De-commodification

Pintelon (Reference Pintelon2012) writes that de-commodification remains a highly contested and debated concept in social policy. Many commentators have seen de-commodification as the central theoretical element in TTWC (for example, Room, Reference Room2000; Holden, Reference Holden2003). Esping-Andersen writes that, inspired by the contributions of Karl Polanyi, social rights are seen in terms of their capacity for ‘de-commodification’. The outstanding criterion for social rights must be the degree to which they permit people to make their living standards independent of pure market forces. It is in this sense that social rights diminish citizens’ status as ‘commodities’ (Reference Esping-Andersen1990: 3).

In his ‘re-specification of the welfare state’ (1990: 21), Esping-Andersen draws on T. H. Marshall. He writes that ‘Few can disagree with T. H. Marshall's (Reference Marshall1950) proposition that social citizenship constitutes the core idea of a welfare state. It must involve the granting of social rights.’ He continues that ‘If social rights are given the legal and practical status of property rights, if they are inviolable, and if they are granted on the basis of citizenship rather than performance, they will entail a de-commodification of the status of individuals vis-à-vis the market’ (1990: 21). He writes that de-commodification ‘occurs when a service is rendered as a matter of right, and when a person can maintain a livelihood without reliance on the market’ (ibid. 21–2). Finally, he writes that the minimal definition of de-commodification entails that ‘citizens can freely, and without potential loss of job, income, or general welfare, opt out of work when they themselves consider it necessary’ (ibid.: 23). Kleinman (Reference Kleinman2002: 30) comments that this is an astonishingly maximal definition: it is hard to imagine any welfare state in which it would be either desirable or feasible for citizens to opt out of work of their own volition without any loss of income or welfare. Hay and Wincott (Reference Hay and Wincott2012: 49) ask if any states have actually come close to satisfying such a demanding definition?

Esping-Andersen, then, appears to define de-commodification in a number of different ways (see below). However, the issue here is that he equates ‘de-commodification’ with Marshallian citizenship and social rights (Powell, Reference Powell2002). First, Marshall's (Reference Marshall1963: 74) imprecise definition of social citizenship involves a range ‘from the right to a modicum of economic welfare and security to the right to share to the full in the social heritage and to live the life of a civilised being according to the standards prevailing in the society’ (emphasis added). In other words, the maximalist equality element is at best one part of social citizenship that also involves a minimalist element. Moreover, Marshall appears to be less concerned about particular types of equality than Esping-Andersen (Reference Esping-Andersen1990), as Marshall (Reference Marshall1963: 73) writes that citizenship was the architect of legitimate inequality.

Second, Marshall viewed equality more in terms of equality of status associated with services rather than greater equality of income, as implicit in replacement ratios of Esping-Andersen's de-commodification scores. Third, citizenship is associated with a ‘progressive divorce between real and money incomes’ which leads to the ‘unified civilization which makes social inequalities acceptable . . . The advantages obtained by having a larger money income do not disappear but they are confined to a limited area of consumption’ (Marshall Reference Marshall1963: 125). De-commodification suggests that living standards should be independent of pure market forces. In contrast, Marshall argued that welfare should not be proportionate to the market. In statistical terms, de-commodification requires a zero correlation between market and welfare, while citizenship merely requires that the correlation is less than perfectly positive. For Marshall, citizenship and social class were ‘at war’, and citizenship rights restrict but do not replace the domain of the market. Fourth, Marshall did not consider that all services should be free or de-commodified. In short, Marshall is closer to Titmuss's (Reference Titmuss1974) industrial performance–achievement model than Esping-Andersen's de-commodification and Titmuss’ institutional–redistributive model (Powell, Reference Powell and Greer2009: 33–4). There are good reasons to accept a ‘soft’ rather than a ‘hard’ version of Marshall's social citizenship thesis, and of the equal welfare state thesis (Powell, Reference Powell1995, Reference Powell and Greer2009): E (equality) does not equal MC (Marshallian citizenship) (Powell, Reference Powell and Greer2009).

