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Fear of the Welfare State: How a Conservative Invention Became a Marxist Utopia

Even some otherwise well-informed people still grapple with myths and half-truths about the European welfare state, and what is sometimes labeled European socialism.

As an outside observer, one is easily frustrated by the way American mainstream media depicts European politics, or more specifically; how it deals with the concept of the Welfare state. This apparatus of misinformation would be awe-inspiring were it not such a threat to the dynamics of democracy. Even some otherwise well-informed people still grapple with myths and half-truths about the European welfare state, and what is sometimes labeled European socialism.

For many Europeans, it is mindboggling to hear American media refer to Greece as a failed welfare state. The tragic fate of this country has become a mantra-like warning among the neoconservatives. The truth is almost the opposite. Greece has been plagued by an epidemic of tax evasion, cronyism and corruption for so many years that many Greeks themselves refer to corruption as their national sport. Non-governmental organizations like Transparency International have pointed to these problems for years and their reports are widely available on the web. In other words, the people at the top were eminently corrupt, and consequently the rest of the population was far too skeptical to entrust the government with their money. To this, one should add military spending that was beyond what the country needed, excessive corporate welfare and the predatory interests of the global financiers effortlessly working their way into the Greek system, thanks to the aforementioned wildfire of corruption. And yes, as a small drop in this ocean of mismanagement, certain privileges and entitlements were enacted by the government.

Similar problems can be seen in countries like Spain, Portugal and Italy. Austerity measures in these fragile economies have been celebrated by many in the US as the only possible solution, but what they achieve in reality is ordinary citizens’ punishment and the true perpetrators’ impunity; bank bail outs and unfounded hope their future behavior will be more decent. Noam Chomsky has stated on several occasions that the policies of austerity make sense only if the goal is to dismantle the social contract. Similar arguments have been presented by economists at the European Commission and, more remarkably, by the chief economist at the International Monetary Fund, Olivier Blanchard. In June of 2013, he published a paper in which he states that he and his colleagues gravely misjudged the impact of austerity on European economies. For those who prefer raw science, a recently published study by Herndon, Ash and Pollin is a highly recommended read. It is called “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogan.”

But let’s have a more serious discussion for a moment and look at some welfare states that haven’t fallen prey to corruption and predatory banking. I might as well use the country where I live as an example, namely Sweden. In this socialist inferno, only 1.2 percent of the country’s GDP is spent on defense. We have to deal with seven different parties in the parliament (the interpretation of democracy is quite literal here). Inflation rates and the poverty rates are among the lowest in the world – and the minimum vacation is 5 weeks. Universal healthcare, strict food regulation and unarmed people everywhere. To further frustrate the libertarian and neoconservative narrative, I must add that Milton Friedman’s ideas are alive and well in this communistutopia. In 2013, Sweden was once again ranked as the second most innovative country in the world for the third time in a row, according to the 2013 Global Innovation Index. Corporate tax rates are so competitive that not even the Wall Street Journal could withhold its praise. In 2012, Transparency International ranked Sweden one of the most corruption-free countries in the world; fourth out of 176. All of this, while being one of the most extensive welfare states in the world.

The situation is similar in Denmark, Norway, the Netherlands, Finland, Switzerland, Canada, New Zealand, the UK and elsewhere. Not even the most conservative governments in these countries would dare to suggest the dismantling of the welfare state. In the past however, one famous attempt was made. Margaret Thatcher dared challenge the Keynesian so called Post-War Consensus in Britain. According to a newly released Downing Street document, Thatcher and her chancellor Sir Geoffrey Howe drew up a plan to massively reduce public services, introduce compulsory charges for schooling and take apart the National Health Service. The plan backfired and almost caused a cabinet riot, forcing Thatcher to distance herself from the document.

Given that right-wing rhetoric is often aimed at the welfare state, one could get the impression that welfare is equal to socialism. But historically speaking, even a shallow look at the conception of the welfare state is enough to conclude that it is by no means a socialist invention. In Germany, it was introduced by Otto von Bismarck, a rabid anti-socialist. In Sweden, the term for welfare (“Folkhemmet”) was actually coined by a far-right figure by the name of Rudolf Kjellén. As early as 1850, the idea of a welfare state was denounced by Karl Marx himself, who saw it as an attempt to destroy the revolutionary consciousness of the working class. In his Address of the Central Committee to the Communist League, he explained in great detail why thewelfare state contradicts the basic communist agenda. It puts a lid on the most acute grievances of the working class in order to prevent a popular uprising. Not to mention that it adheres to capitalist modes of production!

A false dichotomy is being presented in American politics, a choice between capitalism and socialism, as if there were no middle ground between these two solutions. In a truly democratic system, reality is never black and white, and hybrid systems of governing emerge dynamically. Hence, the welfare state is merely a compromise, and has nothing to do with traditional socialism. In Europe, for all intents and purposes, it has served as an ideological ceasefire.