Neo-Liberalism And Collectivism In Social Protection
The focus of this essay is to examine neo-liberalism and collectivism as two distinct approaches to social security. This will be explored by understanding what the term ‘neo-liberalism’ and ‘collectivism’ is and how they contribute to social security; outlining the characteristics of each approach; demonstrating how they have impacted on social protection systems in the UK.
Firstly, it is important to understand what is meant by the term ‘neo-liberalism’. The concept of ‘Neo-Liberalism’ during the past twenty years, has become quite widespread in some political and academic debates. Several authors have even suggested that ‘we live in an age of neoliberalism’. Neoliberalism is, under this view, thought of as an entirely new ‘paradigm‟ for economic theory and policy-making ideology behind the most recent stage in the development of capitalist society. As the dominant ideology shaping our world today‟. Neoliberalism wields, according to Munck has great power over contemporary debates concerning reforms of international trade and the public sector. One is forced, basically either to take up a position against neoliberal reforms, or else contribute to their diffusion and entrenchment. The worsening distribution of income and slower economic growth has resulted from neoliberalism weakening social security’s future liability. The prediction of a future ‘crisis’ for social security is based on the assumption of continued antiworker neoliberal policies and neoliberal policy proposals which have provided a rationale for redistributing tax burdens away from the rich and further promoting the neoliberal agenda.
Once exploring how collectivism contributes to social security it is important to define what ‘collectivism’ actually means. According to Marshal et al he defined collectivism as ‘universal participation in social security.’ He argued that in the so-called welfare states, economically active citizens were directed to join and pay tax contributions to fund social programs that catered for those in need ranging from old age retirement, disability, sickness, unemployment and maternity. This requirement is embodied in the collectivist belief that those who were economically productive should support those in need. The collectivist approach to social security gradually displaced the individualism of the 19th century, by the 1950s, collectivist ideas dominated social security. Further to this, social assistance programs continued to play an important role in income protection and social security’s commitment to collectivism was accepted by both left and right wing political parties.
The term social security refers to a variety of statutory income maintenance, health care and other programs. In most countries, it is known to provide programmes which provide income protection through social insurance, social assistance and social allowances. The identifying characteristics of neoliberalism are expansive and diverse. It can be identified as Harvey (2005) states that economic practices that proposes human wellbeing can be best advanced by freedoms and skills within an institutional framework characterised by free markets and free trade’. These ideas appear fundamental to unregulated markets, limited state power within the states and an appropriate legal framework for neoliberal practices.
More essential characteristics of neo-liberalism include the free flow of capital and labour markets with open borders as capital requires cheap labour in the form of immigrants. Such is the case with outsourcing labour, states with less democratic and human rights can hinder the accumulation of capital based on exploitation. In addition to this, within industrialised countries the main points are concerns revolved around policies that are known to be associated with the ‘US’ model of neoliberalism which involves deregulation of financial markets, cutting top rates of tax for wealthy earners and privatisation. Another identifying characteristic can be linked to ‘economic restructuring’ using repressive means. This has been associated with the US neoliberal project, manifesting itself through the cold war in opposition to centralised planning and Marxism state planning.
In contrast, it is important to consider how neo-liberalism and collectivism have had an impact on social security systems. With regards to neo-liberalism, in the United States, neoliberalism’s government policies include monetary policy, public policy and regressive tax policy. This strategy involves cutting wages and benefits, using low cost labour board and using part time and temporary workers. The public debate about social security focuses on the longevity and trust fund balances. Neoliberalism has adversely affected not only workers, but also finances and future prospects for Social Security. In particular, the worsening distribution of income, and slower economic growth have weakened Social Security’s finances and prospects. Also, the prediction of a future ‘crisis’ for Social Security is based on the continued assumption of antiworker neoliberal policies.
In addition to this, a series of policy developments in the areas of health and labour have mainly promoted a neoliberal agenda that affects the lives of people with a disability causing in many cases material deprivation, insecurity and stigmatisation. The combination of a continuing emphasis on reducing benefits and the existence of high unemployment has led many disabled people into poverty. Within recent austerity measures, in the United States, Europe and Australia, people relying on benefits have been particularly hit as healthcare and unemployment benefits have been reduced due to budget shortfalls.
In contrast, collectivism has made an impact on social security as improvements to employment rights were made alongside a commitment to flexible labour markets. The actions that were taken included the UK opt out in 2007 from the EU of fundamental rights, which have granted new powers to the European Court of Justice to protect social and employment rights. Beveridge had strong commitments to the free market believing that the state intervention should be kept to a minimum promoting maximum of freedom and therefore political autonomy. Beveridge was a reluctant collectivist which he intended his recommendations for the welfare state to be a safety net for those who would need it the most believing in limiting the role of the government. He believed that the overall cost of medical care would decrease as people became healthier hence needing less treatment.
In conclusion, it is evident that neoliberalism and collectivism have impacted on social security systems in many ways. It is important to consider that neoliberalism was created to expand economic growth during war. One of the main concerns of neoliberal policy is the inequality of distribution of wealth which creates a gap between the working and the rich class. As the economy expands with neoliberalism, the middle class start finding it more difficult to attain what was free, before making them have to work twice as hard with less income.
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