Esping-Andersen briefly discusses de-commodification in terms of Marx, Polanyi and basic income. For Marx, the commodification of labour power implied alienation (1990: 35). He cites Polanyi (Reference Polanyi1944) that the pre-industrial Speenhamland system of income security guaranteed a de facto social wage (ibid.: 36), adding that the Factory Acts provided a degree of de-commodification (ibid.: 44). Finally, he states that a highly advanced case would be where a social wage is paid to citizens regardless of cause (ibid.: 47). In short, Esping-Andersen appears to present rather different definitions and operationalisations of de-commodification (Huo et al., Reference Huo, Nelson and Stephens2008; Hay and Wincott, Reference Hay and Wincott2012).

Commentators point to the roots of de-commodification in Marx (for example, Huo et al., Reference Huo, Nelson and Stephens2008), Polanyi (for example, Holden, Reference Holden2003), or both (for example, Room, Reference Room2000; Pintelon, Reference Pintelon2012). Commentators tend to discuss the ‘young Marx’, such as the 1844 Manuscripts that focus on alienation and self-creation through work (for example, Room, Reference Room2000). However, this ignores the ‘locus classicus of Marx's treatment of distributive justice’ (Husami, Reference Husami1978: 31) found in the Critique of the Gotha Programme of 1875. Here Marx stresses that even in the ‘lower phase’ of a communist society (i.e. a ‘socialist society’), the principle of distributive justice is based on labour contribution or work. It is only in the ‘higher phase’ of a communist society that the principle becomes: ‘From each according to his ability, to each according to his needs.’ It follows that it would certainly be unrealistic to expect the de-commodification of labour in a capitalist society.

Dale (Reference Dale2010) points to the problems of ‘reading’ Polanyi. In particular, he argues that crucially Polanyi does not equate de-commodification with re-embedding or with socialism. According to Dale, in The Great Transformation (Reference Polanyi1957: 177, 231, 252), Polanyi argues that the de-commodification of money had already been largely realised with ‘the creation of deposits’, and that ‘social legislation, factory laws, unemployment insurance, and, above all, trade unions’ have as their purpose the removal of human labour ‘from the orbit of the market’. He believed that labour in Britain prior to 1834 was de-commodified, as it was in fascist Italy, and in the USA in the early 1940s.

Commentators point to broad and narrow conceptions of de-commodification, and suggest that Esping-Andersen at times conflates different types, but generally focuses on too narrow a concept, essentially on cash benefits as the means to the end of opting out of the labour market, which does not reflect the original Marx and Polanyi concept (for example, Room, Reference Room2000; Papadopoulos, Reference Papadopoulos2005; Vail, Reference Vail2010; Pintelon, Reference Pintelon2012). Pintelon (Reference Pintelon2012) contrasts ‘thin’ (‘opt-out’ of the labour market) and ‘broad’ definitions (relative dependence on market forces) of de-commodification, with the clearest example of an all-encompassing definition proposed by Vail (Reference Vail2010: 313): ‘de-commodification refers to any political, social, or cultural process that reduces the scope and influence of the market in everyday life’. Vail continues that the five processes of de-commodification are: boundary protection, enhanced public goods provision, de-commodified economic circuits, social protection and market transparency.

Pintelon (Reference Pintelon2012) argues that Esping-Andersen seems to mix both approaches (see also Huo et al., Reference Huo, Nelson and Stephens2008), referring to de-commodification as ‘the degree to which they permit people to make their living standards independent from pure market forces’ (Esping-Andersen, Reference Esping-Andersen1990: 3), which clearly encompasses more than opting-out of the labour market. He later refers to the ‘citizen's relative dependence from pure market forces’ (Esping-Andersen, Reference Esping-Andersen2000: 353).

