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Mainstream, VOL LVIII No 40, New Delhi, September 19, 2020

Revisiting Foundations of Welfare State during Current Pandemic Period: A Normative Analysis for India | Manish Sharma, Akhilesh Mishra

Friday 18 September 2020

by Manish Sharma, Akhilesh Mishra

When society places hundreds of proletarians in such a position that they inevitably meet a too early and an unnatural death, one which is quite as much a death by violence as that by the sword or bullet; when it deprives thousands of the necessaries of life, places them under conditions in which they cannot live — forces them, through the strong arm of the law, to remain in such conditions until that death ensues which is the inevitable consequence — knows that these thousands of victims must perish, and yet permits these conditions to remain, its deed is murder. (FrederickEngels, 1987)

Introduction                             

The world has witnessed different formats of economic order in last two centuries. In initial period of nineteenth century, the world economic order, which was governed by the doctrine of mercantilism was later enmeshed with the philosophy of capitalism and unleashed by the European colonial powers. Subsequently, afflicted with the grave menace of great economic depression, the dominant powers sought an alternative model in the form of ‘welfare state’ to get rid of the burgeoning economic crisis of the capitalist era. Moreover, the USA and USSR sustained their hegemony in the post-Second World War period advancing their ideological contours till the nineties of the last century.

However, in later stage, a group of newly independent nations assembled under the banner of Non Allied Movement (NAM) and tried to make an equidistance from the capitalist and socialist blocks principally but owing to; cross border and ethnic disputes, weak political structure (authoritarian ruler/ states suppressed the economic and political rights of their citizens in the name of national pride through their military powers) and economic compulsion. Ultimately they ended with siding with one or other blocks. Simulataneously world witnessed some successful economic models such as South East Asian Economies ‘Tiger’ and in many parts of the world, using global finance capital. However prosperity in these countries were short lived with some exceptions like Japan, South Korea, Singapore, Malaysia and Indonesia. Noticeably, a large section of the people were lifted from the abject poverty in many of these nations through applying the hybrid models within the authoritarian states (lifting restrictions on the inflow of global finance, capital and technology in the export orientation industries: while state invested heavily on the augmentations of the quantity and quality of the human resource pertinently needed for the MNC and Global Supply Chains). The comparative advantages started vaporizing for the MNCs on account of aging populations, rising cost of wages owing to demand for the strengthening of the democratic structure. However, China sustained with double digit growth, under the regime of ‘Deng Xiaoping’ as an exception applying peculiar model ‘socialism of Chinese character’ .        

Subsequently , In the post-90 scenario, when the world passed through major changes in the wake of disintegration of Soviet Union and the Gulf crisis, a new world economic order emerged marked by liberalisation, privatisation and globalisation, and the lead in this direction was made by USA often challenged by China . Though China is a non-democratic, non- capitalist country, but it gained economic power using the democratic tools of the multilateral institutions and the policies of globalization. But soon after the spread of the current pandemic of COVID -19, the world economic order is shifting towards adhering the norm of welfare state, the obvious reasons being the market-economies of the west viz; Italy, France, Britain and USA failed miserably to combat the pandemic effectively. On the other hand, Russia, China, Vietnam, Newzeland and other countries are able to mitigate the cases at a certain level of satisfaction. Besides, the impact of traditional drivers of development such as labour, investment and productivity, are also being replaced by populism, protectionism and automation, giving importance to the state to play the role of disrupters.

This paper studies the concept and importance of welfare state in formulating an international economic order, i.e. an institutional arrangement of international rules which emerge from negative experiences of the current pandemic that inflict severe hardship of life and livelihood among the people of various countries.

 Background of Welfare State

Normally it is contemplated that the concept of welfare state is western and modern one but its background goes back to Shantiparva episode of Mahabharata to Kautilyas Saptang theory in India to Roman emperors with different formats of social welfare. But without going into these historical myths or reality, we would like to focus on the time period of last two centuries when a number of socialist and communist philosophers emphasised the discourse on need and significance of welfare state in a very significant and logical manner.

Usually what we understand, welfare state is a form of government in which the state protects and promotes the economic and social well-being of the citizens, based upon the principles of equal opportunity, equitable distribution of wealth, and public responsibility for citizens to ensure better living standard of each and every citizen of the society. The tools to maintain equity, equality, justice may be price regulation (such price policy, PDS, concession and rebates in different products and services), labour policies, regulation of the work environment, wage policies, housing policies, fiscal policies, DBT policies and environmental policies so on and so forth

India as a Welfare State

Modern concept of welfare state started in colonial India when Indian got chance to know the contemporary political discourse and thought of west (European countries specially) while interacting with them or visiting these countries for higher studies consequently the then political leaders and thinkers of India envisaged a welfare state in colonial India to strive for the well being of the Indian masses who were struggling for a dignified life.

