Jubilee Insurance Rate Book: Fill & Download for Free

This is what's driving the anger, the radical politics, and the growing racism in our society.You see, while the rich are getting richer, everyone else is losing ground. Look at this chart, which shows how for most Americans, real wages have been stagnant or falling for decades...Most Americans are Getting Poorer:Cumulative change in real wages, by wage percentileSource: Economic Policy Institute.The middle class—the most politically and economically stable part of our society—is disappearing.The foundation of the middle class in America was a long history of consistently rising wages. For millions of Americans, life got a little better, year after year, as the value of their wages increased and our economy grew into the world's largest.But this is no longer happening. Low income earners now make LESS in real terms than they did in 1980! And middle income earners make just 6% more than they made back in 1980. That's an increase of just 0.00172% a year!Can you imagine your boss telling you for 34 straight years that you're never getting more than a 0.00172% raise each year?No wonder people are so angry and stressed.They've been going to work, year after year, but instead of earning more over time, they've actually been earning less, in terms of what their wages can buy.Despite the boom in the U.S. economy and financial assets over the past 30 years—which boosted the wealth and incomes of the wealthiest Americans like never before—average Americans are actually worse off than they were decades ago.And so, they've been forced to borrow more and more money simply to keep up.You can see that in the data—and I'll show it to you below.But I bet you don't even need to see the data. Just think about your friends and people you know, and how much more debt these folks have to take on, just to keep their heads above water.It used to be that most Americans didn't hold debt, outside of a mortgage on their first home. But after almost 40 years of declining real wages, Americans now have to go into serious amounts of debt for just about everything they buy.Americans now have more than $1.5 trillion in college debt, for example. Look at this incredible chart...The Incredible Rise of Student Loan Debt in AmericaSource: Federal Reserve.And it's not just college loans that have soared.Americans also have more than $1 trillion in credit card debt, and more than $1 trillion in auto loan debt—all record highs.It's gotten so bad, 73% of Americans now die with debt... with an average total of more than $60,000!Being in debt is an incredibly stressful way to live. You're in a hole and there is simply no way out. So it's no surprise that deaths by drugs and poisoning for the bottom 60% of American's population have doubled since the year 2000... and suicide rates have doubled as well over the same period.This is incredibly sad—and it's unfathomable that this is happening in the greatest country on earth.Unfortunately, the problem is going to get much, much worse.You see, tens of millions of people in America are desperate. They have no way out. And sooner or later this hopelessness and desperation are going to lead to violent and radical politics.And this enormous political powder keg is leading to THE biggest political event our country has seen in decades. I'll explain exactly what's going to play out in just a second.But first, like I promised above...I want to explain the secret reason why investors and the rich have become so much richer... while so many Americans have become trapped in a cycle of poverty...The Truth About America's Wealth GapThe underlying economic problem in America today is that money no longer flows to everyone equally in the way that it used to.That much is obvious, right? As our country has gotten richer than ever... the income disparity widens every year.But most Americans don't understand why this is happening.And here's the secret:The real underlying cause of our wealth and income disparity in America is that wages are no longer connected to gains in productivity.I know that sounds like economic doublespeak, but please stick with me...If you can grasp this concept, you will be way ahead of 99% of the population, and it will help you make a heck of a lot of money and avoid enormous losses.So let me explain what it means. It's not complicated...You see, back in the early part of the 20th century, economic gains were shared by both owners and workers.Ford—and his employees—got rich boosting productivity. My new book explains why only corporate executives get rich today.Think about Henry Ford.He got rich making the automobile affordable with the assembly line—a huge increase in productivity. And these gains in productivity flowed directly to Ford's employees. Ford made headlines across the nation when he more than doubled his minimum pay, overnight, in 1914.But that doesn't happen anymore. Real wages have declined for most Americans, despite huge gains in productivity over the last several decades.Look at this chart based on research from the Economic Policy Institute, which shows this problem clearly...Productivity Growth vs. Income GrowthWhat's going on here?It's not that computers are destroying our jobs. Or that we've moved jobs overseas.As you can see, back in Henry Ford's days and decades after, productivity—a measure of how efficient we are at producing goods and services—and income gains moved hand in hand.But then, something happened. As the Economic Policy Institute States:"From 1973 to 2016, net productivity rose 73.7 percent, while the hourly pay essentially stagnated—increasing only 12.5 percent over 43 years... This means although Americans are working more productively than ever, the fruits of their labors have primarily accrued to those at the top and to corporate profits, especially in recent years."You'll notice that the divergence begins around 1971... the year President Nixon removed the U.S. dollar from gold.Why is this important?Because paper money printed out of thin air doesn't transmit gains in productivity like real, sound money should.When money is sound and reliable, it doesn't lose value over time. In fact, quite the opposite—it buys more and more, because of increases in productivity and efficiency.But the link between productivity and wages was permanently changed in the early 1970s when Nixon forever broke the link between our dollar and gold.As a result, today our monetary system isn't sound or reliable.Our politicians monkey around with the money supply constantly. They increase the amount of money by huge amounts, in response to demands from powerful groups—especially banks.As a result, the things you need to live a regular life—such as gasoline, milk, housing, and medical care—constantly get more expensive. These prices go up, year after year, even when wages don't.In other words, even though there's been an enormous amount of wealth created by our economy (look at all the huge new houses, condos, skyscrapers... and electronic cars), life for average Americans hasn't improved one bit. The average worker has gotten poorer.Again: That's not because our economy hasn't gotten better.Our economy has boomed through enormous increases in productivity—technologies like personal computers, cell phones, the Internet, RFID tags (for inventory control), gene sequencing, GPS, and fantastic increases to fuel efficiency.You can see these gains in your everyday life.But... on the other hand... everything you need to live and prosper—from food to housing, healthcare to cars and education—has gotten way, way more expensive.Look at the price of a new Ford F-150 pickup truck, for example. It's the best-selling vehicle in America and has been for decades.Price of a new Ford F-150 Since the 1960sSource: NADA Guides via The Drive - Automotive News, Car Reviews and Car TechIn 1969, a new truck was $2,500. But today a new F-150 costs about $30,000 for the base model. For an F-150 you'd actually want to drive, the cost is about $45,000. That's almost an entire year of after-tax wages for the average worker!This all means some folks in America are doing great...Look at the huge increase in the number of American billionaires. Look at how many more planes Boeing is selling... at the cars Ford and GM are selling all over the world... at the way our entertainment industry dominates movies around the world, and at the way our tech firms (Apple, Google, Facebook) rule the Internet.That's been great for investors and for tech-savvy engineers.But what about the average American?These terrific gains haven't impacted most wage earners because the gains in productivity and technology didn't flow through our entire economy the way they should... the way they used to.These gains in productivity, especially the improvements in technology, should have made our currency much stronger... and should have made everything you buy—from Ford trucks to milk—much cheaper.But that's not what