the country from which you came or your relatives across the world on a day-to-day basis it doesn't matter if you're poor it doesn't matter if you're rich you're in a global network often of connections and that global network influences what you do as an individual if you take the wearing of the head scarf among his islamic communities for example wearing a headscarf for a woman today can no longer be an innocent act any woman anywhere in the world who wears a headscarf in an islamic community has some sense of the connection between the headscarf and massive global conflicts going on across the world so globalization is to some extent for me based on communications rather than the economy and we're all struggling to get to terms with what it means to to live in a society which has become more of a mosaic and a world which has become more of a mosaic than in the past the second fundamental change which is the backdrop to reform of the welfare state is the emergence of a new economy that was also really controversial in the mid 1990s when we started discussing it with politicians it is no longer controversial i think it's become generally accepted but it took a long while for this to be the case if you look at my country britain only about 30 years ago well over 40 percent of the population worked in manufacture or worked in agriculture something like 44 of the population worked in manufacture or agriculture today in britain that proportion is down to 14 only 14 15 work in agriculture and manufacture combined and it might even drop further you could say that manufacturer is actually tracking agriculture agriculture in some countries alone constituted for 40 percent of the labor force now it's down to two percent in some countries maybe manufacture will drop even further it's not mainly the result of china it's not mainly the result of india it's mainly a result of technological change um promoted by intensified economic um competition but it's fundamental to our lives because it means that well over eighty percent percent of the population have to work in knowledge based or service occupations very very different from the past so it's not surprising that education and the generalization of education reform of universities become so important in left-to-center politics against the background of that change the third big change which we focused on and is all of these changes are ongoing ones for us really was a different relationship between the individual and the state or the public community essentially populations today citizens today don't have have the kind of passive relationship to those who govern them that many that had in the past the impact of the internet as we know has been fundamental but this change goes back before the invention of the internet now you have populations of people who are more informed than in the past who want more participation than in the past who are not deferential to those in authority as they were in the past where the whole nature of citizenship really is becoming redefined and the ideal of a participatory society no longer seems as impossible as it did a generation ago people talk about the crisis of democracy probably rightly but plainly there are opportunities for new forms of democracy for new forms of local involvement and i would give the example of this congress as one expression of that because the point of this congress as i understand it is for people who are academic specialists to talk to a wider public and to have an informed debate about public policy issues so the welfare state and the economy more joint economy more generally reacting to pretty profound changes now you have two reactions to these changes excuse me when when you think about the future of the welfare state you have a large number of right-wing critics of welfare who are essentially hostile to the welfare state and who argue that in the face of these changes the welfare state should be either dismantled or radically reduced the reasons given for this are several different reasons really one is taxation many right-wing authors argue that only with tax reductions can especially european countries be competitive on a global level this view to me is manifestly false because if you look at the best performers in europe which have been the five or six scandinavian countries and some other countries like the netherlands austria to some extent the uk and spain over the past few years those have not been countries which have based their preeminence on tax reductions they've been countries which have found a way of reconciling competitiveness with the transformation of the welfare state so it's not true to say that low taxation is the solution to economic competitiveness although it may work in some circumstances for some countries um simplified taxation like a standard or flat tax may work especially in countries which have difficulties um actually getting taxation revenue flat taxes tend to work best in countries at relatively low levels of development where taxation is a problem where you don't have sufficient taxation really to be able to create a decent society flat taxes my view was certainly not the way forward for the more advanced industrial countries another theory of the right is that the welfare state creates dependency this has been very important theory in the anglo-saxon world um quite a range of authors have argued that the development of the welfare state is itself the reason for the underperformance of many of the core european economies and they've said that this is because the welfare state creates a mentality of dependency in which you become dependent on welfare handouts and you don't have the initiative or the enterprise which would be necessary to be more economically successful now there is a certain element of truth in this but to use it as a basis for an onslaught on the welfare system seems to me quite wrong it's certainly the case for example that if you have a country that depends too much on passive welfare benefits where you simply pay people to be out of work that is not an effective welfare system you must have more active policy to encourage people to get back into work but to use this as a critique of the existence of the welfare system seems