Since the second half of the 29th century, the welfare state became to play major role in life and destination of citizens. Ideally, the welfare state is responsible to maintain a system for the poor and a service system for all citrines. The welfare state also subsidizes, protects in various ways, and in time of hardship bails out both state-owned and privately owned large enterprises (Roy, and Clarke 2006). The welfare state is the largest customer, the only customer for some industries. So the welfare state does not maintain two systems, one for the poor, and the other for the rich and large enterprises. State policies and activities not only allow business enterprises to engage in new profit-generating practices and provides relief to these enterprises and governments in trouble, the welfare state preserves jobs on which vast sections of the population, directly and indirectly involved with these corporations or state authorities, depend.
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The history of the UK suggests that there are three main stages in development of the welfare state in Britain. The first stage is the welfare state of 1945-1979. The distinctive feature of this period is that political democracy would lead to economic democracy. During this period, the Britain formed National Health Service and nationalized the main industries in economy, introduced unemployment insurance and introduced public education and housing for poor. This period transformed the old and ineffective system of social provisions and developed a unified protection system form national poor. In spite of great benefits, such changes resulted in initiation of a new activity, which eventually evolves into more new functions for the state (Barr, 2000). Social security, welfare, and general services were sustained by taxes. By collecting taxes and transferring revenues back to community, the government became involved in redistributing a portion of the GNP. It is important to note that the British system of the welfare state was more effective that those introduced by the French after World War II. The weakness was that the British government was unable to retain close economic relations with their former colonies. The independent countries ruled by the British officials it more attractive to develop close trade relations with the United States, other European nations, the USSR, Eastern European nations, and, even, Japan (Culyer1993).
The necessity to create a welfare state was caused by a flux of f immigrants from former colonies. By maintaining the welfare system, the Great Britain has preserved the status quo dear to the wealthy and powerful position. During this period of time, it employed a shrewder method. It pacified the poor, while the main elements of their condition do not change. While this was true to an extent, it did not correctly reflect current reality. While new educational opportunities and open access to education, the Great Britain not only provided another entitlement but at the same time subsidizes research, supports diverse areas of cultural activity, and, in fact, not directly managed general cultural development of the nation. Also, the Great Britain maintained medical services, were involved in drug testing and license issuing, checks medical practices and remedies, restricted smoking areas, and in many other ways engaged in general health-care activities benefiting both young and old (Atkinson, 1995).
The next period of the welfare state developed took place between1980-1998. This period was marked by great economic transformations and unpopular state policies introduced by Margaret Thatcher. the main policies of these period were low taxes and weakened role of trade unions, privatization of state enterprises and reduced provision on NHS. In certain circumstantiations, enterprises established to serve societal organizations and groups developed separate, independent functions, sometimes dominating the structures that created them. The British government, in a sense, was in the process of superseding class and the other community structures that brought it into being. The conflicting interaction between people and the state under these new conditions was difficult to eliminate. Community existed, more and more, through the state, which increasingly determined all aspects of social provision. At the same time, as always, British community also existed for itself and apart from the state; regardless of state domination, community retained a separate identity. Although the Great Britain retained its capitalistic nature and many of the structural and cultural features of the poor, contemporary community operated under a different capitalism, one not only engendered in the market but also promulgated under state sponsorship (Roy, and Clarke 2006).
During the rule of Margaret Thatcher, many state-owned industries, maintained in the past to secure work places, have become disused and uneconomical; their operations were prolonged at huge cost to taxpayers. Some of these industries in Great Britain were being put out of business, some were privatized. It was a struggle for survival thus Margaret Thatcher considered privatization a matter of great urgency in order to support social services and maintain adequate social provisions for people in need. Between 1979 and 1985, the national government sold to the private sector such enterprises as British Aerospace, Cable and Wireless, Amersham International, National Freight, Britoil, Associated British Ports, British Rail Hotels, British Gas, Onshore Oil, Enterprise Oil, Sealink, Jaguar, British Telecom, British Technology Group, and other industries. In order to develop a welfare state, Margaret Thatcher decided to sell the shares to common citizens. The sale of a bulk stake in British Telecom was close to £5 billion. The most important privatization sale, of %31.5 of British Petroleum for £7.2 billion (U. S. $12.2 billion) started in 1987) (Atkinson, 2000). Using privatization as the main tool, Thatcher increased cash inflow and relieved the state and its social system from the obligation of new public-sector borrowing requirement. The Thatcher’s government continued to introduce the new functions the state acquired. Despite a reduced role of state-owned sector, the Thatcher’s government still managed the national economies of nations that followed privatization. Not even in Great Britain could the privatization of many industries “unmix” the mixed economy. the weakness was that privatized industries were simply involved in capitalist markets without a state support. The Thatcher’s government supported privatized industries only when expected them to make it on their own. The Thatcher’s government continued to run services and remained the biggest employer in the nation (Blank, 2002).
In spite of these challenges, Thatcher’s government was able to collect resources and financial costs for poor and people in need. By denationalizing some or even many state-owned enterprises, by subcontracting private enterprises, the Thatcher’s government did not abandon its new multifunctional and conglomerate position; Thatcher’s government reorganized itself into a more efficient organization. the Thatcher’s government and the state where millions of middle class citizens hold stocks, where state enterprises operated within new market conditions while remaining under state control, where the state maintained the authority to control economic policies, was still a form of welfare society (Blank, 2002).
