Does globalisation explain the crisis in European Welfare states Essay

Does globalisation explain the crisis in European Welfare states - Essay Example There is nothing much in common between the welfare regimes of major nations in the Western Europe as they function under varieties of capitalism. Of course, globalisation has certain effects on the welfare states in Europe, especially Britain and France. The increasingly intense economic competition from the new economic giants such as India and China has undermined the capabilities of the European states in retaining their economically less viable welfare measures. However, the extent of spending cuts and reduction in welfare provisions in the United Kingdom and France shows that it is the erosion of political consensus than economic necessities driving the current ‘rolling back of the welfare state’. The paper intends to argue that although globalisation has catalysed the process of shrinking of welfare state, it is not an adequate explanation for the grand scale reduction in spending on social security. For the purpose, it would examine the major turning points in th e history welfare state in Europe such as the oil crisis, the abandoning of gold standard, erosion of post war consensus on welfare and so on. Spending Cuts Going Ideological Globalisation is not simply about economic changes. The very beginning of globalisation was marked by the collapse of Soviet Union and the consequent rise of neoliberal orthodoxy and market fundamentalism. More than the economic crisis, it is the collapse of an ideologically coherent leftist politics that helps the neoliberal governments to go on with their anti-people politics of cuts. It is especially true in the case of Britain and France as the economic polices of these countries increasingly subsidise the super rich at the expense of ordinary tax payers. One could bear in mind that how eagerly the government in Britain bailed out big banks at the time of recession. It is ironical the same governments do not find funds for conserving vital community services such as schools and hospitals. In France and Brit ain, it is not difficult to see that economic polices are predominantly favouring the finance capital and speculators. The increasing homogenisation of political parties in terms of economic polices too is a reason for the rolling back of welfare regimes. For instance, in Britain, both the Labour party and the Conservative party prefer the same course correction measure to ‘recover’ the economy. Needless to say, such economic policies are derived from neoliberalism and Washington Consensus which ideologically opposes any kind of subsides to the poor and the weaker sections of the society. Globalisation has helped the transnational consolidation of elites who want to divert the economic resources for the welfare of the rich. Once could call it socialism for the rich and capitalism for the poor. This consolidation is especially facilitated by the rise of far right groups in the United States, Britain and France. The Floating Currencies The invention of floating currencies was the beginning of the making economic globalisation. On August 15, 1971, the United States withdraw from the Bretton Woods system and it marked the end of Gold Exchange Standard. Here, the US dollar achieved the status of the exchange standard and became a floating currency. Britain also had to switch to floating system. Then, most of the countries of the West had followed the same. The difference is that in the new system each currency has to constantly fix