to me ridiculous so many of these right-wing authors have spoken of the end of the welfare state somewhat perversely i also want to speak of the end of the welfare state i think we're living through a period of the end of the welfare state except i mean this in a positive rather than a negative sense when i speak of the end of the welfare state i mean the end of the traditional welfare state which we inherited from the post-second world war period and which many countries are finding it very hard to break away from what were the characteristics of the welfare state or the traditional welfare state well there were many of them but i'll just mention the three important ones first of all the traditional welfare state was essentially what in english um we call a safety net notion i presume it's probably the same in italian the traditional welfare state was essentially a collective insurance system where instead of being insured by private companies you're insured for social risks through the state which protects you through the transitions in your life the traditional welfare state was what one might call an after the event system of social protection by saying it's an after the event system of social protection i mean that the welfare system protected you after things went wrong so if you lose your job the welfare state will pay you unemployment benefits if your spouse leaves you the welfare state will step in to support you if you were when you get older the welfare state will pay you a pension essentially the welfare state comes along after things have happened and covers you for risks which it itself does not directly try to control that's why we'll call it a kind of collective insurance system or a kind of safety net system the underlying logic really of the welfare state second in the traditional welfare state what in english you'd call producer interests that is the interests of those employed in the welfare state tend to dominate those who actually are the clients of the welfare system good way of saying this in english anyway is to say this is doctor knows best mentality where you defer to professional judgment you go and see a doctor the doctor is a kind of august figure up there who tells you what you should do for your health or you go to the unemployment office you go kind of cap in hand to the unemployment office and the person there says well subject to various criteria we will support you there is very little scope given for citizen involvement for citizens power or for citizens choice in the traditional welfare system it's a kind of patriarchal system not only in the sense in which it presumed the traditional family of course presumed a certain position of women and men but patriarchal in the sense in which it was a top-down system of administration we have numerous studies that show how disqualifying the traditional welfare state was for those who wanted to use its services for example a study done in britain of people claiming unemployment benefits showed that when they went this is talking about the mid 1990s when people went to the unemployment office to claim benefits all they would ask you is they will ask you for information about when were you born what is your career history can you fill in this form can you fill in that form what was your previous salary they asked you virtually nothing about what your aspirations were about what you felt you were qualified to do about the reasons why you lost your previous job and so forth so it was a very unpersonalized kind of system which was disempowering really for the person who tried to use those agencies because it was a monopoly provider really of services so people using the welfare system often felt very inferior within that system and felt disempowered by that system if you're poor and you don't have much education when you confront a welfare agency it can be very disempowering for you in that sense and we know that contributed to certain amount of unemployment it would simply put people off using those services and it didn't tailor those services towards individual needs at all thirdly the third characteristic of the traditional welfare state is that it wasn't really an interventionist state it didn't look to actually change behavior in more technical language i would say it was not a generative welfare system lifestyle in particular was not seen as problematic the welfare state accepted existing lifestyles this was much more understandable forty years ago when lifestyles were pretty stable so if you go back to the position of men and women again for example there weren't that many women in the labor force 40 years ago most women when they got married gave up work and stayed in the home looking after children this was as true in britain as it was in italy or germany or france most men were the bread winners in the labor market there was a clear differentiation between roles between men and women so it made some sense and you had a stable kind of life career you you would work if you're a man until age 60 or 65 and then you would retire supported by the state well leave it we live in a world which is very different from this where there's much more flux and change in lifestyles and where if you consider the relationship between men and women for example this is now increasingly a negotiated relationship often men and women are both in the labor market they have to decide how best to look after children we know that decline in the birth rate in european countries quite closely bound up with the involvement of women in the labor force so very big changes here from the past and we can no longer have a welfare system which simply accepts lifestyle the traditional welfare state accepted lifestyle and worked around it did not try essentially to change it except maybe in the areas of education and to some extent health with physical training and that kind of thing now my argument is that we need a different welfare system today and that this welfare system is to some extent emerging before our eyes but we have the obligation to push it along and further these changes i think it's worth saying well this is perhaps not something you should call the welfare state any longer it's what i would prefer to call at least in a bit