A theory of predatory welfare state and citizen welfare: the French case

Abstract

In this paper, we argue that the welfare state is an outcome of modern mass (total) warfare. The total war economy requires the participation of all citizens, erasing the differences between the military and citizens. Consequently, the war economy benefits from succoring the civilian population. The total war effect explains why a predatory state undertakes welfare programs, one of the contributions of the present paper. While the welfare state is closely related to total warfare, social welfare is not. Fraternal social welfare organizations in the United States predate the New Deal and the rise of welfare state. Similarly, the French welfare system was born as citizen welfare and not as state welfare. In fact, welfare programs were initiated in 1871 during the Paris Commune by workers under the name of la sociale and were recreated as self-managed citizen groups in 1945 before being displaced by government welfare programs. A second contribution of this paper is to explore the re-appropriation effect, or the way self-managed citizen welfare was transformed into a welfare state through a three-stage reform process manifesting itself in 1946, 1967 and 1996.

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Notes

  1. 1.

    By a predatory state, we mean a state that “would specify a set of property rights that maximized the revenue of the group in power, regardless of its impact on the wealth of the society as a whole” (North 1981, p. 22). It would promote the private interests of dominant interest groups inside the state (such as politicians, the army and bureaucrats) or influential private groups with strong lobbying powers (Vahabi 2016a, b). Mainstream economics disregards such a type of state and assumes a contractual state that plays the role of social-wealth-maximizer. Does a predatory state mean a budget-maximizing state or a bellicose one? Following Usher (1992), we consider taxation to be a form of predation and budget-maximizing to be a characteristic feature of a predatory state. Predation is not inconsistent with a bellicose state, since war often has provided an excellent pretext for maximizing the state budget. Not only has the army benefited from a war economy and politicians from an uncontested political authority; some private enterprises have secured colossal rents thanks to their privileged partnerships with the state’s most influential groups. Max Weber has called it ‘booty’ or ‘political capitalism’ (Weber 1922/1968, pp. 164–166; see also Vahabi 2004).

  2. 2.

    In another vein, Ly (2007) examines charitable donations to terrorist organizations to show the symbiotic relationship of welfare and warfare.

  3. 3.

    Skocopol (1992) argues that, compared to the British or European welfare states, the United States has a maternalist rather than a paternalist welfare state.

  4. 4.

    For the data, see Overbye (1995, p. 314). According to The Economist (July 14th–20th 2018, p. 12): “Spending on ‘social protection’, such as pensions, unemployment insurance and assistance for the hard up, has risen from an average of about 5% of GDP in rich countries in 1960–20% today.” Elaborating the ascendancy of a predatory state in the United States, Galbraith (2009) also underlines that state intervention in healthcare, higher education, housing, and social security accounts for nearly 40% of US GDP. Moreover, the direct contribution of nonmilitary public spending at the federal, state, and local levels amounts to another 14% of GDP: “the United States is not a ‘free-market” economy with an underdeveloped or withered state sector” (Galbraith 2009, p. 112).

  5. 5.

    Interestingly, Herce et al.’s (2001, p. 64) test of causality between GDP and social protection expenditure in the European Union indicates the explanatory significance of citizens’ “sense of security”.

  6. 6.

    In rational conflict theory, war is regarded as part of the bargaining process to achieve peace. Accordingly, the advocates of rational conflict theory interpreted Clausewitz’s (2006/1827) ‘total’ or ‘absolute’ war as a war that never happens in reality (Sánchez-Pagés 2009). The only type of war that was assumed to be ‘rationally conceivable’ was Clausewitz’s ‘battle’ (limited confrontation) to remove misconceptions or asymmetric information between the belligerent parties. That interpretation suffers from a major shortcoming, however, namely revolutionary wars. In such wars against tyranny, the objective is the total destruction of the enemy and not in reaching a compromise. In fact, Clausewitz’s total war explicitly pertained to revolutionary wars that were effective against tyranny. He defined ‘total war’ with respect to its objectives rather than its means. For him, total war implied a war to the last, targeting the complete destruction of the enemy’s military might, its political system or even its culture. He did not describe ‘total war’ in terms of using modern industrial means requiring the mobilization of the entire society. In this paper, we are using total war in the latter sense.

  7. 7.

