An Unusually Inhospitable Environment for Reform
Three factors have proved decisive in the development of Western welfare states: the balance of power between business and labor, the organization of political institutions, and the nature and extent of racial and ethnic cleavages. Individually and in combination, these factors have determined whether social reformers have been able to build comprehensive welfare states. Where wage earners have been unified and well-organized; where labor, social-democratic, or socialist political parties have emerged to represent working-class voters; and where the state and party systems have been centralized--under these conditions, welfare-state building has proceeded apace. Absent these preconditions, social reformers have faced enormous collective action problems that have made only the most limited reforms politically feasible.
Seen from this perspective, the American political environment has been unusually inhospitable to social reformers. In the United States, workers have been weak and divided by racial and ethnic identities, business interests have been both powerful and resistant to reform, and the state and party systems have been highly decentralized. These factors have combined to create unusually high barriers for political movements that have wanted to use government to promote economic security, and have led to more market-conforming policies.
The role of class-based organizations in the development of Western welfare states is clear. The organization of business and labor, the resources that these two groups can bring to bear in political struggles, and the ways in which both have defined and pursued their interests have regularly influenced what governments have done to protect society from market forces. American unions' inability to organize a majority of wage earners--in particular, their failure