This is two books in one: it reconstructs the intellectual history of German social policy after WWII and it addresses fundamental issues of modern welfare statism that apply well beyond Germany. I know only one other comprehensive historical account of German social policy ideas (Kaufmann Reference Kaufmann2013), which, however, assumes a sociological perspective unlike Caldwell’s political perspective and is less detailed since it covers a larger time span, the 19th and 20th centuries. The book exposes the problems and predicaments of the welfare state in the context of capitalist development, democracy, and modernity.
Peter C. Caldwell is a U.S. historian who specialises in German and European 20th-century history. It is amazing how the author succeeds in delving deep into the minds of German thinkers and politics. The book excels by linking the great questions of social order to the specifics of institutional design of social security. The book also succeeds in reducing the complexity of the vast subject area, by concentrating on two lead formulas, “social market economy” and “social rule of law”/”social state”, and on key scholars and experts across a spectrum of disciplines and political camps. A few thinkers, like Habermas and Luhmann, will be known to a broader readership, but there are many less known thinkers that wait to be discovered by non-German scholars. The book is written in a sophisticated way, yet crystal clear and fascinating reading. Caldwell’s command of the literature and of primary sources is impressive, including rich footnotes with precise references.
What do we learn about German ideas on social policy after World War II?
The German social policy discourses in the aftermath of World War II in many ways reacted to the colossal disaster of National Socialism, the “Third Reich”: to the totalitarian rule of the state, to big business corporations that helped to install Hitler, to the moral decline, and to the preceding economic crisis. This experience led many Germans in the late 1940s to a double opposition: to big government and to big business. There was also a fierce opposition to the other variety of authoritarian government (namely, communism) which was springing up in Eastern Europe, with Germany at the frontline.
A theme that runs through the book is the consensual nature of the German welfare state, based on the convergence of heterogeneous ideational strands in welfare institutions and policies of the “middle way” (M.G. Schmidt). Germany is a centrist, not, as Esping-Andersen held, a conservative welfare regime. The diverse ideational strands included varieties of liberalism, especially the German “ordoliberalism”, Catholic social doctrines, Protestant ideas, social democracy, and influences from expert communities, especially legal experts in the fields of constitutional law and labour law and social welfare experts. The consensual nature of social policy corresponds to general characteristics of the German economy and polity: Germany is a “consensus democracy” (Lijphard) and has a “coordinated market economy” (Hall and Soskice). Germany is a country in which the two big parties have both been welfare state parties (M.G. Schmidt), unlike the UK and the US. However, the consensus on a welfare state had only emerged by the late 1950s, even though actual social policies were substantial and social spending was high. The semantics “social market economy” and “social state” (the German version of the “welfare state”) acted as broad consensus formulas that could cover diverse concepts and policy changes (“political promiscuity”, p. 14).
The book reconstructs welfare state thinking in three stages, corresponding to three stages of the evolution of the German welfare state. Accordingly, the book falls into three parts, corresponding to three (overlapping) periods of time: (1) The 1940s and 1950s were a period of political debates about the basic principles of state welfare, mirrored in analyses of the welfare state from the point of view of general theories of economy and state, advanced by economists and lawyers, with ideas partially going back to the 1930s. (2) The 1950s and 1960s were a period of institution building in the German welfare state, associated with expert ideas. (3) In the third period, the 1970s, a sizeable welfare state had been established and the welfare state appeared not only as a reaction to problems of modernisation, but also as a social structure in its own right that raised new problems. Theories developed by social scientists and intellectuals at the time showed an awareness of problems or even a crisis of the welfare state.
The welfare state is linked to ideas of social progress and individualism articulated in the Enlightenment. However, fundamental critics of the welfare state – ordoliberals, conservative lawyers, and leftist thinkers – posited a mismatch between welfare state and basic structures of modern society, especially the free market, the rule of law, and capitalism respectively. Social democrats held a more optimistic view of the welfare state as a driver of modernisation. Surprisingly the analysis culminates in two sociologists, Niklas Luhmann and Franz-Xaver Kaufmann, who stayed away both from the social democratic belief in social progress and the calls by the “Cassandras of the welfare state” (201).
We can learn a lot from Caldwell’s analysis beyond the German case.
First, the welfare state is about the structural exigencies of modern society, about modern statehood, and about the modern individual. However, we should not take the welfare state for granted. The book documents a range of radical criticism of the welfare state, from all sides of the political spectrum. In Germany, the radical critics did not prevail, but they do prevail in some other countries and feed into politics. Second, where a welfare state has been established, it has a remarkable staying power. The apocalyptic visions of cultural, economic, and/or political decline associated with the welfare state have not materialised. Third, the welfare state is a “messy” or “murky” institution (8) While Marcuse dismissed the welfare state as a “freak” between capitalism and socialism (156), Kaufmann (Reference Kaufmann2013: 25f.) sees welfare state thinking as a productive synthesis between and beyond the two great ideologies. The welfare state is also messy in terms of governance: it is not a well-defined functional subsystem of society like the economy or the political system, but a fuzzy “social sector” (Kaufmann), which lacks a pivotal mode of control like the elegant market model in the economy. Fourth, the welfare state is deeply ambivalent. There is an inherent tension between the welfare state and other key structures of modern society, especially markets, democracy, and family. The welfare state may contribute to the functioning of these structures, but may also inhibit their operation.
I see no flaws in the book, but two aspects deserve attention.
First, the title of the book, the reference to democracy and capitalism, is a partial self-misunderstanding of the author. The book is about capitalism and democracy in public debates, but it is also more generally about structures and social relationships in modern society. The reference to modern society and modernisation is explicit and pervasive in the documents analysed. Key aspects of modernisation like the role of large systems, modern statehood, “massification” (Röpke), and the alienation of the individual also matter under socialism and authoritarian governments, and also in developing countries.
Second, the analysis of theories devised by intellectuals and experts is just one way of analysing social policy ideas. In methodological terms, an analysis of the media and/or the beliefs and attitudes of the citizens (e.g. through surveys) would shed light on what Kaufmann calls “social state as culture”. The focus on culture could reveal undercurrents of German socio-political thought that may not be articulated as distinct theories by intellectuals and experts, such as the belief in the state, a concern for an organic “order” of society and the welfare state, or the reservations about social technologies.
Although the book terminates in 1989, the issues addressed remain fundamental to political debates. Since the 1990s, social protection has been expanding in the global South, and Southern debates often touch on similar fundamental questions as raised in post-WWII European welfare states. While policy research has undergone an ideational turn, there is much less literature on the ideational foundations of the welfare state at large and its history such as Peter C. Caldwell’s exemplary study. We need more of this, including cross-national comparisons, though they are particularly demanding (e.g. Petersen and Béland 2014; Leisering, Reference Leisering2021).