happened, as you know.Instead, the cost of just about everything has always gone up. Way up.That's because, no matter how big the gains in productivity are, the government—politicians and their minions at the Federal Reserve—have always created more money.Sometimes they do it by creating a lot of new credit. And sometimes by simply printing trillions of new dollars out of thin air.All of this new money ALWAYS causes prices to rise more than productivity.And this is the big secret the corporate executives and politicians hope you never understand.Because wages are no longer connected to gains in productivity... Over time... there's nothing the average American can do to stay ahead of inflation.So most Americans have been forced to borrow—in a way that is unprecedented in our history...U.S. consumers now have nearly $13 trillion in total debt... the highest total ever, even more than was owed right before the crash in 2007... in order to pay for food, housing, cars, education, healthcare, and other basic expenses.We owe a trillion dollars on our credit cards—which often have interest rates as high as 28%! We've borrowed a trillion dollars to buy new cars—which plummet in value the minute you drive off the lot. And we've racked up about $1.5 trillion for college education with dubious worth.The debt load for the working poor has nearly quadrupled in the past 20 years as a percentage of their income. And this debt can never, ever be repaid.It's this system that dooms every average worker to poverty. And almost guarantees that the rich and the powerful will stay that way.Simply working harder—or working smarter—isn't benefiting employees anymore. On the other hand, Americans who own assets and businesses have seen their wealth soar over the last 40 years.And so we are left with the biggest income and wealth disparity in America in nearly 100 years.For those who have taken on these incredible new debt loads, it's a very stressful way to live. So many Americans today are in a hole. They are extremely stressed out, and there is no way out.And herein lies the problem.This group is growing, and this stress and anger is building... ultimately fueling many of today's biggest issues...The next big crisis is already underway...Protests like the one in Charlottesville were just the beginning. Wait until you see what's coming next in America...It's why you see people rioting in Charlottesville, Virginia...It's why you see massive increases in violence and desperation in cities like Baltimore and Chicago...It's why you see more and more radicalized politics—like resurgent neo-Nazi groups and the rise of Black Lives Matter...It's why you see the tearing down of historic statues, and why according to a recent Harvard study, more than 50% of young people no longer believe in capitalism!It's why we now have the highest-ever percentage of people on food stamps—double the historical rate.It's why in some states, nearly 10% of working age adults receive disability payments!Remember: These uprisings and protests may be nominally about race, or Donald Trump, police brutality, or immigration.But what they're really all about is money, debt, and economics.And that's why we will soon see a dramatic political and economic event, the likes of which we haven't seen in nearly 50 years...Get ready America, the Jubilee is coming...Very soon, millions of Americans will be calling for the government to "do something."Specifically, they'll be calling for a clean slate... to wipe out their debts and "reset" the financial system.The crowds will cheer and march like never before. The violence will escalate. Our politicians will promise this reset of the financial system as a way to a "new and better prosperity."And while it might sound like good news to those who have gotten in over their head—what will really happen is a national nightmare.You see, this idea of erasing debts to reset the financial system is not new. In fact, in the Bible, it's referred to as a "Jubilee."If you're unfamiliar with the term, it comes from The Old Testament, the Book of Leviticus, Chapter 25.A Jubilee in the Jewish tradition was said to occur roughly every 50 years.It was a time for total forgiveness of debt, the freeing of slaves, and the returning of lands. Pope Boniface VIII proclaimed the first Christian Jubilee in 1300.Since then, it's been used dozens of times, when anger among a population hits extreme levels, typically because of an explosive divide between the wealthy and the working class.And very soon, millions will be calling for a new Debt Jubilee here in America.Believe it or not, many are already doing so...Folks like Carmen Reinhart of Harvard University and Stephen Roach of Yale have advocated for a Debt Jubilee in one form or another. So have financial pundits Barry Ritholtz and Chris Whalen.In Congress, more than a half-dozen Jubilee-style laws have been proposed, by folks such as Rep. Kathy Castor and Senator Bill Nelson from Florida.And many of the most powerful left-wing economic "experts" are calling for a Debt Jubilee by name...London School of Economics Professor David Graeber says: "we are long overdue for some kind of Biblical-style Jubilee... it would relieve so much genuine human suffering."The national affairs correspondent for The Nation says we should: "Think Jubilee, American Style... because it combines a sense of social justice with old-fashioned common sense."Paul Kedrosky, a senior fellow at the Kaufman Foundation (a liberal think tank), says: "we need a fresh start, and we need it now... we need... a Jubilee."A Jubilee—which wipes the slate clean for millions of the most indebted Americans and "resets" the financial system—is inevitable.And mark my words:This trend will accelerate. The idea of a Debt Jubilee will become THE leading political issue in the months to come.Today, for millions of Americans, there's no more powerful political promise than a Debt Jubilee. Politicians will soon be promising it all...I will wipe out your debts.I will allow you to start fresh.I will reward all of your bad decisions.I will solve America's massive income inequality.Who will pay for it?You guessed it...You, me, and millions of Americans with pensions, retirement accounts, and other types of savings.Just as in the past, the folks in Washington will disguise this Jubilee under a different name.They might call it a "National Restoration" or "Patriotic Solvency."They'll pass an "Act" like they did in 1841... or invoke an Executive Order as was done in 1933 (Executive Order #6102)... or simply issue a mandate to the Secretary of the Treasury (which they did in 1971).But it all means the same thing. The Jubilee will redistribute trillions of dollars from those who have invested and saved... to those who can no longer pay their debts.What Can You and Your Family Do To Prepare?You see, around the world today, the idea of a Jubilee has become the de facto solution for extreme financial problems... when debts can't be repaid.Iceland used a Jubilee to restructure mortgages that were underwater. Croatia used a Jubilee in 2015 to wipe out millions in consumer debt. Japan is doing the same right now with nearly half its national debt.The idea of a debt Jubilee has become the de facto solution when debts can't be paid. President Trump proposed exactly this after Hurricane Maria.President Trump has suggested a Debt Jubilee for all of Puerto Rico's bond debt after Hurricane Maria.After studying hundreds of years of financial history, I believe America's upcoming Jubilee will strongly resemble the one that took place in our country way back in 1841...Back then, the laws were temporarily changed, so debtors could be discharged of their debts... without the consent of the creditors. Over a period of 13 months... more than 40,000 people wiped away their debts before the act was rescinded.But of course, this time around, the Jubilee won't be tens of thousands of people like it was in 1841... it will instead be tens of millions of people, and trillions of dollars.Now, if you don't think a debt Jubilee is possible in America, you haven't studied U.S. history... and you aren't paying attention to the current political climate...Look at the staggering figures behind student loans alone...Over the past ten years, students (most of whom are young and have virtually no income) have racked up enormous debts, which currently total about $1.5 trillion.Incredibly, that's what our entire federal government owed a little more than 30 years ago.And these debts have ballooned to absurd amounts. The number of students with debts over $100,000 has quadrupled in the last ten years. Most of this money will never, ever be repaid.And most Americans don't realize that the Millennials (who hold nearly 65% of this debt) are now our country's largest generation, outnumbering Baby Boomers.Just think about the political implications...These people have an enormous stake in whether or not a national Debt Jubilee is declared.You