more sociological jargon a social investment state which operates in the context of a welfare society different from the past because investment in people's capacities well the very theme of this conference investment in human capital is central to the future evolution of welfare systems um because in in the newly emerging society we recognize the state cannot do everything so you're not just talking of welfare produced by the state you have much more role for third sector groups for voluntary groups for sometimes commercial organizations can provide effective welfare benefits you no longer have a such a simplified version of the state in the uk it was especially true that the state was a core influence over welfare many people think of britain as a kind of market driven society but actually the state has been much more centrally involved for us in welfare than it was in germany than it was in scandinavian it was in italy for example we have the most centralized system of health care in europe for example so for the uk certainly we have to break away from this but i think everywhere it's been recognized that welfare has to be provided in a more diverse way so excuse me there are two reasons why therefore i would question the term welfare state today one being as i said the need to invest ahead as it were in human capital therefore to create social investment state the other being that you need more diverse agencies to promote welfare than simply the influence of the state itself and one of the main things for welfare reform is actually reform of the state once state institutions are established quite difficult to reform them but we must reform them if welfare systems are to be more effective in a more globalized universalized um society and economy so what will be the characteristics of a newly emerging welfare system well again there are many of them but i'll just focus on three to relate them to the three characteristics of the traditional welfare state i discussed before first the newly emerging social investment state has to be much more preventative and interventionist than the traditional welfare state system was rather than just picking up things after the event we have to often try to prevent them before they actually happen partly because we're no longer in control of these events if we don't do this in a more rapidly changing world in which human capital becomes more important for a diversity of reasons if i can give one example of this take the area of health when the welfare state was invented um a large proportion of the diseases which were treated by the invention of medical care free medical care administered by the state were infectious diseases and the the problem was to control these and to treat those who fell ill from them now today the vast majority of killer diseases in in industrial countries are lifestyle related diseases they're chronic illnesses which come in some part from lifestyle patterns of course they come from other sources too but lifestyle makes an important impact on them so heart disease for example in many countries one of the main killer diseases lung problems lung cancer one of the main killer diseases you could go on through the list disease and ill health are much more closely today related to lifestyle than they were in the past and to resolve these issues or to improve public health we have to some to some degree intervene before the event otherwise we might not even actually 20 years down the line be able to deal with the problems which lifestyle change is causing if you take as an example in britain um brit there are very few respects in which britain leads the european union one is in terms of imprisonment britain has more people in prison than any other european country and the other is in terms of obesity and being overweight britain is the champion for prisons and a champion for obesity or being overweight but obesity or being overweight is now a generic european problem it's not just a british problem in britain you have over 20 percent of the population classified as obese but this is also becoming true in a range of other european countries too it's a global issue if you look at japan the japanese had the longest life span among the industrial countries largely because of traditional diet today obesity is rising like that among the younger generation in japan because of dietary changes because of smoking among the younger generation and because of lack of exercise among the younger generation if you look in the united states united states as anyone who's been there will know is the the world champion for obesity also the world champion for imprisonment i don't see there's much connection but nevertheless it is and it you know if you if you look at studies in the united states um they show that even diabetes 2 type 2 diabetes could effectively swamp the american health system about 20 years down the line because of the high proportion of people who are obese who are overweight a diabetes 2 is only one medical consequence of being substantially overweight heart disease again could be on the rise cancer is more common if you're overweight and a range of other diseases too so you couldn't for this kind of uh health problem um simply wait until people get ill and say oh well the hospital system will adopt absorb them because it will create complete crisis for the hospital system some way down the line so you must have more interventionist policy in the welfare system we also know that class differences in health are now more influenced by lifestyle than they are by poverty as such in in 40 years or so ago it was sheer poverty which explained why poorer people or big part the reason why poorer people lived short more short lives were more unhealthy than more affluent people today certainly in a society like britain it's no longer sheer poverty that explains the difference its differences in lifestyle its differences in level of smoking and its differences in levels of exercise that create the differences when you had a manufacturing economy many people who were non-affluent people actually still led active lives but when you have a service-based economy say people sitting on the checkout at a supermarket you no longer get everyday