    Although the war ended officially in February, it continued in the east of France. “The badly devised armistice led to the destruction of the second largest French army. Immediately after the cessation of hostilities, the elections of 8 February were organized on a purely war or peace platform” (Taithe 2001, p. 178). The Third Republic established in September 1870 lasted until 1940, when France's defeat by Nazi Germany in World War II led to the formation of the Vichy government.

  8. 8.

    It should be remembered that the expression ‘welfare state’ does not exist in French. Its French translation is ‘Etat providence’, a controversial term, referring to the provision of social protection by a central state that acts as divine intervenor.

  9. 9.

    In fact, Thomas Marshall (1965, p. 82) claimed that “the experience of total war is … bound to have an effect on both the principles of social policy and the methods of social administration. But the nature of this effect will depend to a considerable extent on the fortunes of war—on whether a country is invaded or not, on whether it is victorious or defeated, and on the amount of physical destruction and social disorganization it suffers.”

  10. 10.

    See Boris (1963) for understanding the influence of the Beveridge plan on the French resistance in exile.

  11. 11.

    Bloody week refers to the week during which the Republic crushed the Paris Commune in March 1871.

  12. 12.

    For data on the evolution of the state’s expenditure in France, see also André and Delorme (1983) and Fontvieille (1976).

  13. 13.

    For example, the Lemire Law (June 21, 1907) reduced the marriage age to 21 without parental consent and defrayed marriage legal costs.

  14. 14.

    See Viet (2016a) for the case of tuberculosis.

  15. 15.

    In the French administrative system, local authorities or administrations include communes and counties.

  16. 16.

    The tax was adopted in 1914 and was first levied in 1915.

  17. 17.

    See the next section for an elaboration of the re-appropriation effect through state control of citizen welfare.

  18. 18.

    We intentionally cite an old reference from the early 1950s to show that in the aftermath of the war everyone was convinced that the state as well as the business, financial and bureaucratic elites were discredited because of their collaboration. The same point also has been underlined in Wieviorka (2013) more recently.

  19. 19.

    In April 1946, the CGT claimed 5.5 million members (Lorwin 1952, p. 526).

  20. 20.

    Social security was not an outcome of nationalization. The post-war nationalization program was a response to the wartime collaborationist attitude of many private employers. The state took control of certain companies whose owners were so discredited (Kuisel 1981). This initiative was in line with the establishment of ‘économie dirigée’ (planned economy) as a prolongation of war socialism. The problem of social security was entirely different, since workers and trade unions such as CGT had not been tainted by collaboration. Interestingly, “the CGT withdrew from the planning apparatus in 1947.… Similarly, unions lost control of the government boards of the nationalized firms in the 1950s” (Kuisel 1981, p. 259).

  21. 21.

    Ordonnances” in French.

  22. 22.

    Alain Juppé was the French prime minister in 1996.

  23. 23.

    The ministry was in charge of managing the social security.

  24. 24.

    This is an image constantly referred to in the French media pertaining to the social security deficit.

  25. 25.

    In French, CSG stands for contribution sociale géneralisée (Generalized Social Contribution).

  26. 26.

    The equivalent of NICE (National Institute for Health and Care Excellence) in the United Kingdom. The HAS dispenses reliable information about quality-certification and accreditation criteria. It draws up lists of drugs of low actual clinical benefit that are subject to de-reimbursement.

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Acknowledgements

We wholeheartedly thank our two anonymous referees, the associate editor Peter Leeson, and the editor in chief, William Shughart II of the Public Choice journal, for their excellent and constructive comments. We would also like to present our gratitude to Bernard Chavance, Bertrand Crettez, Jean-Paul Domin, Victor Duchesne, Sylvie Lupton, and Mandana Vahabi, for their inspiring and insightful remarks on earlier versions of this paper. Obviously, all the remaining errors are ours.

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Correspondence to Mehrdad Vahabi.

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Vahabi, M., Batifoulier, P. & Da Silva, N. A theory of predatory welfare state and citizen welfare: the French case. Public Choice 182, 243–271 (2020). https://doi.org/10.1007/s11127-019-00660-0

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Keywords

  • Citizen welfare
  • La Sociale
  • Predatory state
  • State re-appropriation effect
  • Total war effect
  • Welfare state