Globalization and the Decline of the Welfare State

The idea that globalization and the welfare states can conflict comes from the fact that: while globalization is based on profit maximization, the welfare states main goal is to reduce, if not eliminate inequality, insecurity and poverty through proper redistribution of wealth mechanisms. The welfare state has to enhance â€Å"people’s adaptability, so that they, whatever their skills, can turn themselves from losers into winners through their own efforts† (Dennis J. Snower. Et al.137). The point of departure is that these two concepts are related to the allocation of resources and any conflict will have to occur on that level. This paper will not analyze the responses of the welfare states to the challenges of the 1970 and 1980s but†¦show more content†¦Placing knowledge and technology as the main carrier of economic growth and productivity can be seen as part of setting the stage for social cohesion and harmony to the economic competitiveness on the national but also international level. Increasing human capital, research and development, technology, as the KBE demands could also translate into a higher demand for the skills, puts a country at the forefront of competition in a particular sector (34). Although welfare regimes differ from one country to another, the assumption is that investing in human capital can make countries competitive and capable of competing on an international level. This view serves as an optimist view of the relationship between globalization and the welfare states. In order for globalization to be sustained, welfare regimes have been able to respond by increasing social expenditures on human capital. This shows that instead of being a conflict of goals, it is a harmonization of goals that go hand in hand. To a large extent, rich countries address social needs through their social expenditures According to the Organization of Economic Cooperation and Development (OECD) states that â€Å"Gross public social ex penditure on average across OECD increased from 16% of GDP in 1980 to 19% in 2007, of which public pensions (7% ofShow MoreRelatedThe Welfare State and Government Responses to Economic Openness1668 Words   |  7 PagesThe Welfare State and Government Responses to Economic Openness I. Introduction Economic openness is the phenomenon in which individual economies from all over the world become increasingly connected and interdependent through greater liberalization of trade and the vast movement of goods, services, and capital across borders. 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