Lecture 18: The Politics of Comparative Capitalism (2)

Introduction 

Last week, we discussed the socio-structural impact of globalisation on the labour market in the advanced capitalist economies of the western world.

  • Rise of the service sector
  • Occupational upgrading  
  • Job polarisation
  • Feminisation of the workforce

We concluded that this is leading to new socio-economic and socio-cultural preferences, which is reshaping the comparative politics of advanced capitalism.

On the basis of these occupational changes, I suggested that what we are observing is the rise of four different socio-class groups, with distinct preferences.

  • Business-finance professionals (often in ICT/legal accountancy/finance)
  • Socio-cultural professional (often in health care/educational services)
  • Small/medium sized firms (often in construction/farming)
  • Precariat (often in domestic private services such as retail/food/leisure)

These groups are affected by globalisation (liberalised trade, free movement of peoples, capital, goods and services), in very different ways.

Supply/demand of politics

Political economy research suggests that different occupational groups are “threatened” by the liberalisation of trade, and immigration, in different ways.

This means they will want different types of public policies from government.

If you have data on the following, you can predict a lot about voter behaviour:

  • Age
  • Income
  • Skill level (proxied by educational attainment)
  • Occupation

It is this intersection between education and occupation that shapes social class.

Socio-cultural

Political economists use a variety of indicators to analyse the socio-cultural preference and attitudes of voters, and how these are impacted by liberalisation.

These are usually captured by measuring people’s attitudes toward:

  • Immigration
  • European integration
  • Family values

Older voters, with median levels of income, but relatively low levels of educational attainment (petite bourgeoisie), usually have more conservative-nationalist values.

Socio-economic

Political economists use a variety of indicators to analyse the socio-economic preference and attitudes of voters, and how they are impacted by liberalisation.

These are usually captured by attitudes toward the state-market relationship:

  • Taxation
  • Expenditure

Business-finance professionals, with relatively high incomes, and high educational attainment, usually have a preference for less taxation.

Political economy research would suggest that socio-economic and socio-cultural attitudes intersect to produce the following preferences toward public policy:

https://drive.google.com/open?id=0B8XXih2ReeuKUzdEbmJFd012Q0ZkTlRhWWstalNnbmhLRTVz

Hence, the impact of globalisation on voter behaviour – and what type of market economy citizens want instituted (type of capitalism) – is far more complex than a simple preference for “left wing” and/or “right wing” public policies.

These intersections go some way to explaining the rise of the nationalist right.

Attitudes toward the welfare state

This becomes even more complex when we split the socio-economic variable (more/less tax) into two dimensions (type of tax, and type of expenditure).

Different socio-economic groups (the four quadrants earlier) want the government to spend their taxes (public expenditure) on very different things.

  • Social protection (social welfare state)
  • Social investment (social investment state)

Higher income voters, paying higher taxes, regardless of their preference toward taxation, generally want government to prioritise social investment, not welfare.

These different attitudes toward the “welfare state” increasingly overlap with attitudes toward immigration, leading to “welfare chauvinism”. Think Brexit.

Low-to-middle income working class voters, with relatively conservative-nationalist attitudes, and who are more threatened by liberalisation of trade/immigration, also tend to have increasingly negative attitudes toward the welfare state.

The implication is as follows:

https://drive.google.com/open?id=0B8XXih2ReeuKSWw0VlBsNDBjZ0l5alhVbEtjQ2NrSV9BVDln

Realignment of western party systems

It’s for all of these reasons that the political landscape in the advanced capitalist economies of the western world have become much more fragmented:

  • Higher parliamentary volatility
  • More political parties
  • Rise of left-libertarian parties
  • Rise of right-authoritarian parties

The political parties that have suffered the most from the socio-structural changes brought about by global liberalisation are centre-left, social democratic parties.

The parties that have benefited the most, tend to be on the political right. Why?

In response to the changing demands of the electorate, political parties will increasingly target their policies at building different electoral coalitions.

Think about this concretely in the Irish case. It gives rise to the following coalitional possibilities, which in turn, shapes the type of public policies pursued:

https://drive.google.com/open?id=0B8XXih2ReeuKX29jdTlXeFp6SHAxb1d4dHpweEZURzhBVFZZ

Note that the volume effect of jobs/voters will always be in the bottom two quadrants. No political party can form a government by only targeting one group.

In terms of tax/spend policies (fiscal policies, which are central to the social contract governing the relationship between citizens and state), the supply/demand of politics would suggest the following coalitional possibilities:

https://drive.google.com/open?id=0B8XXih2ReeuKckxISmNlVmthY3JUUkF5Q0ItdlI1S0NjdjJz

In Western Europe, research suggests that Left parties have lost political support among the traditional working class (bottom left quadrant), but have expanded their support among the professional middle class (top left quadrant).

This is often described as the “middle-class shift” in comparative politics.

Ireland

Ireland is qualitatively distinct from the rest of Western Europe in that it has not witnessed the rise of a populist authoritarian right-party.

This is partially explained by the fact that on the “supply” side of politics, it’s a left-nationalist party (SF) mobilises voters in the bottom right/left quadrants.

Ireland is also qualitatively distinct in that it never had a clear left/right divide within parliament (again, this is on the “supply” side of politics).

Ireland’s welfare state was constructed by a popular centre-right nationalist party (FF), and not a Christian Democratic, or Social Democratic party.

Conclusion

Why does this matter? For scholars of power resource theory, in particular Esping-Andersen (Three Worlds of Welfare Capitalism), the electoral foundations of working-class power were crucial to the longevity of the welfare state. This has been transformed by social change.

But despite the decline in what was traditionally called the “working class vote”, the welfare state remains in place, and it remains stable. Next week we will discuss why this is the case, with reference to the path dependent and historical effect of institutions.

The decline in working-class support for left parties has been replaced by a pro-welfare move by right-wing parties, but also partly from a leftward move among middle class voters.

The result is shifting welfare state coalitions that look quite different from those of the past.

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