see, when the rich—a very small percentage of the population—get in trouble with debt, it's an economic problem.But when the poor and middle class—a huge percentage of the population—get in trouble with debt, it's a political problem.And there will be major consequences...Millions of investors, pensioners, insurance customers, and creditors will lose a fortune.Stocks will collapse. Dozens of companies will go bankrupt.Just one quick example of how this problem will affect EVERYONE in America...Do you remember during the last crisis... the mortgage crisis... how many lenders never bothered to verify the income of people they were lending money to?Some referred to these as "Liar Loans," which allowed borrowers to make up whatever income figure they wanted... and get a much more expensive house than they could realistically afford.Well... believe it or not, the same thing is happening again right now with auto loans.One company I've written about more than a dozen times has made an extraordinary number of these "Liar Loans" for cars. And a recent Bloomberg story says this firm verified the income on only 8% of the loans they made!And guess what...Just like the mortgage crisis of 2008, these loans have been packaged up into what are known as "Asset Backed Securities," and sold to hundreds of mutual funds, insurance companies, investment firms, even state pension plans.The financial lawyer on my research team found more than 120 entities that own these dangerous "Asset Backed Securities."I'm sure you'll recognize the names:JP Morgan ChaseTIAA-CREFThe State of FloridaBlackrockVanguard GroupT Rowe PriceWells FargoUBSPacific Life Insurance CompanyPrudential FinancialHartford Financial GroupSwiss RETransamerica Investment ServicesLondon Stock Exchange GroupDeutsche BankMMM HealthcareMacquarie GroupGoldman SachsInvesco LTDBank of New York MellonEaton VanceRegions BankZurich GlobalPeople's United BankFranklin ResourcesMassachusetts Mass Mutual Insurance.Merrill LynchWhen the Debt Jubilee arrives, the problems with all this bad consumer debt will hit at once.Everyone will freak out.And that's the biggest problem—the uncertainty.No one will know for months how it will all get sorted out. So the markets will react violently.One proposed scenario comes from Rob Johnson, a former banker, who now runs the Institute of New Economic Thinking. He says:"You call a month-long bank holiday for the twenty largest banks, and that holds everything in place while the regulators mark down the assets and see how everybody's losses will affect everyone else."Then you wipe out stockholders, wipe out management, possibly some of the unsecured debt... Once everybody has taken their hit and you've wiped out existing stockholders, then the government comes in and properly, transparently recapitalizes all of them. As these new institutions gain a footing, eventually they can be sold back to the private market."No one can know exactly how it will be done, but through one mechanism or another, the government will seek to reset the financial system... and they will start by wiping out trillions of dollars in bad debt.Car companies, homebuilders, credit card companies, insurance firms, banks, other lending institutions, and any business operating with leverage, will take a huge hit.Stocks will fall considerably. Banks will close. There will be trillions in losses.In fact, at the end of the day, I believe the losses at an institution like Wells Fargo could be enough to start a bank run.Is there anything you can to do prepare?Now look... what I've described to you here—a national Jubilee that could wipe out trillions in debt from irresponsible borrowers, while robbing millions of Americans of their legitimate savings—is EXTREMELY controversial.I know there's sure to be a legion of "experts" who will be trotted out on MSNBC and CNN to discredit.They will say the most outrageous things about me.But I'm not afraid to take on the establishment. I've done it many times before...No one believed me back in 2006, when I said the two biggest mortgage companies in America (Fannie Mae and Freddie Mac) would go bankrupt. But I was featured in Barron's when it was clear my prediction was coming true.People thought I was crazy when I made similar predictions about General Motors. But again, that's exactly what happened.Few believed me when I said America's biggest mall owner, (General Growth Properties) would collapse. But then it did.And even fewer people believed me when I said oil prices would drop from well over $100 a barrel to less than $40. But again, that's exactly what happened.Just as these events were inevitable, so is America's next Jubilee.Huge losses are coming. Economists know it. Most of the senior leaders in Washington know it too.But what can our leaders do?The crowds are only going to get angrier and more violent.A Jubilee that wipes out the debts of millions of the working poor and resets the financial system, is the only answer.My research team and I have done more work on this subject than anyone else in the financial industry—and we've finished what could become the most important book in America over the next few years.It's called: The American Jubilee, and it explains in great detail how we got to where we are today. You'll learn about the history of financial Jubilees in America and elsewhere around the world.... and what you MUST do to survive and prosper in the years to come.Get the facts for yourself. Learn what you can do now.Porter Stansberry founded Stansberry Research in 1999 with the firm's flagship publication, Stansberry's Investment Advisory. He is also the host of Stansberry Investor Hour, a weekly broadcast that has quickly become one of the most popular online financial radio shows. At Stansberry Research, Porter oversees more than twenty of the best editors and analysts in the business, who do an exhaustive amount of real-world, independent research.

Hi Brij,You know, it’s definitely possible that since the Federal Government is handing out free cash money, that people also suspect that the system is overloaded with paper-work, that no one will ever get caught claiming unemployment they don’t deserve, that even if they do get caught what could the government do? Throw them all in a federal prison?Split this question between business and people first, because it’s easier to figure out. If the government is going to continue, I mean continue as a government and not a military dictatorship or something like that, they have to get incomes to the people. The people have to be appeased. It’s the Keynesian reality now, man.Can you believe that these do-nothing Republicans have essentially embraced socialism wholeheartedly! Thank you for fulfilling Bernie’s mandate before he even has a chance to run. Instability, surprise, uncertainty, are the undoing of Conservatism in America. That is what I mean by the Right not knowing how to govern. They can campaign till the cows come home, they talk a big game, but when it comes to actually harnessing the reigns of power for leadership, even using the bully pulpit, they’re cowering in a corner.If you’re holding down a low-wage job to fend for your family and all of a sudden you have no income, you deserve the income now. Ask yourself, why has it come to this point, in which the government must subsidize expenditures for the entire 90% of the poor and the Middle Class population? We are staring in the face, right now, that possibility of deep and long-lasting Depression. The only thing that’s saving banks right now is the mountains of reserves. If you look at the benefits to business, well, it looks like window dressing to appease the free-marketeers. There’s the tax breaks. That did not work before. There are also loans and grants to small and medium-sized businesses: that’s more ”people-oriented” than it sounds, because these small business are often partnerships or sole proprietors.Under normal circumstances there are many bad applications for funds, many initial claims for unemployment under false pretenses. It’s a function, so scale it up.It’s not so much going to be the rich cooking the books to get their $1200. It’s going to be the poor and the Middle Class (in the know, with computer, with some extra time) that seek short-term income support that they desperately need to provide for their families. (Until the support runs out and the next tranche of aid reaches the public.)Low-wage workers in the restaurant, catering and tourism industries, many construction workers laid off, many more medical aides overworked and burning out, people are NOT coming back to work to risk infecting their families any time soon. Look, almost 60% of the workforce are wage earners (paid at hourly rates). Characteristics of minimum wage workers, 2017 (See Table 10.) These folks have not seen an increase in real wages overall for more than half a century. For most Americans, real wages have barely budged for decades If the parallels with