The term can be broadened in a number of ways. First, some labour market institutions have a de-commodifying potential which can be termed ‘in-work de-commodification’ (Papadopoulos; Reference Papadopoulos2005, Pintelon, Reference Pintelon2012). Pintelon (Reference Pintelon2012) argues that the broad approach relates more clearly to Polanyi (Reference Polanyi1944) as he refers to de-commodification as broad processes of ‘socially embedding’ the labour market. Moreover, it takes stock of ‘functional equivalents’, where strong employment protection legislation is sometimes intrinsically linked with low unemployment benefits (for example, in Southern European welfare states). Few studies have incorporated measures of employment protection into Esping-Andersen's worlds of welfare (but see Powell and Barrientos, Reference Powell and Barrientos2004). These points have been recognised by Esping-Andersen (Reference Esping-Andersen1999: 122), who writes that ‘the package of regulations can be regarded as the labour market equivalent to social citizenship rights’ and ‘clearly, if we define de-commodification as a process of lessening individuals’ dependency on the pure cash nexus, labour market regulation must occupy central stage’ (2000: 358) (see Papadopoulos, Reference Papadopoulos2005; Pintelon, Reference Pintelon2012). Esping-Andersen also discusses Castles and Mitchell's (Reference Castles, Mitchell and Castles1993) ‘wage earner's welfare state’ in Australia, where strong and functionally equivalent welfare guarantees were implanted in the labour market via the wage arbitration system. There was little need for a welfare state because male full employment was de facto ‘full’, because earnings differences were highly compressed and because the employment relationship furnished general welfare guarantees, such as home-ownership and adequate pension income. He comments that, if valid, the argument is theoretically fundamental because it compels us to reconsider markets (Esping-Andersen, Reference Esping-Andersen1999: 89).

Second, de-commodification can be achieved through services (for example, Holden, Reference Holden2003). Offe (Reference Offe1984) argues that institutions such as hospitals and schools effectively become de-commodified when they are provided by the state. Vail (Reference Vail2010) writes that public goods are central to a de-commodification strategy. The neglect of welfare services in the TWWC has been a major criticism (Jensen, Reference Jensen2008; Stoy, Reference Stoy2014). Esping-Andersen (Reference Esping-Andersen1999: 46, 87) has admitted that regimes were too narrowly specified through income maintenance programmes. For example, the Dutch welfare state appears ‘social democratic’ in terms of income maintenance, but ‘conservative’ in terms of service delivery. Powell and Barrientos (Reference Powell and Barrientos2011: 79) write that services can be a major element in de-commodification (Marshall, Reference Marshall1963; Tawney, Reference Tawney1964; Le Grand, Reference Le Grand1982; Powell, Reference Powell1995, Reference Powell2002) through the ‘social wage’ or ‘strategy of equality’. For example, citizens in the UK and the USA with identical incomes face very different levels of de-commodification with respect to health care. In theory, it would be possible for a welfare state to provide cash transfers and no services, or services and no transfers. Esping-Andersen ignores the relationship between cash and kind, how different parts of the welfare state fit together. Moreover, different parts can be based on different principles and use different mechanisms. Furthermore, ignoring education as a major element of stratification within welfare states is a major gap (West and Nikolai, Reference West and Nikolai2013; see below).

Jensen (Reference Jensen2008) points out that there is little relationship between expenditures on transfers and services. However, Stoy (Reference Stoy2014) argues that the typology by Esping-Andersen applies to the worlds of transfers and to the worlds of welfare services. Jensen (Reference Jensen2008) argues that both de-commodification and de-familisation may be pursued through transfers and services, the former predominantly corresponds to transfers and the latter to services (Jensen, Reference Jensen2008: 156–8).

Third, Room (Reference Room2000) contrasts Esping-Andersen's narrow and ‘strangely one-dimensional’ ‘de-commodification-for-consumption’ with Marx and Polanyi's wider ‘de-commodification-for-self-development’. Room adds that this wider notion is consistent with Esping-Andersen's more recent interest in life-long learning, social investment and human capital. In his reply to Room's criticisms, Esping-Andersen (Reference Esping-Andersen2000) acknowledges that human self-development is increasingly integrated with labour market participation, and that this activation-based approach is also a key strategy in coping with emerging new social risks. Furthermore, he implies that this activation-based strategy of social protection cannot be effectively captured through the concept of de-commodification (Huo et al., Reference Huo, Nelson and Stephens2008).