exercise from your work and so you have a sort of structural change there that affects poorer people but you also have just simply lifestyle decisions that are producing in the uk an expanding difference actually between the poor and the more affluent so you have to look at different mechanisms to change this if you gave people more money poorer people more money it wouldn't help it would actually probably make the division larger so you have to have education you're after other forms of intervention if you're going to reduce the health inequalities which you see in a country like britain second in the new form of welfare system um it should be much more client oriented rather than dominated by the state or dominated by producer interests we live in a society where people become accustomed to choice where choice is an empowering phenomenon we know that choice in the marketplace is is a problematic thing you can say sometimes you have too much choice over products people are driven too much by consumerism and so forth but nevertheless choice is a mechanism of the empowerment of people the choice for example to go to a range of places the choice to go to a range of shops is a real choice um my wife aliona sitting in the front row here um got me interested she's russian got me interested in russia in the soviet union what you didn't have with choice in the sense of which you do in a consumer economy and people had to exercise choice through other mechanisms where there wasn't the same kind of choice in markets as there are in western countries but it's it's impossible to have a society where you have choice and power in some areas and not in others so within the welfare system what we have to do is to empower people to democratize the welfare system to introduce choice in certainly in areas of health to introduce diversity in the health system and particularly to personalize welfare systems under more important than choice is really personalization so the story i mentioned to you where someone goes to the welfare agency and they simply ask bureaucratic questions nothing about the person themselves that's something which we have to consign to the past and if you've looked what's happened in the more advanced welfare systems in europe those welfare systems are now much more personalized in the new british system of unemployment for example they no longer work by simply asking people bureaucratic questions they have counsellors those people will inquire into a person's background capabilities will give them information about jobs available in the local area might continue to talk to them through the job search process and continue to talk them after they've got a job too personalization is just as crucial in education as it is in health for the future of the welfare system what we call in english anyway voice and choice that is the capability to have empowered clients and the capability to make discriminations or choices this is the future of of welfare provision in western societies thirdly and perhaps most importantly of all um lifestyle becomes a preeminent concern we're not used to dealing with lifestyle politics but many of the issues which confront us in the welfare system today are issues of lifestyle if you like they're no longer strictly scarcity issues the traditional welfare system was based upon avoidance of scarcity and control of risk in order to limit scarcity for example scarcity of medical provision in in contemporary societies many of our problems are to do with abundance they are to do with diversity of lifestyle rather than having a standardized lifestyle so in in many areas let's say in health as i mentioned but also for example in climate change many areas in addition to those you must have lifestyle change if you're going to resolve the questions at issue we know that climate change is fundamental source of anxiety for future generations we know that technology will probably make a difference to our ability to limit global warming but everyone can see that you will not be able to control climate change unless you have substantial lifestyle change too and that lifestyle change must be local national and global if it really is to effectively limit the impact of global warming on future generations and their possibilities so the question of how to achieve lifestyle change the question of freedom the question of incentives versus sanctions this is where a lot of the action is in modern welfare systems and i feel it's the other side of the coin of the discussion of happiness you know that happiness has become a major issue certainly in the anglo-saxon literature of economics trying to find a broader notion of welfare well we should have a broader notion of welfare i think not just oriented towards happiness but with positive life values the traditional welfare state was based upon avoidance of what you might call the bads the bads being falling ill getting unemployed and so forth a forward-looking welfare state must identify the goods must identify some positive life values which it's good for people to follow i call this positive welfare rather than the negative welfare of the traditional welfare state so when we're we're asking people to change their lifestyle to avoid the implications of climate change first of all we want to use incentives as far as possible rather than just punitive sanctions and second we want to say something about why this could lead to a better life rather than a worse one not just avoidance of risk but also why for example if you have a society where cars congest your cities less where you have more effective public transport where you do more exercise on a day-to-day basis where maybe you cycle rather than go in your car these things can be part of actually lifestyle benefits not just the avoidance of risk and it's this kind of area which we have to manage if i can go back rather from climate change to food and eating it's a very good way of demonstrating this and the problems if you're intervening in a society is this intruding on people's freedoms and how do you manage that well if you consider the issue of obesity being overweight first of all you don't want to stigmatize people who are overweight you don't want to shame them i think into changing