Robin Hood aren’t obvious now, they never will be. In fact, what could happen in the next 3 months might resemble what ancient biblical tradition called a Jubilee Year - when debts were forgiven. Jubilee (biblical) - WikipediaI believe the US will slowly return to Labor Ascendancy, away from the rule of Capital. What Clinton allowed because he felt like he had to appease the bond traders - Glass-Steagall overturn - should never have happened. It ruined the valuations of our entire financial structure, already unpegged from gold (in 1971), allowing “too many entities to create money” and concentrating money into the hands of brokers, insurance houses, stock and bond traders, mortgage securitization agents - anywhere risk, interest rates and loans coincided with a demand for funds.Labor Ascendency will mean a the reverse of capital concentration and a lowering of Economic Inequality - income first, wealth eventually. Decentralization of business. Less power for corporations. Government intervention where markets fail. Obviously more power for the unions, more and better legislation to protect households and working families, more equal treatment for those who work rather than those who merely accumulate money. Capital doesn’t make the best decisions about factor allocation because it relies too much on profit and its accumulation. Capital is dumb - it seeks only more capital. Labor needs agreement to change things.But let’s get back to your question of massive government transfer payments and the increased number of applicants. This would be hard to prove empirically (say a correlation estimator) because there are two schedules in time without exact matches. You need joint probabilities here, pairs to compare. In fact, you can call the supply of benefits one draw, and the applications another draw.Pat

IntroductionIn recent years, welfare states have been the subject of increasingpolitical and ideological debate over their effects and effectiveness.Most advanced western states appear committed to reducing socialexpenditure, and to introducing measures such as labour marketderegulation and lowered tax rates which facilitate greater economiccompetitiveness, but impact adversely on rates of poverty and inequality.These economic and political initiatives have coincided with a period ofintense economic globalisation. The growing significance of internationaltrade, investment, production and fmancial flows appears to be curtailingthe autonomy of individual nation states. In particular, globalisationappears to be encouraging, if not demaPhilip MENDESin social expenditure, he also documents the considerable differencesbetween the English speaking countries, and other OECD states.Thus, I will argue that the influence of globalisation on individual nationstates can best be understood by exploring those political and ideologicalforces locally and internationally which are respectively seeking either toretrench or retain the welfare state. Reference will also be made here to theargument advanced by Deacon (1997) that globalisation has raised socialpolicy issues to a supranational level, and that global supranationalagencies are exerting increasing influence on the shaping of national socialpolicies.Whilst many of these international organisations are currentlysupportive of the neo-liberal project to retrench welfare, there is evidenceof increasing resistance to this agenda at the international as well as locallevel.Different Views of GlobalisationEconomic globalisation appears to have been fuelled by the collapse ofcommunism, and the absence of any serious alternative to the freemarket (Mishra 1999, ix). The term refers to a shift in the scale of socialand economic relations from the regional or national to the global.Processes such as hi-tech communications, lower transport costs, andunrestricted trade are perceived to be transforming the world into onesingle market (Bessant & Watts 1999, 229).A number of authors view globalisation as transferring power fromnational governments to uncontrollable market forces and new economicactors such as transnational corporations, international banks and otherfinancial institutions. Concern is expressed that these trends haveimportant ramifications for the sovereignty and autonomy of individualstates, given that there is no global authority which can impose limits orrules on international markets (Wiseman 1996a, 115; Capling et al 1998, 5).However, other authors such as Wiseman (1996a), Fincher and Webber(1997), Weiss (1998), and Hirst & Thompson (1999) are more sceptical,and reject the notion that global actors are overwhelmingly displacingnational political and economic power networks. They argue instead thatglobalisation tendencies remain subject to autonomous responses andoutcomes within particular nation states.This debate is crucial for the future of advanced welfare states. Thosewho view globalisation as all-powerful argue that all national states are118Globalisation and the Welfare Statebeing increasingly pushed towards a common model of highly deregulated,privatised, and liberalised capitalism. Under this model, states are forced tooffer lower and lower taxes in order to compete for footloose privateinvestment. Consequently, globalisation leads inevitably to the decline ofthe welfare state through the vetoing of initiatives towards greater socialexpenditure and full employment by international financial markets(Martin & Schumann 1997; Capling et al 1998; Gray 1998; Beck 1999; Shin2000).Even the long-time Scandinavian welfare advocate, Esping-Andersen(1996) argues that globalisation has narrowed domestic policy choices, andthat states are highly vulnerable to international trade, finance and capitalmovements. Consequently, welfare states face a fundamental trade-offbetween employment growth and efficiency, and egalitarian socialprotection.However, other authors reject this suggested trade-off. Goodin et al(1999), for example, utilising a comparative study of Holland, Germanyand the USA, argue that social democratic welfare regimes equal or exceedthe performance of corporatist and liberal regimes across all social andeconomic objectives. In addition, research by Garrett & Mitchell (1995)refutes the proposition that increased global trade and capital mobilitynecessarily leads to welfare cuts. Similarly, Hirst & Thompson (1999) arguethat individual states retain considerable political flexibility in theirresponse to globalisation.Mishra (1999) offers a more complex and ultimately more satisfactoryviewpoint. He acknowledges that global competition has reduced theautonomy of individual nation states, and that the evidence suggests adownward spiral of social standards. Whether in Europe or elsewhere, theconsistent trend is towards greater inequality.Whilst some social democratic governments attempt to resist this trend,they are arguably limited to acting as reluctant neo-liberals whose policiesinevitably drift closer to their right-wing counterparts. The heroic, butultimately unsuccessful attempt of the Swedish social democrats to savefull employment perfectly illustrates this point. The best they appear ableto do is to slow down the erosion of social benefits, and to ensure a moreequitable process of retrenchment whereby the poor and disadvantagedare protected.In contrast, right-wing governments enthusiastically pursue an agenda ofretrenchment and privatisation of social protection.However, Mishra also suggests that standards have declined far more in119Philip MENDESEnglish speaking countries than in continental Europe and Japan, and thatglobalisation is as much a political and ideological phenomenon as it iseconomic. Thus national social policy responses to globalisation are notuniform, and continue to reflect the ideological and political traditions ofindividual states.Global Social PolicyThe debate about the effects of economic globalisation is complicatedby the increasing influence of international organisations andinstitutions on national social policies.These include global institutions such as the World Bank, theInternational Monetary Fund, the International Labor Organization (ILO),and UNICEF, supranational bodies such as the Organization forEconomic Co-operation and Development (OECD) and the EuropeanCommission, and supranational non-government agencies like Oxfam.According to Deacon (1997), globalisation has raised social policy issuesto a supranational level. He deftnes the scope of global social policy asincluding social redistribution between countries; global social regulationof the terms of trade and the operation of ftrms in the interests of socialprotection and welfare objectives; and social provision and empowermentat a level above that of national government (e.g. the United Nations HighCommission for Refugees).Deacon refers to three particular manifestations of this global socialpolicy discourse:1201) Economic competition between countries may lead them to shed theeconomic costs of social