Finally, it can be argued that Esping-Andersen misses the essentially political dimension of de-commodification. Pintelon (Reference Pintelon2012) argues that, for Polanyi, ‘de-commodification’ is linked with the ‘double movement’, referring to broad processes of ‘socially embedding’ the labour market. Similarly, Room (Reference Room2000: 348–9, fn) points out that ‘critical participation in society’ (political reform, including collective working-class action) stands alongside the physical insecurity of the worker at the heart of Polanyi's analysis of commodification, but this element is ignored in Esping-Andersen's measurement of de-commodification. In short, Esping-Andersen's de-commodification can be seen as unclearly defined, but broadly narrow and not drawing clearly from Marx or Polanyi.

Stratification

In Chapter 3, Esping-Andersen discusses three models, or ideal types, of stratification and solidarity that closely parallel the regime-types that were identified with respect to de-commodification. For Conservative social policy, the unifying theme is that traditional status relations must be retained for the sake of social integration (Reference Esping-Andersen1990: 58). Liberal social policy focuses on individual insurance in markets, with residual social assistance (ibid.: 61). Socialist social policy is associated with the universalism of the ‘People's Home’ (ibid.: 65).

However, this appears to reflect a rather different approach to de-commodification, where countries were scored against one objective. In the case of stratification, each cluster is examined against different objectives. It is not clear why there is one type of de-commodification (rather than, say, social democratic countries aiming for de-commodification, while Liberal countries aim for minimum standards) (see also Goodin et al., Reference Goodin, Headey, Muffels and Dirven1999).

Moreover, it can be argued that different sectors are based on different types of ‘equality’. For example, given its clear links with equality throughout the life course, it can be argued that education forms a crucial part of the welfare package (West and Nikolai, Reference West and Nikolai2013). Education is arguably based more on equality of opportunity rather than on equality of condition. While studies very broadly produce groupings similar to Esping-Andersen's worlds, there are some differences between the different stages of education (see West and Nikolai, Reference West and Nikolai2013). West and Nikolai (Reference West and Nikolai2013) found four clusters of EU countries for primary, secondary and tertiary education: Nordic, Continental, Mediterranean and English-speaking. This pattern is similar to that found by Beblavy et al. (Reference Beblavy, Thum and Veselkova2011), suggesting that the difference between the Continental and Mediterranean countries is more significant than indicated by Esping-Andersen (Reference Esping-Andersen1990).

Similarly, studies on health focus on equality of access and equality of outcome. While there is much variety in the findings of studies, some have pointed to the ‘Nordic paradox’, in that equality of health is not as high as may be expected in the social democratic Nordic countries (see Kim, Reference Kim2014).

Finally, the different types of equality in different policy areas appear to produce some varying patterns. For example, Beblavy et al. (Reference Beblavy, Thum and Veselkova2011) explored social stratification in selected OECD countries for two specific policy areas: education (pre-school, primary and secondary) and pensions. They found four clusters in the public system: stratification in education and pensions (for example, Germany), education stratification and pension equalisation (for example, Belgium), education equalisation and pension stratification (for example, Sweden) and equalisation in both areas (for example, the UK).

State and market in the formation of pension regimes

Esping-Andersen (Reference Esping-Andersen1990: chapter 4) discusses state and market, political power and cash nexus, or ‘politics against markets’ (Esping-Andersen, Reference Esping-Andersen1985). He writes that a particularly important element in the identification of welfare-state regimes will be related to the blend of publicly provided social rights and private initiative. In other words, regimes can be compared with respect to which essential human needs are relegated to private versus public responsibility. (Reference Esping-Andersen1990: 80). However, he focuses on ‘the interplay of public and private provision’ (Reference Esping-Andersen1990: 103), and tends to ignore the ‘Mixed Economy of Welfare’ (MEW) literature that differentiates provision, finance and regulation (for example, Goodin and Rein, Reference Goodin and Rein2001; Powell, Reference Powell2007; Powell and Barrientos, Reference Powell and Barrientos2011; Powell and Miller, forthcoming). For example, the regulatory functions of welfare states are largely ignored. A welfare state may pursue goals by means other than direct provision, such as rent control and specification of minimum standards (Powell, Reference Powell2007).