their behavior so and you don't want to say look the government says you must do this you must do that so what do you do well i think it's very clear what you do first of all you have to target children increasingly a whole series of lifestyle disorders start very early on in life and we know these things are influenced by the activities of commercial companies for example food companies now target children as early as five or six years of age through internet sources whereby they try effectively to get children addicted to sweet foods they even offer often prizes for children who will start to consume their products early on surely this has to be regulated there is no big problem i think with saying that the the question of freedom does not apply so much to children because we want to create an effective future life for children and children who are addicted for example to sweet foods or children who become addicted in adulthood to other things you can hardly say they are free so far as adults go the limitation of the activities of the food companies uh control and regulation of food is still very very important in italy you're lucky because you still have quite a lot of traditional diet but in many countries you've actually lost completely a traditional diet so we know that you can put a lot of pressure on food companies to reduce the fat products in their food to reduce the salt products in their food to label foods in supermarkets connection with global warming because in the uk you now say where the food comes from so you can discriminate in terms of its impact on climate change in terms of what you buy there are a whole diversity of incentives that can be used and an awful lot of the action in modern societies is around these things you might say well people won't change their habits but actually they will not many people would have thought that you could even contemplate a smoking ban in public places in italy or in france i think if you look at the example of finland finland had one of the most unhealthy diets in europe 30 years ago with high levels of heart disease high levels of obesity premature death much of this was changed by active programs mainly informational educational programs some of them operating at a local level which transformed finnish patterns lifestyle patterns so today finland has one of the lowest levels of heart disease in europe rather than one of the highest levels so we know these things are possible but they're obviously difficult and they're not like traditional welfare issues well to finish if you put all these things together um i think you can defend the possibility of an effective european social model that is in europe we want to develop societies which are certainly economically efficient but also socially protective we will only do this if we're capable of innovation in the welfare system not just innovation in the economic system but i don't think we want to be like the united states we don't want to be a society which has two radical inequalities where we have these massive problems because the marketization of the health system you look at our main competitors china india and china particularly you have massive inequalities opening up in that country chinese government is actively interested in western welfare systems it has to be because it now has to look to try and limit those emerging inequalities so i think in europe we still have the possibility of pioneering a society which is of global interest where you find a reconciliation between the two great thematic issues of our age really competitiveness in a new marketplace where competitiveness is ratcheted up several degrees but a society of protection society which helps people through the crises of life and society which limits um over uh radical inequalities but we will only be able to do this if we go much further in welfare reform or at least in welfare thinking for the future than we have done up to the present thank you very much who's going to break the eyes i thought you were going to break the iron i'm uk you just need to be i'm very brutal but i want a brutal answer is that true that if you're jobless and dependent of your age and also migrants from other states from european and non-european states um i mean if these people declare that they're jobless and they can't make ends meet is that true that they can obtain immediately from the state housing facilities as well as all what they need to live on and a monthly subsidy which is a little bit more than what is strictly necessary to survive so um professor kittens if this is true then i dare say that it is going to be very difficult to overcome this situation and we also do have an extended welfare state in italy but it is not as extended as it is in the uk so after listening to your wonderful presentation uh maybe you can explain us now how it is possible to go into this transformation towards the um the other type of welfare state that he described yes thank you for the question um forgive me if i may not have fully understood it because um i'm not sure what you said before the microphone came on first of all let me say i'm not going to hold up the uk as a model for any other country to me the best performing countries in in europe and indeed in the world of the scandinavian countries because they've found a better mixture than we have of equality and competitiveness what you should be looking for is not comparing countries but comparing policies between different countries and seeing they can be instituted now we know that policies which are closer to the kind of policies that i'm suggesting um are possible to introduce um in any society if effective reforms are made for example one of the great principles in scandinavian countries and and other successful countries across the world is invest in children invest in children invest in women in italy neither of these things is effectively done because in italy you support far too many older people at the expense of younger people that means younger people are picking up all the insecurities and the anxieties um in in your society because you have effective debate divided labor market now if you look right at the bottom of the society what we know is that you can only