protection in order to be more competitive(i.e.engage in social dumping - reduce levels of taxation for socialpurposes) unless there are global regulations in place to prevent suchactions;2) International migratory pressures provoke consideration of incometransfers between nations in order to alleviate the political consequencesof mass migration;3) Common regional markets in capital and labour could lead to thepossibility of an international authority providing at a global or regionallevel the social rights denied or threatened at national level.Globalisation and the Welfare StateDeacon argues significandy that a global social reformist project isrequired to address the new global social policy framework ofredistribution, regulation, and provision.lbis project would seek broadly to: 1) Regulate global competition inthe interests of labour and social standards; 2) Make the Bretton Woodsfinancial institutions - the IMF and World Bank - more accountable; 3)Reform the United Nations: Introduce a new UN Economic and SocialCommittee to lead the debate around alternative social security/ assistancestrategies; 4) Strengthen global political, legal and social rights ofcitizenship via international covenants and social charters; 5) Empowerinternational civil society through international non-governmentorganisations.Other authors including (Townsend 1993, 1996 & 1999; Wiseman 1996;Bourdieu 1998; Langmore 1998; Chossudovsky 1999; Mishra 1999) alsorecommend international action to promote social reform. Specificrecommendations include the introduction of the oft-proposed Tobin Taxto reduce financial speculation and instability, the formation of regionaltrade unions, and the establishment of international social standards linkedto the economic standard and capacity of individual nations.What is significant about this debate is the recognition that nationalsocial policies are becoming more and more influenced by globaleconomic forces and institutions, and that conversely global social policyinitiatives may be required to offset the common trend towards welfareretrenchment inspired by global markets.Global Advocates of Nee-Liberal Welfare RetrenchmentThis section analyses the international neo-liberal (sometimes called theNew Right or economic rationalist) forces which have inspiredwelfare retrenchment.The International Monetary Fund (IMF), for example, was originallyformed at the 1944 Bretton Woods Conference to ensure monetarystability in an open economy, as a substitute for the gold standard, whichhad fulfilled this function successfully until the First World War. Its keypurpose was to discourage individual nations facing external balance ofpayments difficulties from taking steps negatively affecting other countriessuch as currency and import restrictions, or devaluations.The IMF has long been regarded as an unrepentant advocate of neoliberalideas. Since 1980, its structural adjustment programmes in the lbird121Philip MENDESWorld and former Soviet Bloc countries have been based on rigid loanconditions including trade liberalisation, reduced imports, reduced publicexpenditure, cuts in progressive taxation, privatisation of state-ownedfirms, increased interest rates, non-inflationary monetary policy, and anoverall reduction in national sovereignty (Deacon 1997, 61-65; Koivusalo& Ollila 1997, 83-85).According to its many critics, these policies have lead to furtherindebtness, and impoverishment. For example, Chossudovsky (1999) andRansom (1999) refer to declining spending on health and education,leading to millions of children being denied access to primary education,and a growth in infectious diseases. A recent report by Oxfam (1999)identifies major declines in social indicators in countries in East Asia, subSaharanAfrica, and Latin America involved with IMF programmes.The IMF has less direct influence on industrialised western nations.However, the IMF and OECD have actively encouraged Europeanwelfare states to adopt neo-liberal models based on the reduction of socialassistance, and the maximisation of labour market flexibility andcompetitiveness (Mishra 1999).According to Deacon (1997), the IMF has begun to acknowledge thedetrimental social impact of some of its structural adjustmentprogrammes. In addition, the IMF does support a short term social safetynet to support the poor during periods of economic reform. Deacondescribes, for example, the application of such policies in post-CommunistHungary.However, overall, the IMF appears to still prioritise the interests ofcommercial banks at the expense of people living in poverty. The WorldBank was also formed in 1944, and has focused principally on makingloans to Third World governments to pay for investments in large basicinfrastructure projects such as dams, power plants, and roads.In contrast to the IMF, the World Bank has responded to earliercriticisms of its policies and practice in developing countries by initiatinganti-poverty programmes. According to Deacon, this emphasis has led tosome softening of the earlier structural adjustment policies in Africa andLatin America. There is also divisions within the Bank between those whohave been influenced by the social guarantees of former Communist Statesinto supporting more collectivised, social solidaristic forms of policy andprovision, and those who still subscribe to fundamentalist neo-liberalism.Overall, Deacon argues that the World Bank appears to stand for socialsafety nets for the poor, but against organized labour or European122Globalisation and the Welfare Statecorporatist social security structures (Deacon 1997, 65-70; Koivusalo &Illila 1997, 23-45).Other commentators are more skeptical about ideological changeswithin the Bank. Chossudovsky (1999), for example, argues that the Bank'semphasis on poverty alleviation fails to effectively challenge the dominantneo-liberal macro-economic agenda. He speaks of a token targeting offunds to the poor, alongside the dismantling of state social expenditure.Other international instruments including Regional Trade Agreementssuch as the North American Free Trade Agreement (NAFfA) have alsoplayed a role in reducing existing social welfare and labour market rightsand conditions. As Deacon notes, NAFT A lacks 'anything recognizable asa social dimension' (Deacon 1 997, 81).Similarly, Korten (1995) & Ainger (1999) argue that the World TradeOrganisation is predisposed to defending the rights of the world's largestcorporations at the expense of social justice, health and labourconsiderations. Concern has also been expressed about the implications ofthe proposed Multilateral Agreement on Investment which aims to protectthe freedom of multinational companies, and restrict what governmentscan do to regulate their activity (Wheelwright 1998; Ranald 2000).In addition, Hayward & Salvaris (1994), Mishra (1999) andChossudovsky (1999) argue that international credit rating agencies such asMoody's and Standard and Poor have pressured governments into cuttingsocial expenditure.The Philosophical Origins of Nee-LiberalismNeo-liberals draw their ideas from the classical liberal doctrines ofeighteenth century anti-collectivist philosopher and economist AdamSmith, the Austrian theorist Friedrich Hayek and the American economistMilton Friedman.Hayek, for example, argued in The Road to S eifdom that economicinequality produced by the free operation of the market, where distributiondepends partly on the ability and enterprise of the people concerned andpartly on unforseeable circumstances (as opposed to inequality which isdeliberately imposed by totalitarian authority), was the engine of economicand social progress. Egalitarianism would only lead to coercive policies andthe breakdown of social cohesion (Hayek 1944).Critics of classical liberal ideology argue that it is 'social darwinist' inintent, threatens all those unable to compete effectively in the market, and123Philip MENDESserves to increase and legitimise social and economic inequalities(McChesney 1999).The New Right Think TanksFollowing the Great Depression and World War Two,collectivist/Keynesian ideas urging government intervention tomanage the economy became dominant. Hayek and the classical liberalswere effectively marginalised. However, over the last 25 years, classicalliberal ideas have enjoyed a remarkable international revival to the pointwhere they can reasonably be described as constituting a new politicalorthodoxy.Their revival has been gready assisted by an international conglomerateof neo-liberal think tanks generously funded by corporate resources. Thesethink tanks trace their origins to the relatively obscure Mont PelerinSociety founded by Friedrich Hayek in 1947 as an international forum forclassical liberal ideas. As noted by Cockett (1994), the think tanks largelymirror the earlier successes and methods of the left-wing Fabian Society intheir commitment to converting a generation of 'opinion formers' andpoliticians to a new set of ideas.For example, major US