In short, the theoretical base does not appear to fit closely with the named authors; concepts are not fully justified; nor are the relationships between them. Esping-Andersen claims that the ‘salient features of welfare states’ are social rights/de-commodification; social stratification and the nexus of state and market (which are elaborated in chapters 2–4) (1990: 3–4), and that the essential criteria for defining welfare states have to do with the quality of social rights, social stratification and the relationship between state, market and family (ibid.: 29). However, elsewhere he writes that issues of de-commodification, social stratification and employment are keys to a welfare state's identity (ibid.: 2–3). It is not clear whether the criteria are independent or causally linked. It is claimed that the clustering of de-commodification and stratification is ‘strikingly parallel’ (ibid.: 69) or ‘very similar’ (ibid.: 77). However, ‘both social rights and social stratification are shaped by the nexus of state and market in the distribution system’ (ibid.: 4) and ‘the division of social protection between public and private provides the structural context for de-commodification, social rights and the stratificational nexus of welfare-state regimes’ (ibid.: 80). Later, Esping-Andersen (Reference Esping-Andersen1999: 75) adds that ‘the private–public mix was the principal analytical axis that underpinned the “three worlds” typology; the key defining dimensions were degree of de-commodification and modes of stratification or, if you wish, solidarities’ (Esping-Andersen, Reference Esping-Andersen1990). This implies that the public–private mix is the dominant dimension (or independent variable?), but most commentators have focused on de-commodification scores (Powell and Barrientos, Reference Powell and Barrientos2011: 77).

Social risks

He claims that the foundations of welfare regimes can be seen in terms of risk management: social policy means public management of social risks (Esping-Andersen, Reference Esping-Andersen1990: 36–7); social risks are the building blocks of welfare regimes (ibid.: 40); and that how risks are pooled defines, in effect, a welfare regime (ibid.: 33). Where the state absorbs risks, the satisfaction of need is both ‘defamilialized’ (taken out of the family) and ‘de-commodified’ (taken out of the market). He distinguishes three distinct models of welfare-state solidarity that reflect historically dominant constellations of collective political mobilisation (Esping-Andersen Reference Esping-Andersen1990): a residual approach which limits its aid to targeted (‘bad’) risk strata; a corporativist approach that pools risks by status membership; and a universalistic approach that is based on the idea of pooling all individual risks, bad or good, under one umbrella (ibid.: 40).

Welfare regimes

Esping-Andersen (Reference Esping-Andersen1999: 73) writes that the bases for typology construction are welfare regimes, not welfare states nor individual social policies. Some confusion may arise because the word ‘regime’ is often applied to all kinds of phenomena, such as ‘poverty regimes’, ‘pension regimes’ or ‘male bread-winner regimes’. Some criticisms of TWWC are, in a sense, irrelevant, because they are not addressing welfare regimes but individual programmes. However, as Powell and Barrientos (Reference Powell and Barrientos2011: 75) point out, he uses terms such as ‘pension regimes’ and ‘labour-market regimes’ and ‘policy regimes’ himself, albeit in inverted commas (for example, Esping-Andersen, Reference Esping-Andersen1990: 85, 142, 164). Moreover, Hay and Wincott (Reference Hay and Wincott2012: 37) point to the different labels used by commentators: worlds of welfare, regimes, types, clusters, social models, families of nations, welfare (state) regimes, social policy regimes, regime-types and regime-clusters. He now claims that a welfare regime can be defined as the combined, interdependent way in which welfare is produced and allocated between state, market and family. Welfare regimes must be identified much more systematically in terms of the inter-causal triad of state, market and family. (Esping-Andersen, Reference Esping-Andersen1990:. 35).

‘De-commodification reconsidered’

Esping-Andersen (Reference Esping-Andersen1999: 43) writes that the concept of de-commodification, originally derived from Polanyi (Reference Polanyi1944) and later developed by Offe (Reference Offe1984), is meant to capture the degree to which welfare states weaken the cash nexus by granting entitlements independent of market participation, and is one way of specifying Marshall's notion of social citizenship rights.