The Thatcher’s government made a great step in development of the welfare institutions and economic support. As in the past, the extent of control an individual, group, institutions, or enterprise exerted in community was, to an extent, a function of the state power, wealth, or prestige that the social group represents; i.e., the social position one hold within a social hierarchy. Though, it was also stipulated by the changing importance of that social hierarchy in community. The extent of control exercised by a social group could not be measured. Such issue as ownership provided the privilege of state control, but other forms of control, derived from professional occupation and social status, allowing certain social groups to influence the course of society and community attitudes, were equally important. One’s position within the social strata still tended to be assessed by one’s demonstration of wealth and power, but another criterion was acquiring importance (Blank, 2002). Though apparently related to professional role and class, job represented a different principle. Its value lies not only in how much money it generates, but in the kind of activity it required and the scope of information access it provided, and the scope of social and private contacts it offered to the individual and the state. These data allows to say that the welfare state developed and supported by Margaret Thatcher was based on the value of the privileges and entitlements it brought. Under all- reforms, the class division typical of capitalist societies intertwined with growing social orders of official and unofficial positions engendered by corporate and state institutions (Atkinson 2000).
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During the Thatcher rule, the new middle class appeared determined by salaries, promotions, fringe benefits, and other support derived from labor contracts, and on individual and collective negotiations with corporations, and—more and more—the state. These employees were joining unions to protect the benefits of such collective agreements; they were concerned about adequate salaries, work facilities, promotions, and retirement schemes. In contrast to the old social class, these people cared more about job security than about credit and other problems in the state. To be sure, they too desired low interest rates, but they needed these above all for mortgage and credit payments, not to run their personal affairs (Culyer1993).
Thatcher was a representative of the Conservative Part so she did everything possible to start waged war against unions and succeeded in enacting laws restricting their control in many ways: their use of closed-shop force; their capability to arrange solidarity actions at factories other than those at which illegal behavior by managers or owners was proved. Thatcher inflicted a devastating defeat on the customarily most-powerful miners’ and printers’ unions, forcing these labor institutions to capitulate. By closing smokestack enterprises, Thatcher not only reduced expenses created by the state in maintaining them but reduced the ranks of the social class she waged war against. Historians called this period and policies the miracle recovery which ended in 3 years. In spite of great challenges and weaknesses of the policies, Margaret Thatcher created a strong welfare state able to support people in need and provide education, housing and medical services for diverse population of Britain (Blank, 2002).
The next period has begun in 1998 when Tony Blair won elections. To some extent, Tony Blair followed the strategic goals of Thatcher and support poor. Under his governance, citizens operating at low level of societal structure did not express as strong a class or group solidarity as in the past. During 1990s, British poor shared dissatisfaction with social conditions and expect the state to improve the situation and provide them with higher incomes, more security, and defense against emerging poverty. Poor strived to preserve traditions to which they were attached, but they also liked to embrace new values and ideals advocated by Tony Blair. The government gave irresolute support to institutions and caused represented by single-issue movements, rather than to institutions acting on behalf of class interests. Poor vote for parties but expected parties to advance causes postulated by environmentalists, peace activists, customer crusaders, feminist organizations, defenders of the rights of racial minorities, religious fundamentalists, taxpayers’ fighters, and so on. This period of welfare state development is not finished yet, but the society claims that the state should pay more attention to the problems of low class citizens and middle classes suffered from economic crisis and instability (Roy, and Clarke 2006).
In sum, three periods of historical development shows that development of welfare state is a contradictory process based on popular and unpopular methods and transformations. The welfare state should acquire new functions because community, while remaining capitalist, develops new demands and evolves into a new state in which it can only retain free-market relations and protects its old existence through increased national management and regulation. The welfare state has come into being not through cancellation, not through political changes proclaiming the overthrow of an old command and the enactment of a new power. Rather the welfare state in Britain is engendered within the past, hatching from the existing shell of the social organization of community. The democratic principles ad traditions create equal rights to pursue happiness, self-fulfillment, social status, and accomplishment outside the institution of family.
Atkinson, Anthony B. 1995, Incomes and the Welfare State: Essays on Britain and Europe, Cambridge: Cambridge University Press.
Atkinson, Anthony B. 2000, The Economic Consequences of Rolling Back the Welfare State, London: MIT Press.
Barr, Nicholas. 2000, The Economics of the Welfare State, 1st edn., London: Weidenfeld & Nicolson, and Stanford, Calif.: Stanford University Press.
Blank, Rebecca. 2002, (ed.), Social Protection versus Economic Flexibility, Chicago: University of Chicago Press.
Culyer, Anthony J. 1993, ‘Health Care Insurance and Provision’, in Nicholas Barr and David Whynes (eds.), Issues in the Economics of the Welfare State, London: Macmillan, 1993, 153-75.
Roy, S. Clarke, J. 2006, Margaret Thatcher’s Revolution: How it Happened and What it Meant. Continuum International Publishing Group Ltd.; 2nd Revised edition edition.