think tanks include the Heritage Foundation,and the Cato Institute. The Heritage Foundation has a budget of over $25million per year of which almost ninety per cent is raised from more than6,000 private donors. Both organisations exerted considerable impact onthe Reagan Government's policy agenda. Similarly, in Britain, the Instituteof Economic Affairs and the Centre for Policy Studies were significantinfluences on the Thatcher Government. Numerous think tanks also existin Europe, Canada, and Latin America (Beder 1997, 7 5-89; Balanya et al2000, 17-18).In Australia, a group of academic-style think tanks were established inthe early-to-mid eighties, the best known being Gerard Henderson'sSydney Institute, the H.R Nicholls Society, the revived Institute of PublicAffairs (IPA), the Institute of Labour Studies at Flinders University, JohnHyde's Australian Institute for Public Policy, the Tasman Institute, theCentre for Independent Studies (CIS), and the Institute for PrivateEnterprise. The Business Council of Australia, and the AustralianChamber of Commerce and Industry have also espoused neo-liberal views.The Australian New Right think tanks have considerable resources attheir disposal. According to Ian Marsh (1995, 79), they enjoyed a124Globalisation and the Welfare Statecombined income of approximately $4.5 million in 1990. In addition, theBusiness Council has an annual income of five million dollars, whilst theequally conservative National Farmers Federation has a budget of around$2.3 million.Marsh (1995) and Smyth (1995) argue that the think tanks have exerteda substantial impact on the Australian political agenda. Tills wasparticularly the case in Victoria where the Tasman Institute and Institutefor Public Affairs provided policy blueprints for the Kennett Government(Kohler 1997; Hayward 1999, 140-142). They have also exertedconsiderable influence on the welfare policies of both Labor andparticularly federal Liberal Governments (Mendes 1993, 9-10; Mendes1998; Mendes 1999b). In addition, they are also active in opposing debtrelief for Third World countries (See Harper et al1999).Think tanks have not only been able to shape the policies of individualgovernments, but have also succeeded in moving the whole policy debateto the Right. According to Beder (1997), the free market ideas promotedby the think tanks have become hegemonic not only amongst conservativeparties, but even within traditionally social democratic groupings. Theyhave become publicly accepted as self-evident truths against which there isno other alternative.The New Right Critique of the Welfare State~e New Right generally advocates the partial withering of the welfarel. state, rather than its outright abolition. Most New Right theoristsrecognize, for example, that government does have a responsibility to pickup people in dire straits, and to ensure that people unable to provide forthemselves have access to adequate food, shelter, heat, clothing, healthcare, and education. The qualification is that this support should beminimal and not comfortable, so as not to reduce the incentive to work.The New Right does, however, mount a significant critique of theexisting welfare state. This critique has been discussed in greater detailelsewhere (Mendes 1993, 1997 a & 1998), and will only be summarisedbriefly here:1) In line with public choice theory which holds that the market is alwayssuperior to the government, the New Right argues that the welfare statehas been captured by 'public interest' pressure groups such as theAustralian Council of Social Service.125Philip MENDES2) The New Right argues that minimum wage laws deny the less skilledand more disadvantaged workers access to jobs. They emphasize the needfor a more flexible labour market without award and minimum wageprovisions.3) The New Right maintains that government welfare programs encouragedependency and anti-social behaviour, and do litde to encourage selfrelianceand desirable behaviour. The New Right, therefore, advocates theintroduction of a six month qualifying period for Sole Parent Pension anda shorter period of eligibility, and also recommends that Australia followother countries such as the USA, Japan and Canada in imposing muchharsher requirements on claimants for unemployment benefit.4) According to the New Right, current welfare programs encouragepeople who do not genuinely need or deserve it (the undeserving poor) toseek help.5) The New Right argues the social security system should be privatisedbecause voluntary organisations are better at delivering welfare programsand discourage dependence.Critics of the New RightCritics of the New Right's views on welfare argue that:-The New Right itself represents vested interests, and these interestsare likely to gain directly from any withering or 'rolling back' of the welfarestate;- The abolition of minimwn wages is likely to lead to below poverty levelwages and increased inequality;- The New Right's proposals to eliminate welfare dependency arerepressive and intended to blame and punish the victim, rather than toattack the structural causes of poverty and dependency;- Attempts to distinguish between the deserving and undeserving poor areintended to isolate one group of poor people from the rest, to stigmatisethem, and to give the poor an incentive (ie force them) to work for lowwages; and-Welfare privatisation is likely to destroy the integrity and accountability ofthe income security system, and to force non-profit agencies to targetthose able to pay the new or higher fees that they are forced to impose,rather than low income earners (Mendes 1993; Mendes 1997a; Mendes1998).126Globalisation and the Welfare StateGlobal and Regional Critics of Nee-LiberalismIn contrast, a number of local and international forces campaign for theretention of state welfare provision.For example, a group of social reformist agencies exist under theauspices of the United Nations Economic and Social Council. Perhaps thebest known is the United Nations International Children's EmergencyFund (UNICEF) which was established in 1946 as a temporary body tomeet the emergency needs of children in postwar Europe. More recently,the Fund has focused its attention on the development of child health andwelfare services to prevent malnutrition in the Third World.UNICEF has been a persistent critic of the anti-social policies of theIMF and World Bank, and the negative consequences of structuraladjustment policies for children. UNICEF has consequently had animportant influence on the World Bank's adoption of anti-povertyprograms (Deacon 1997, 84-85; Koivusalo & Ollila 1997, 46-61; UNICEFwebsite 2000).The work of UNICEF has been reinforced by the activities of theUnited Nations Development Programme (UNDP). The UNDP wasestablished in 1965 as the central funding and coordinating organisationfor United Nations technical assistance to developing countries. TheUNDP recently created a new measure of social progress, the humandevelopment index, which combines longevity with education attainmentand a modified measure of income and poverty to rank countries on ascale somewhat differently to a narrow GNP classification.A further associated agency is the semi-autonomous United NationsResearch Institute for Social Development (UNRISD). The UNRISD hasexplored the socially disintegrative aspects of globalisation, and the notionof citizenship at a global level.The UN Economic and Social Committee was responsible for the muchpublicised 1995 World Social Development Summit which aimed to tackleissues of poverty, social exclusion and social development, North andSouth. The Summit concluded with commitments to the eradication ofpoverty, the promotion of full employment, gender equality, and qualityhealth care and education, and the fostering of social integration (Deacon1997, 84-89; Koivusalo & Ollila 1997, 62-70).The International Labor Organization (ILO) aims to set and maintaincommon international labour and social standards. The ILO hasestablished a number of conventions which, if ratified, provide for a well127Philip MENDESfunctioning system of social insurance, social support, and socialassistance. Currendy, the ILO has more than 172 Conventions on itsbooks with 5500 ratifications, and it has achieved some success in securingcompliance with ratified Conventions. However, overall the efficacy ofILO Conventions appears to be weakened by the principally voluntarynature of ratification and compliance (Deacon 1997, 73-77; ILO website2000).At a regional level, the European Union has included a social dimensionvia the Charter of the Fundamental Social Rights of Workers of theEuropean Union comprising free movement of workers and social securityfor migrant workers, equal pay for men and women, health and safetystandards, and the requirement to establish a social dialogue withemployers and employees.According to Deacon (1997, 79-81), the EU has laid the basis for aregional social policy and forms of social protection, although some