Interview with Borja Barragué
Maciej Szlinder: As a researcher you are dealing with the problem of distinguishing different welfare regimes. Can you describe the main models?
Borja Barragué: According to Gosta Esping-Andersen’s traditional analysis there are 3 big models of welfare regimes: Scandinavian, continental and Anglo-saxon. The continental welfare regime is based on guaranteeing security during the periods of lack of income connected with ensuring us against a certain insecurities or accidents.
Scandinavian welfare states sought something different, which is ensuring that income inequalities will not be too large for a part of the society not to feel excluded.
In case of the Anglo-saxon countries – it is debatable that they even have a welfare state. They mainly guarantee you some property rights.
Then, in some analyses, a fourth model of Mediterranean welfare is incorporated, which is like a continental model but with much less benefits.. Almost all transfers are based on previous contributions, but if you have no contributions there is basically nothing.
What are the factors that made the development of the welfare states possible?
The explanation of why we had welfare states, why we had the social situation where the son of the counsellor of the company and the son of an unskilled worker went to the same school, went to the same university is base on three elements. The first is shocks in capital basically as a result of the two world wars. The second is a high birth rate. And the third is very high growth rate, which is connected with the reconstruction, that took place after the Second World War.
What kind of egalitarianism is realized by the different welfare states?
Basically we have to models of egalitarianism. First, is the model of luck egalitarianism represented by Dworkin. In this view all of the inequalities that are the effect of human decisions are justified, and those that are caused by some external factors, are not. The state should operate as a company that protects us against the risks of these latter situations. In that model we pay smaller taxes, and transfers are directed only towards those people who suffered some event they are completely not responsible for (eg. being hit by a car while crossing the street). The goal of taxation is to compensate for the bad luck, not to redistribute. If you’re disabled and because of that you are involuntarily unemployed, then the welfare state will help you. But it’s not to decrease the inequalities of the outcome.
And what is the second model?
The second model is relational egalitarianism, represented by Elizabeth Anderson. In her view to create a society in which everyone lives well it is not necessary to compensate. The objectives are to predistribute not only economic resources but also positions within the society, and to do it ex ante, not ex post. Not only as the compensation at the end of the process but at the beginning.
If you limit the action of the welfare state to equalization of resources ex post, then the means of public policy tend to do so by transferring income from one population group to another. This is possible and not very problematic when you have a lot of economic growth. The epoch in which the welfare state was created had 2 elements: greater economic growth and the popular idea of tthe distributive justice that fundamentally understood that the goal of the welfare state was to redistribute from some groups of the population to others.
Unfortunately in the nearest future the economic growth will be lower than in the “golden age”. And you need economic growth to redistribute.
This is exactly one of the problems with Piketty. He assumes that the rate of growth is somehow externally given. When we think that we have to redistribute growth, and the redistribution is dependent on growth we forget that the very growth is determined by the redistribution and predistribution. It’s more like the capital/labor relation (influnced for example by the power of trade unions) that is the independent variable, and the growth is the dependent variable. In other words, the economic growth is indogenuous, not exogenuous. Piketty seems to be to much techno-deterministic and blind to the fundamental power relations and class struggle, which is central for the arguments that he is a neoclassic economist.
In a paper written by Piketty, Saez and Stantcheva they analyse several potential causes of rising income inequality. They observe that skill-biased technical change models are not grasping everything because they are ignoring 2 elements that were important in increasing of inequalities since 70. & 80. The first are changes in political institutions, so called conservative turn. And the second is that trade unions, which were very strong after the Second World War, became much weaker after 80. So Piketty doesn’t completely ignore the political aspect of the story.
What about his proposals for change in the tax system?
I think that we should go back to tax systems similar to those that we had in the golden age of welfare state. The evidence that we have is that people at the top of income distribution are very sensitive to marginal taxes in this way that, when we lower to much the marginal tax rates from income from labourr they are engaging in rent-seeking. So bigger taxes are not only more just but also more efficient.
But besides looking for the fiscal solution proposed by Piketty like global tax etc. We should put some new instruments in the basket. We especially need some tools that try to narrow the influence of the labour markets in principle. And here is probably where at least one republican vision of distributive justice find its natural way demanding something like basic income.
You seem to be critical to the Philippe Van Parijs way of defending basic income, why?
I think the republican justification is better. Philippe Van Parijs assumes that we have more people looking for a job than there are available jobs. And those who are working, are de facto appropriating scarce resources. So we need to pay a kind of compensation for those that couldn’t get the job. In tis view jobs are so are comparable with the air, the sea etc.
I think it’s better to understand basic income as the way to introduce certain, important changes in the distribution of income so that the position of the two agents in the labour relations is balanced, so that one part doesn’t have the ability to dominate the other. You have the possibility to leave this relationship, because your position outside the labour market is more or less guaranteed. Outside the labour market there is a public policy that gives you at least some security and at a time when, as we said, it is not very real to think that we are going to have a labour market that is as inclusive as it was in the past.
But why the latter justification is better?
Apart from some philosophical aspects, it is better from the practical point of view. It’s much more intuitive than trying to explain people that jobs are really like air or like the sea or like beaches. If you are talking with trained philosophers you can use the Van Parijs approach, because he is really a very sophisticated guy and his arguments are structured in a convincing manner. But if you want to make a public policy telling that actually jobs are like the sea is very counter-intuitive. It seems to me that when entering the field of practical politics and not politics in the most abstract sense of political philosophy the republican justification is the best alternative that opens the possibilities that some important political party would buy the proposal.