support poorer people effectively if you have much more flexible welfare systems which are personalized to people's specific circumstance in the way i was describing now what we know is that those systems save money for the wider society you don't want people locked out of jobs when they could be in good jobs and that's what traditional welfare benefits do so you need to help people through processes of technological change in modern economies um you have about well as was discussed actually in a session this morning and i think we'll be discussed tomorrow you have about 15 percent of jobs that are destroyed every year and that job destruction is crucial for economic prosperity so the principle should be to help people through those jobs so the principle should be protect the worker not the job and that is the scandinavian principle now when you're dealing with very poor people say migrants it still applies that you want a much more flexible system because if you have a divided labor market migrants tend to be completely isolated from jobs that have any prospects in france for example you have fifty percent unemployment um in some uh poorer areas where there are high levels of migrants in the uk i'm not again i'm not holding up the uk as a marvelous model in the uk you have much higher levels of employment for migrant groups mainly because we've created lots of jobs in the uk 75 percent of the labor force in is in work in france it's 63 percent in germany 64 in italy of course you have a very big informal sector in italy i believe it's only about 52 about the same as in poland the key thing for an effective welfare system is having a high employment rate and one of the main changes that the people who are interested in welfare and the economy have made is don't think in terms of unemployment think in terms of employment because employment above above a decent minimum wage providing decent welfare measures is the way to have an effective mixture of competitiveness and um limiting social inequality um every country are problems of migration the main problems for britain are the same as for italy how to attract migrants because we need migrants in skilled jobs we need migrants who who bring in new attitudes and views to our society but it's very difficult for a european economy to absorb large numbers of unskilled people especially illegal migrants so limiting illegal migration is a crucial issue for all countries today and migration is obviously a positive phenomenon for many countries but you have to have a balance of migrants the more illegal migration there is the more difficult it is to stop that undermining the welfare system and dragging down the system of benefits i'm not sure if the answer the question because i wasn't completely sure exactly what the question was so forgive me is related to the institutional framework of this new prepositional welfare state i mean if we have to reconcile the growing presence of the welfare system and individual freedom and widen the possibilities of choice for individual citizens then we will have to think of the fact that many welfare activities which are nowadays directly managed by the state will have to be put in the hands of the civil society or organizations of the civil society rather than the government or the state per se well i agree with that in some part as i said i think um third sector groups especially in a more reflexive active society can be very important because you know you need to help people to help themselves in a modern society so we know that traditional ways of simply handing down even money to poorer groups doesn't help you if you're in a crime ridden area if there are no job opportunities and so forth so you do need activity at the local level one of the reasons why third sector groups voluntary groups can be so important in modern societies but i think you do need you know new style civil society groups i think like traditional church organizations traditional voluntary groups they're often not properly organized they're not systematic they're not transparent and they're not dynamic but we know that um modern social entrepreneurs can be all those things you can't transfer things to the third sector if you don't have the same criteria's demand of state organizations transparency effectiveness looking in the long term sufficient financing so those those conditions have to be satisfied but we know in a poorer area that if you simply transfer resources downwards they get dissipated so you must have local organization you must try to involve local people that's as true in africa as is in italy as it is in the uk on the other hand i wouldn't completely agree with you because i don't think the problem is simply to take things out of the hands of the state the problem is to transform the state itself and uh i think that that means de-bureaucratizing state institutions if possible giving more empowerment to the users of public services giving more information to the users of public services in health it means i think giving people the capacity to go elsewhere sometimes not just to be dependent on a monopoly provider or for older people for example we should be doing again what they do in scandinavia where you get a choice of of um providers of care in scandinavia's you have a voucher system um so you can choose who provides for you it provides a better service for people than if you have a monopoly provision in the hands of the state so it's a question of partly reforming the state not just on taking powers away from the state i think my name is vickery and i am an official of the european commission and i'm retired now i have two very short questions the first one what happens once we develop the system you have proposed what happens to the person who falls ill say because this person did not enact a healthy lifestyle this person ate too much or smoked too much i'm asking you this question because in the countries you're referring to in the scandinavian countries and which part of this has already become a reality there is a debate now as to whether a person who becomes ill because she or he got too fat well perhaps this person should pay for his or her medical care the state cannot pay for the consequences of a wrong lifestyle