toutedinitiatives have been frustrated by the existence of global economiccompetition, the non-binding status of the Social Charter, and politicalconstraints such as the Maastricht Treaty which limit fiscal expansion.Whilst the EU does not endorse social democratic policies of high taxationand income redistribution, its dominant Christian democratic orientationalso rejects the claims of neo-liberalism.Other regional and global groups against neo-liberalism include thecharities Oxfam, Cafod, and Christian Aid.Oxfam International is a network of eleven aid agencies that work in120 countries throughout the developing world. Oxfam has been highlycritical of the structural adjustment policies of the IMF, and has called forreforms to ensure the IMF becomes part of the global poverty-reductioneffort (Oxfam 1999).CAFOD is an international Catholic relief agency which funds projectsin Africa, Asia and the Pacific, Latin America, the Caribbean, and EasternEurope. CAFOD has been a strong advocate of debt relief, and has calledfor the halving of global poverty by the year 2015. Another supporter ofdebt relief is Christian Aid, the official relief and development agency of 40British and Irish churches (CAFOD website 2000).International Campaigns against Nee-LiberalismIn recent years, we have seen the growth of what Brecher & Costello(1994, 8) call 'globalisation from below', which is a form of globalisation128Globalisation and the Welfare Stateinvolving actions by ordinary people, grass-roots movements, and thoseconcerned for the goals of social justice, human rights, and environmentalsustainability. Technological advances such as the Internet have opened upopportunities for not only the powerful, but also the disadvantaged, to actmore quickly and effectively on an intemational basis.One remarkably effective campaign has been that of Jubilee 2000, aninternational coalition of religious groups, trade unions, and aid agencieswhich seeks the cancellation of the unpayable debt of the world's poorestcountries by the end of the year 2000. Over 22 million signatures havebeen gathered in support of the campaign including 382,000 fromAustralia. During the recent Global Week of Action, about one millionpeople took part in demonstrations around the world.Recently, US President Bill Clinton agreed to cancel 100% of the $5.7billion owed by the poorest countries to the United States. Overall, about$108 billion worth of debt relief has been promised by the G8 - theworld's leading industrialised countries Oubilee 2000 website). Thisoutcome has been strongly criticized by New Right think tanks such as theCentre for Independent Studies (See Harper et al1999).Another remarkably successful campaign has been the internationalmovement against the signing of the Multilateral Agreement onInvestment. Activists worldwide led by over 600 non-governmentorganisations from 67 countries have demanded that any agreementincorporate high labour and environmental standards (Chomsky 1999;Goodman 2000; V amey & Martin 2000).Lobby Groups for the Welfare State;\ range of consumer groups, professional associations, and welfarefi!obby groups have also been involved in national and sometimesinternational campaigns to defend and extend existing welfare states.Social work associations have been involved in campaigns for socialjustice at both national and international levels.For example, the International Federation of Social Workers (IFSW)was formed in 1956 as an international organisation of professional socialworkers. The IFSW takes a particular interest in the promotion of humanrights via liaison with Amnesty International and other human rightsorganisations. The IFSW makes representations to governments, and alsopublicises cases of social workers whose rights have been violated orthreatened. Other associated organisations include the International129Philip MENDESAssociation of the Schools of Social Work, and the International Councilon Social Welfare (Lyons 1999; IFSW website 2000).All over the world, self help and conswner groups have been formed todefend and expand welfare entidements. Unemployed groups have beenparticularly active. For example, Gager (1998) discusses the emergence oflarge movements of the unemployed in France, Germany and otherEuropean countries. These groups have demanded (with some success)increases in social security payments. A nwnber of local unemployedaction groups also exist in Australian rural and country areas (Mendes1999).National welfare lobby groups include the British Child Poverty ActionGroup, the New Zealand Council of Christian Social Services, and theCanadian group, Campaign 2000 (Whiteley & Winyard 1987; Walker 1997;Popham et al 1997). In Australia, a nwnber of groups have been activeincluding ACOSS, the Brotherhood of St Laurence, and the churches.The Australian Council of Social Service (ACOSS) is the peak lobbygroup of the non-government welfare sector in Australia, and acts as theprincipal voice of low income and disadvantaged people in social andeconomic policy matters. ACOSS was formed in 1956, and aims toeliminate poverty and create a more just society by tackling the causes, notjust the symptoms, of disadvantage (Mendes 1996).The Brotherhood is a Christian organisation founded in 1930 by FatherGerard Tucker, an Anglican Priest, to address the problems ofunemployment, homelessness, and the inner city slwns during theDepression. The Brotherhood emphasizes structural change and a fairerdistribution of income in order to promote a socially just society.A nwnber of other church-based groups have also used Christian socialteachings to emphasize the responsibility of government to redressstructural poverty and inequality (Mendes 1997b).Arguments for the Welfare StateMost welfare states were introduced in the 1930s and 1940s toalleviate the immense social injustices existing within free marketcapitalist systems. These inequities were typified by the mass poverty andunemployment of the Great Depression.The welfare state is based on the notion that people require social rights(social and economic resources, opportunities and powers) in order to alsoexercise their formal political and legal rights. However, if left to the130Globalisation and the Welfare Statemarket, the inequitable distribution of resources would restrict thefreedom of those worst off.A nwnber of commentators such as Cox (1995), Cass (1996), Brennan(1998), Goodin et al (1999) and Mishra (1999) argue that the welfare statehas been successful in preventing destitution, and reducing poverty amongparticularly vulnerable groups such as the sick, the aged, sole parents, andthe unemployed. Overall, the welfare state has been effective in alleviatingthe worst extremes of market-based inequalities, in promoting theautonomy of those without alternative sources of income, and infacilitating social cohesiveness and inclusion rather than social exclusion.To be sure, the welfare state has righdy not escaped criticism fromprogressive sources. Marxists have criticized its contribution to reinforcingthe institutions and values of capitalist society, and its failure to resolvesignificant social inequalities. Feminists have criticised the welfare state forits patriarchal nature, and reinforcement of traditional gender inequities.Neither of these criticisms necessitates the abolition of the welfare state.Rather, they suggest a need for the expansion and improvement ofexisting welfare benefits.Current Welfare Trends and Future DevelopmentsThe above discussion suggests the growing involvement ofinternational organisations in national social policy debates.It also suggests that currendy neo-liberal forces and argwnents arefar more influential than their critics. This is confirmed by the increasinglycommon trend towards what Shin has called 'business-friendly socialpolicy' (Shin 2000).Nevertheless, as noted by Mishra, there remain significant differencesbetween the declining social standards in English-speaking countries, andthe continuing commitment to social protection in other OECDcountries. Tills suggests that the impact of economic globalisation on thewelfare state continues to be at least pardy mediated by political andideological forces.However, Mishra still identifies an overall trend towards neo-liberalideas and policies, an argwnent confirmed by Marcuse's (1996) descriptionof increasing policy convergence between the traditionally moreinterventionist Australia and the USA. All governments appear to fear thatprogrammes to combat poverty and unemployment through higher socialspending will provoke speculation against the national currency, or131Philip MENDESdisinvestment by foreign firms.In Australia, for example, nwnerous business leaders and commentatorshave argued that Australia must reduce social expenditure in order to beinternationally competitive. As noted by Wiseman (1998, 69), there hasbeen a gradual narrowing of discussion of alternatives to neo-liberalpolicies due to a belief that such ideas would