Subhas Chandra Bose in his famous presidential speech at the Haripura Congress in February 1938 declared that the national state “on the advice of a Planning Commission” would adopt “a comprehensive scheme for gradually socializing our entire agricultural and industrial system in the sphere of both production and appropriation.”(Chatterjee Parth ,1993). Even Gandhian philosophy of Ramrajaya revolves around the concept of social and economic equality and a refusal to accept economic privileges, as he never prefer happiness to economic prosperity and physical pleasure alone. His concept of the welfare society was totally opposed to the utilitarian concept. Though “After Independence the economic beginning of India is made through Fabian Socialism that emerged from ideas and approaches of utilitarianism, empiricism and classical economy” (Karthik 1995). Later on the constitution of India laid the foundation for the interventionist state in India with principle of liberty and equality were underscored. Article 39 of Indian constitution assure “equal justice on the basis of equal opportunity.” The preamble of the Constitution enumerates the goals of equality, justice and liberty. Initiatives such as land reforms and tenancy reforms became important rudiments in Dr. Ambedkar’s scheme of the welfare state and it continued in different plans and policies and in dimensions till nineties. Post ninety scenario had witnessed the change in perceptions, concepts, and role of state welfare measures in India either due to political philosophy of the government or under the pressure of international organistions and agencies.

However, again when the current pandemic hit the country in the last week of January, 2020 it has been felt all over the world that there is widespread recognition of it and that increased welfare spending is critical not just to contain the fallout from the pandemic, but also to effectively combat it.

Welfare State Revisiting Foundations

Since the 1980s, two troublesome trends have affected the world economy. The first is the  widespread increase in income inequality and second one is the weakening of concept and role of welfare state in the world resulting pitiable situation for the marginalised and destitute society because voice of these groups had been lost in the argument of market incentives and work culture.

But during last economic recession 2008 in general and during this pandemic period in particular, role of state has been emerged as a prominent reason behind survival of economy and the recovery from the crisis as it is witnessed for Vietnam, China and other countries. Further, this has been enhanced during periods of crisis, when the reduction of welfare spending is part of the austerity policies put in place to manage the crises.

Relevance of Welfare State in Current Pandemic Situation

Now the question arises, whether democracy is an essential condition for welfare state or state with enough fiscal capacity can ensure more for democratic society in the long run. Certainly, empirical studies are inconclusive in this regards as relation could be unidirectional or bidirectional depending on the many factors such as structure, conduct, resilience capacity of the society and faith in the government/ leaders. This question has become vital as of now as in the post covid scenario, owing to asymmetric movement in the public policy making and instruments of execution of those policies would create an imbalance and mistrust among the institutions dealing with the smooth implementation of the neoliberal world economic order. To finance the doles and stimulus given at the time of Covid, states are left with little options but to pursue the conservative economic policies (Protectionist approach towards the movement of goods, services, finance and people ) that may increase the discretionary power of the states regarding use of scare resources . The extent and future of the welfare states may depend on the state’s capacity to provide public and merit goods to their citizens, the collaborative and coordinated efforts amongst the nations with respect to cross border movements of the goods, services and people, and finally credibility and capability of the institutions such as UN, IMF, World Bank, WTO and other organizations and mechanisms to deal with the conflict and cooperation amongst the nations. If war mongering and mistrust amongst the nations continues, it would be the common man and people of lower economic and social strata who will suffer the most. Identity questions become more important in the uncertain and unstable global world while, prosperity of the people and humanity requires more stable and certain world.  To ensure maximum level of equity among the all the citizens ,a welfare state plays a crucial role specially during a difficult situation like pandemic as it protects people from disease, poverty ,starvation, immobilization of people and overall misery

Moreover, during currant crises , when market mechanism is failed to provide minimum health, role of corona warriors whither they are police personnel , or medical and para medical personnel all of them proved their worth by ensuring timely delivery of essentials and basic support to the common man at one hand and income support, transportation support for migrants, food and shelter support particularly to the marginalized people, the people who lost job and their livelihood, by the general administration on the other hand to minimise the shocks due to this pandemic. Hence it has become a pertinent question to answer, why welfare state continues to be in the focus of academic debate particularly when a nation faces crisis?

In lieu of Conclusion 

Now it has been realized and experienced by the world economy that the role of welfare state is crucial to absorb the shocks during man made or natural calamities and a new paradigm of shift is being witnessed in favour of welfare state . Major economies are shielding there economy with protectionist measures and providing more and more control of state through there fiscal and monetary policies.

References 

Engels, F. (1987), The Condition of the Working Class in England in 1844, London: Penguin.

Partha Chatteijee, (1993), The Nation and its Fragments: Colonial and Postcolonial Histories, New Jersey: Princeton University Press, p. 200. (cited in)

Karthik C. Roy (1995), Clement A. Tisdell and Raj Kumar Sen, Economic Development and

Environment: A Case study of India, Calcutta: Oxford University Press, p.11-12.

Authors are thankful to Prof Jajati K Pattanaik, Head, Department Political Science, JTGMDC, Roing, Arunachal Pradesh for his comments on earlier draft of this article.

Dr. Manish Sharma is Professor, Department of Economics, Institute for Excellence in Higher Education (IEHE), Bhopal, an autonomous institution under the aegis of the Govt. of Madhya Pradesh

Dr. Akhilesh Mishra, is Head, Department of Economics, S.D.P.G. College Ghaziabad (U.P).

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