or or the fact that this person did not follow the guidelines provided by the community and that's my first question then i have a second one and doubtedly i mean i believe that a healthy and sober lifestyle cannot but be welcome however at the same time it seems to me that due to globalization were becoming increasingly more dependent one of the other and this means that europe say will no longer produce food in the future because food will be produced in the agricultural areas of other countries and food will be transported to europe by trucks or other means of transportation making use of fuel that maybe won't be as sober as the lifestyle we would like to enact this in terms of the global economy of the environment so this decision we have made to open up to become global i mean one way or the other we now have to adapt we have to change our lifestyle and the system is never ending in the sense that in 10 years we will have to do something more we will have to further limit our lifestyle following a model that i think yes just the question is what do you think i mean do you think we're going on forever with new and newer limitations and increasing soberness or do you believe that we're going to sort out everything with this change and then we will no longer have this problem thank you for those um two very good questions i didn't think they were as short as you said that they were originally going to be but the the issue of the issue of what happens when people adopt unhealthy lifestyle practices is is i think in one way a difficult issue another way or not difficult issue i think you must sustain collective provision if if you tailored all services to half our people lived healthy lifestyles you would get the breakdown of welfare systems altogether um that's what happens when you have private insurance private insurance will ask you questions like do you smoke and so forth and will adjust your payments accordingly you must sustain collective provision i think therefore you you can't go too much about against the principle that the welfare system should protect people irrespective of the lifestyles they lead on the other hand you know you want to use all the incentives you can to persuade people within that framework to actually adopt lifestyle change because if you smoke you know your chances of dying between age 40 and 50 are something like seven or eight times they are or ten times i think in some countries the rest of the population if you look at statistical studies smokers place an enormous burden on the rest of the welfare system some smokers say well we die young so therefore we save money but actually they don't because they could have gone on paying taxes for ages and if you look they you know they actually do constitute a burden on the health system there is no way of completely resolving these issues but we do need to try and find ways of encouraging people to live more responsible lifestyles smoking is a crucial aspect of this but so also a motor cars for example um you know why do we put up with so many deaths and on injuries from motor traffic every year do you know that more people have been killed since the second world war in car accidents that have been killed in both world wars together some um 40 million people have been killed in car accidents since the invention of the motor car why do we tolerate this well we tolerate it as a kind of bargain between individual mobility and freedom and acceptance of risk but i'm not sure that that will last indefinitely see i think there are all sorts of sort of interconnections between lifestyle and welfare which we're going to have to explore and try to maximize connections between them but i think starting with children is a safe principle the more the more you can persuade children not to adopt unhealthy eating habits early on the more you can persuade adolescents not to start smoking early these things will have a big impact on their real freedoms later in life but there is no single magic bullet solution you can have a lot of dilemmas around the intersection between these two things there are some things that we don't allow people to do for example we tend to be quite hostile to destructive drugs for example some of them anyway but there are many things we do allow people to do we should do like climb mountains or drive racing cars or whatever so there's never going to be an easy boundary between those things in terms of globe globalization and lifestyle well i mean we don't want to create a puritanical society so you must have a society that admits of capability of people to within certain limits do what they like and enjoy individual freedom freedoms but in the context of globalization you can see quite important connections as i said between eating habits and and climate change because if if if you do label all products in terms of where they come from and what their ecological footprint is what their carbon consumption consumption element is you might be able to persuade people to go back to more local diets if you have more local diets then of course you change the pattern of agriculture in europe and elsewhere um it's quite important that we limit the degree to which foodstuffs are transported around the world to satisfy taste which you might be able to um change in other ways but you you don't want a simple puritan outlook on these things so again it's very difficult around the edges to find the appropriate balance but we must do something to find that balance we must do something to make these changes otherwise we're simply deferring the consequences of our lifestyle for the next generation it's obvious that if we don't make changes that young people today will pick up the consequences of our inaction and that's surely not socially just or economically efficient either let me use my power position for making the last question okay you won't be very english okay i will ask the question in italian the target the main objective of a reform policy is that of conjugating economic competitiveness and social protection so this is the challenge of the third way that is having a competitive economy but guaranteeing the necessary social protection level which is typical of the european countries and you have quoted