He acknowledges ‘the burgeoning feminist critique of “mainstream” male-centred welfare state theory’, but argues that ‘even when this critique is predominantly interested in the gender relations that are produced or reproduced by social policy, it inevitably leads us to reconsider the family’ (Esping-Andersen, Reference Esping-Andersen1990: 49). He continues that his objective is ‘not to debate with gender theories, but to understand the position of the (changing) family in the overall infrastructure of welfare production and consumption’ (ibid.: 50). He admits that the assumption that individuals, or their welfare acquisitions, are already commodified has guided much subsequent criticism. While it may adequately describe the relationship between welfare states and the standard, full-career male worker, it is not easily applicable to women considering that their economic role is often non-commodified or at least only partially commodified. He revisits welfare regimes through the analytical lens of the family, admitting that welfare-state regimes were too narrowly specified through the duality of state and market, and through the lens of the standard male production worker (ibid.: 44). He writes that the concept of de-familialisation parallels the concept of de-commodification (p. 51) and the ‘lack of systematic attention to households is painfully evident’ in TWWC: ‘It starts out by defining welfare regimes as the interaction of state, market, and family and subsequently pays hardly any notice to the latter’ (ibid.: 71, fn).

Feminist critics have pointed out the neglect of gender in TWWC, the focus on the family rather than on gender per se, and the inaccurate definition and operationalisation of defamilisation in SFPE (for example, Orloff, Reference Orloff1993, Reference Orloff2009; Bambra, Reference Bambra2006b). For example, Bambra (Reference Bambra2006b) argues that Esping-Andersen (Reference Esping-Andersen1999) inaccurately defined and operationalised the term as the extent to which welfare states support the family rather than the extent to which welfare states facilitate women's autonomy and independence, which closely matches Esping-Andersen's (Reference Esping-Andersen1990) original ‘androgynous’ three worlds of welfare typology. Similarly, Orloff (Reference Orloff2009: 320, fn) states that Esping-Andersen did not acknowledge the source of the term, and the radical edge of the concept, linked to relations of dominance and dependency in families, was blunted in his usage. However, the term has different meanings (and spellings) (see, for example, Kröger Reference Kröger2011); not all contributions use the term (for example, Orloff, Reference Orloff1993); and Esping-Andersen (Reference Esping-Andersen1999) does cite at least some of his feminist critics (including Orloff, Reference Orloff1993).

‘Comparative welfare regimes re-examined’

Esping-Andersen (Reference Esping-Andersen1999: 81) argues that an alternative way to classify welfare regimes would be to pinpoint their dominant approach to managing social risks within labour markets (regulatory and non-regulatory approaches), the state (residual, universalist and social insurance models) and the family (whether families are meant to be the primary locus of welfare). This approach gives the following schematic nation classification (indicating the three broadly accepted archetypal ‘three world’ nations, and ‘modal’ examples from Table 5.4):

• • Labour market regulation: little regulation (for example, United States); medium regulation (for example, Sweden); and strong regulation (for example, Germany).

• • Welfare states: residual (for example, United States); universalist (for example, Sweden); and social insurance (for example, Germany).

• • Families: familialist: (for example, Germany) and non-familialist (for example, Sweden and the United States).

However, this appears a less clear solution, as it is not clear how these dominant approaches fit together, resulting in two triads and one dyad, with one group containing Sweden and the United States (non-familialist) and another group (medium regulation) containing a seemingly strange mix of Japan, Ireland, the Netherlands and Sweden.

Esping-Andersen now considers that ‘income-transfer programmes capture but one side of the welfare state. The real essence of the social democratic (or the conservative) welfare states lies not so much in their de-commodifying income-maintenance guarantees as in their approach to services and sponsoring women's careers’ (Reference Esping-Andersen1990: 88). However, after exploring the case for a three or four world solution, he concludes that it is ‘inescapably true’ that Japan, like Australia and Southern Europe, manifests features that are not easily compatible with a simple trichotomy of welfare regimes. However, on the ground of analytical parsimony, neither Japan nor the Antipodes warrant additional regimes. The peculiarities of these cases are variations within a distinct overall logic, not the foundations of a wholly different logic per se. He continues that the case for a Southern Europe regime depends ultimately on the centrality of families, which was ‘the weak link in the original “three worlds” model’ (ibid.: 92). He concludes that a simple ‘three worlds’ typology may suffice for most of his purposes (ibid.: 94).