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On the demise of the welfare state By Ernie Lightman Tags: British Mandate, Israel  The legacy Israel inherited from the British Mandate at independence included the emerging British welfare state. For a while, the new country built a broadly inclusive social infrastructure on this base. Today, however, government is basically limited to providing security, minimal education and health care, and not much else. Most social needs - not only those of the poor - are now met through the private market or NGOs. Israel was not alone in this loss. Canada, too, built the foundations of a welfare state after World War II, most of which is today gone. Today, the model for both countries is the United States, via increasing economic, military and sociocultural links. America, where even the term "welfare state" is viewed pejoratively by many, has always relied on the private market to meet most social needs. But the needs of the poor, the vulnerable, the elderly and the many new immigrants can never be adequately met by private means alone, and it turns out that the welfare state, notwithstanding its evident shortcomings, was a necessary and important offset to market inequities. Advertisement Indeed, the British post-war welfare state (which, too, has been largely dismantled, a trend that Tony Blair's "New Labor" adopted from Margaret Thatcher and continued) was built partly on altruism, a fundamental sense of shared caring and community, and a determination to meet certain social needs on a collective rather than an individualist basis. Much of this was grounded historically in the British experience of the Great Depression and the bombings of World War II, in which people came together in ways previously unimagined. Yet memories fade with time. The sense of social solidarity based on shared historical experience, so central to the development of the welfare state, lost its immediacy. By the early 1970s, nonwhite immigration to Britain was substantial and the willingness to pay taxes to support welfare-state initiatives dissipated rapidly in the face of the "other," with whom native-born, white Anglo-Saxon Britons did not identify. While the situation might be broadly similar in Canada, Israel has welcomed wave after wave of "others," who shared only a common religious tradition. Israelis have valued an active state role in promoting the social integration of new immigrants, and must now surely mourn the loss of this essential support. Though actual experiences of shared history fade, memory and a sense of connectedness to historical events need not necessarily weaken. We could have taught our children that shared collective responses to social needs are often preferable to individualistic solutions, that we're better off as a group than on our own. But apparently, we never deemed this important. Soon, we shall partake of the Pesach seder, in which we recall the Exodus from Egypt. Why do we remember the Exodus of so long ago, but can't value the welfare state's origins from 60 years past? There is also a fundamentally different, economic explanation for what has transpired: The forces of globalization, which have affected Canada, Israel and everybody else, have led to the systematic replacement of sovereign national decision-making by the impersonal rules of international markets. In a globalized world, there is no longer a place for publicly funded social programs. Market-based globalization has created a "race to the bottom," as countries compete for jobs and investment. Mobile capital seeks the greatest returns - meaning the lowest labor costs and lowest taxes. Any country that taxes to pay for social programs is at a relative disadvantage; any union that seeks to raise wages too aggressively faces job losses, as employers relocate to more congenial jurisdictions. This leads to a "hollowing out" of the economy: "poor jobs" for many, alongside well-paying jobs for the few, and an ever-widening gap between rich and poor. This gap approaches record levels in both Israel and Canada. The Adva Institute reports that the average Israeli works 12 years before his or her cumulative pay equals the monthly salary of the CEO of a large firm. Similarly, the 100 best-paid CEOs in Canada earned the national average annual wage by 10:33 A.M. on January 2, 2008, and continue to earn that average every nine hours and 33 minutes throughout the year. Whereas the governments of both countries have actively promoted economic policies that favor the private sector and further widen these gaps, among the Canadian and Israeli publics, there is a strong sense that, while overall economic growth is to be welcomed, the resulting inequities may be too high a price to pay. Surely we have gone too far in embracing the American market mentality when addressing social needs. Is there a way to rectify some of the damage, to challenge the dominance of the market in the social arena? Clearly the big, impersonal, bureaucratic post-war welfare state is gone, and few are crying for its return. At the other end of the spectrum, globalization has come under attack from many sources, most prominently the forces of nationalism and religious (mostly Islamic) fundamentalism. Between these extremes, there is contested terrain, room for experimentation and innovation. And it is here, in this middle ground, that new ideas and approaches toward community and collective sharing of risks and responsibilities will develop. The possibilities are numerous, and, I believe, the will to engage with the system is strengthening. Certainly, if we don't try, market hegemony in the meeting of social needs will remain triumphant by default, and those without private resources will fall by the wayside. Ernie Lightman is an economist and professor of social policy at the University of Toronto, Canada. Bookmark to del.icio.us   Not even for Natalie A Haredi actor quits Natalie Portman's latest film due to rabbis' protests. Al-Jazeera boycott Al-Jazeera slams Israeli boycott as attack on free expression.

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