be vetoed by the internationalfinancial markets. Both Labor and particularly Liberal Governments havefollowed the general international trend of introducing measures whichtighten eligibility criteria and controls for unemployment benefits, andincrease incentives to become self-reliant (Wiseman 1996b).Members of the Howard Liberal Government have explicitly welcomedglobal economic pressures as a means of justifying proposed cuts to socialexpenditure. For example, Treasurer Peter Costello has spoken of the needto more closely align Australia's tax rates and social spending levels withthose of Australia's Asian trading neighbours (quoted in Wiseman 1998,64).Similarly, the government's National Commission of Audit argued thatAustralia cannot maintain current levels of social security benefits. Theyrecommended that the government take action to moderate communityperceptions about the role of government in income support, and soreduce government activities solely to the provision of law and order, andthe support of those in need (Officer 1996).The discussion around the fiscal effects of increased life expectancy (theso-called demographic crisis) on social expenditure is particularly indicativeof this narrow political trend.International organisations such as the World Bank and theOrganisation for Economic Cooperation and Development suggest adoubling or tripling of health and pension expenditure and other forms ofcare for the aged by the year 2040. Similarly, the Australian Commission ofAudit suggested that future increased expenditure on Australia's ageingpopulation would cause a massive budget deficit unless action was takento reduce social expenditure (Officer 1996, xv & 123-146).Yet other local authors argue that there is no reason why a reversal ofpolicies towards early retirement, and overall increased labour forceparticipation cannot offset the costs of increasing nwnbers of olderpeople. They also suggest importantly that this debate has been hijackedby neo-liberals who see demographic change and associated globalpressures as an opportunity to reduce social protection (Hamilton 1996,36; Mitchell1997, 55-56; Saunders 1998, 20-21).132Globalisation and the Welfare StateFactors contributing to Welfare RetrenchmentProbably the strongest factor contributing to retrenchment is theabsence of a viable alternative model or strategy for managing theeconomy and distributing social benefits.As noted by Mishra (1999), the collapse of communism and the declineof social democracy has removed any external or internal politicalchallenge to the domination of free market ideas. Capitalist systems nolonger fear potential revolutionary threats from labour movements or thedisadvantaged. Consequendy, governments have far less political incentiveto address questions of social injustice.A second factor is the considerable resources available to free marketlobby groups, and their strong influence on key opinion makers in thepublic service, media and political parties. For example, local commentatorFred Argt (1998) has documented the strengthening alliance betweenbusiness, finance and the policy elites (senior politicians, ministers,minders and bureaucrats) in favor of economic rationalist ideas.Internationally, organisations such as the IMF and the OECD alsoremain key influences in favor of neo-liberal agendas of expenditurereduction, and labour market deregulation. Their views are clearly reflectedin the Maastricht Treaty requirement to limit government borrowing in theperiod leading up to European Monetary Union which explicidy mitigatesagainst social protectionist policies.Factors against Welfare State ContractionAmongst some commentators (Pierson (1994), there is a school ofthought that the basic structure of the welfare state is irreversible.These critics point to the fact that although the Thatcher and Reaganregimes managed to cut back or privatise some parts of the welfare state,the overall proportion of government spending on social provisions hasnot substantially decreased. They add, however, that the crucial factor indetermining the success of attempts to cut spending was the extent ofresistance by affected constituencies.Mishra (1999) is less optimistic about this 'irreversibility' thesis, arguingthat globalisation has weakened the influence of domestic national politicson social policy, and consequendy the ability of pressure groups toinfluence policy outcomes.Nevertheless, he acknowledges that even in Anglo-Saxon countries, a133Philip MENDESsubstantial part of the social structure of social provision remains in place.In addition, social expenditure as a percentage of GDP has not decreasedin most countries, and most European states are still involved incombatting poverty and social exclusion (See also Nordlund 2000). Eventhe British Blair Government has promised to end child poverty in 20years.However, Mishra (1999) argues that these statistics should be treatedwith caution, noting that the growth of unemployment and familyinstability means that a larger social expenditure is necessary simply tomaintain minimum standards. Further, considerable expenditure is beingdiverted to increased social problems associated with unemployment suchas family violence, alcoholism, depression and illness. Jordan (1998)similarly argues that an increasing proportion of the welfare budget isbeing spent not on helping people, but rather on contro~ surveillance,compulsion, and correction.Despite these arguments, there is evidence that national andinternational pressure groups are having some success in policy debates.Mishra (1999), for example, refers to trade unions (particularly in Belgium,France, Italy and Germany) as a bulwark against substantial welfareretrenchment. In the USA particularly, aged lobby groups have been highlyeffective in defending social security pensions. Extra-parliamentary protestmovements have also succeeded in slowing down austerity measures.However, as Pierson (1994) notes, governments can take action to reducethe impact of such groups by defunding public interest organisations, andreducing the strength of unions.A second factor is public opinion. Consistent surveys such as Baldry &Vinson (1998), Esping-Andersen (1999) & Hirst & Thompson (1999)reveal public support for government intervention funded by existing oreven higher levels of taxation to create employment and retain socialprogrammes and benefits.Such support has led to the election of social democratic governmentsin much of Europe including Germany, Italy, and France, and in a numberof Australian States. Nevertheless, the problem remains (as noted byMishra) that electoral politics and party competition hardly matteranymore. Parties of both the Left and Right appear to be following asimilar retrenchment agenda. Those differences that exist appear to becross-national, rather than party political. It will, therefore, be interestingto see whether the newly elected New Zealand Labor Government persistswith its stated intention to reverse many of the neo-liberal initiatives of the134Globalisation and the Welfare Stateprevious government.A third factor is the increasing demand for international agencies suchas the IMF and the World Bank to become more representative,democratic, and accountable. At the very least, these agencies arebeginning to acknowledge the importance of a 'social dimension' in ThirdWorld development. Nevertheless, such changes in rhetoric do not appearas yet to have been translated into policy.A fourth and probably crucial factor is attempts to confront'globalisation from above' with 'globalisation from below'. For example,the recent meeting of the World Trade Organisation in Seattle wasconfronted with massive protests of 50-80,000 people organised by acoalition of unionists, conservationists, clerics, and consumer groups.Protesters demanded that the WTO incorporate labour and environmentalstandards into its rulings.As Mishra (1999, 72 & 129) notes, what is desperately required areinternational institutions similar to the IMF which have the power topromote and implement binding social rights at a global level.ConclusionThis article has examined the impact of globalisation on welfare states.Whilst globalisation does appear to curtail the autonomy of individualnation states and encourage trends towards lower social spending, thespeed and extent of these developments still appears to be influenced bythe political and ideological traditions of individual states. In short, theinfluence of globalisation on welfare spending appears to be detennined atleast in part by internal political choice as much as by externally imposedeconomic imperatives.In addition, supranational agencies are increasingly influencing nationalsocial policies, particularly but not exclusively in Third World countriesand the former Soviet Bloc. The future viability of advanced welfare statesmay well depend on the emergence of global agencies with the power toproscribe social rights as well as economic rights.