the scandinavian countries as an example however scandinavian countries are a very interesting example but it cannot be easily followed in other countries these are all small homogeneous countries which are pretty isolated with limited migration flows a shared political culture so in these countries that experiment was done and was successful but it does not mean that it will work in other countries in particular it cannot work perhaps in societies like ours that are large scientists with large migration flows strong interests different cultural and social situations so my question is the societies of continental europe like the british one are large societies which however are not large enough to come to terms with the impact of globalization in terms of a balance between competitiveness and protection but in your analysis you never mentioned a higher level of reform for the welfare state you didn't speak for instance of the role of the european union do you believe that we can have a british german french reaction to those challenges or is it no longer re or isn't it more realistic to think of tackling those challenges by transferring the problem of the new welfare to the european level sorry before i answer those some astute questions um could i say thank you to the audience for coming because i think it's quite amazing you get so many people to come and listen to a relatively dry topic like reform with wealth estate and i'd like to thank the translator for doing what seems to be an excellent job in mediating between me and the audience first of all um no society should seek to copy any other society that has to be a fundamental theme of reformist politics we know that if you try and copy other societies today's success is tomorrow's failure so many people thought japan was the model for us some while ago then they thought germany was the model for us now these are two problematic countries so you should never try and copy whole societies and for scandinavia the important thing is policy um and what kind of policies could be adapted elsewhere i think to me it's pretty plain that if you don't make a transformation of investment so that you invest more in children than than you do in older people or at least you you re-address that balance you will not have a sustainable society initially you will have a continuing low birth rate if you don't empower women more and provide more effective welfare measures to protect women in the north the non-sorry the non-orthodox um family settings the birth rate in italy will stay low you have all sorts of problems here it doesn't follow that we can all be scandinavians it's obviously easier to change a small country in principle than it is a large country i accept all of that but we have to look for best practice around the world we have to not only look for what is existing best practice but as i've been trying to argue we have to go ahead of that what i've been trying to argue is for a welfare system that doesn't exist anywhere that we that will be anticipatory in terms of new demands which are likely to face us so i don't want to exaggerate the degree to which one and certainly one don't want to copy any particular country you don't want to look for best practice policies in different countries and see how they can be adapted elsewhere you know if you look at for example labor market reform only those countries which have had active labor market policy which have had flexibility along with provision of security have been successful over the past 10 to 15 years so there's a pretty clear lesson there you might not be able to follow exactly the same welfare to work measures they have in scandinavian countries but nevertheless it's clearly relevant to other countries and what will happen in france hopefully is that you'll get reform of labor markets there which will go in that way the main problem for us in the uk is that we had thatcherite reforms of labor markets which meant rapid growth in inequality rapid growth and inequality in britain during the thatcherite period since 1997 we've managed to stabilize inequality and we've made a lot more investment in public services and in younger people than was possible before so far as the european union is concerned well i mean i wrote a whole book on this you know the book that i wrote called europe in the global age is specifically about the european social model and in europe today you have a diversity of social models most people think you have something like five social models because you have the nordic one the central european one mediterranean one anglo-saxon one and the model of east european countries trying to adapt to western-style welfare systems they're not all going to be the same we know that most countries in the european union will not release control of their fiscal resources and their fiscal control over their economies so welfare reform has to be done within a framework of the european union the lisbon agenda was an attempt to do that but we know it hasn't had as much purchase as one might have wanted but we do know that those countries which have been closest to fulfilling the lisbon criteria have plainly been the most successful countries over that period i don't think myself that transfer of greater resources to the european level is likely to be the answer to problems of european welfare systems a because it's not going to happen it's very unlikely that it will happen in the near future and b because it probably won't do the job if you don't have internal structural reform in the core countries which have not really experienced it fully enough that's germany france and italy you will not have improved social economic development of the european union as a whole so i think the european union should be used partly as a model for internal comparison for the internal stimulus for dialogue between countries not just a top-down thing from the commission to the countries themselves that's why for me it's important to have these debates to have these confrontations because europe can become a kind of learning machine for its member nations i think and that's what we should hope for for the future so again thanks very much thanks for your chairmanship and thanks everybody for coming you