Regionalism and Global Economic Integration: Europe, Asia, and the Americas

By William D. Coleman; Geoffrey R. D. Underhill | Go to book overview

5

‘Subversive liberalism’

Market integration, globalization and West European welfare states

Martin Rhodes

INTRODUCTION

This chapter considers the issue of European state autonomy in the social domain by examining the past, present and prospective influence of European integration and ‘globalization’ on national systems of social policy and welfare. The specific processes considered are the attempted creation of a European ‘social’ area; the completion of the internal market and, potentially, monetary union; the competitive effects of trade liberalization and the impact on policy autonomy of greater international capital mobility. If national social policies are being influenced increasingly by European Union (legislation, regulation and wider economic integration) and more constrained by the need to conform with the expectations and prejudices of international financial markets, then what are the implications for the dynamics of national welfare state development? The following analysis focuses on five major, interrelated questions: what is the relationship between regional economic integration and global trends, and between these two phenomena and domestic welfare state problems; do regional integration and globalization have independent effects; do they interact with one another to hasten convergence trends; are they strong enough to erode national specificities; and is there evidence of convergence on any particular model?

SUBVERSIVE LIBERALISM AND THE WELFARE STATE

Welfare states in Western Europe are extremely diverse and each is responding in its own way to the problems of cost-containment created by demographic pressures, life-cycle changes, fiscal strains and, arguably, by the transition from a Fordist to a post-Fordist economy. But at the same time, the scope for different responses to these problems is increasingly limited: by the need to avoid an excessive fiscal burden on the middle classes (a domestic constraint) and by increasing interdependence (an international constraint). This interdependence is the result less of new, pan-European structures than of the combined effects of regional economic integration (the creation of a single European market and the deflationary impact of moves towards

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