Welfare System in the Socialist Order

(1)

NII-Electronic Library Service

Welfare

System

intheSocialist

Order

Hiroya

HIRANO

Saitama

Prefectural

University

Abstract

This

paper

aims atunderstanding welfarc

in

thesocialist order cornprehensively and systernatically.

With

three

ana-lyticalconcepts,

i.e.,

socia]

_policy,

economic _po]icy, and societal

_policy

which consists of the

formcr

two,welfare wus

examined as a

kind

of socio-economic system, a"wetfhre

system".

In

the

socialist order, socictal

_policy

had

the _grand

_purpose

of creating a new society to rcalizc

"the

well-being of

the

_people".

However,

due

tocoincidence of

financial

crisis and

increasc

in

thenecessity of social

_policy,

theconflict

between

socia}

_policy

and economic

_policy

increased,

As

a rcsult.societal

_policy

became

difficult

to

_pursue

its

_purpose.

so thatthe

_purpose

was reduccd toa limitedarea of social _policyand

gost

its

_priority.

This

meant

the

collapse of the welfare system,

[`The

well-being of the

_people"

in

thesocialist order was undoubtedly the ideology and

the

_purpose

to

be

achieved

in

the

initial

stage,

but

its

realization

failcd

halfway.

KeyWords

Socialist

Order,

We]fare

System,

Social

Policy,Economic Policy,

Societal

Policy

1lntroduction

Over

fifteen

years

has

already

_passed

since a

lot

of socialist orders collapsed

in

Soviet

Union

and

Eastern

European

countries.

Now

these

countries

have

proceeded

on

their

new way steadily.

Nonetheless

this

article argues welfarei

in

the

socialist order2 existed

in

the

_past.

Why

should the socialist order

be

examined

nowadays? This

_point

needs

to

be explained here.

One

reason

is

that

_the

significance of welfare

in

the

transition

of

_{post-socialist}

countries

have

not

adequately

illuminated

_yet.

I

have

argued

the

function

of social security systems

during

the

transition

based

on the case-study of

Central

European

Countries

including

Polapd,

Hungary

and

Czech,

and

brought

out some

_points

below.

First,

social security systems

in

the

transition

_period

have

inherited

many characteristics of

the

systems constructed

in

the

former

Socia]ist

order.

Second,

through

the

transition

_period,

have

helped

smooth

implementation

ef

eco-nomic

_po]jcy

by

_promoting

efficiency of

the

economy, so that

they

contributed

to

acccleration of transition

towards

the

new order

(Hirano

2004).

Thcse

findings,

however,

are not satisfactory

because

_the

_transition

_is

not an event

in

a moment

but

a

leng-term

_phenomenon

continuing

from

the

co]lapse of

the

old order

to

the

construction of the new order.

Therefore,

to

advance

this

study,

the

in

the old order

needs

_to

be

illuminated.

Another

more

important

reason

is

that

examining

the

in

modern society

is

a

universal

_question

beyond

_private

interest.

This

exami-nation

leads

to

illustrate

what welfare

in

the society

actually "is",

and

discuss

what it"should

be".

And

it

is

necessary to

demonstrate

the

_positive

significance of

welfare inthe social order

fbr

definitizing

the necessity of welfare

in

modern society.

In

this

_point,

the socialist

(2)

-1-order, which

_pushed

_propaganda

such as "realization of

the

well-being of

the

_people",is

a valuable subject

fbr

this

study.

However,

very

few

studies

fbcused

on

the

signifi-cance of welfare

in

the socialist order.

While

most of

foeused

on reviewing

detailed

content of social security systems,

few

studies examined

the

systems comprehensively and systematically3.

More-over,

though

many studies concentrated on a

_particular

content

in

social security systems such as social

insur-ance system

fOr

employees", some studies

_pointed

that

other

_policies

and social conventions whose

function

were equivalent

to

social security systerns

had

existed

in

the

socialist orderS.

This

indicates

that

_the

examjna-tion

from

a

broad

_perspective

beyond

is

necessary

for

understanding

the

significance of welfat/e

in

the

order.

At

the

same

time,

this

shows

the

limit

of

_previous

studies which resulted

in

description

and explanation of social security systems.

In

this article, as a

_preliminary

work

for

examining

the

in

the

socialist order,

it

is

aimed

to

construct

the

analytical

framework

for

it.

Specifically,

from

a comprehensive and systematic

perspective,

I

reinterpret as one system,

both

formal

institutions

and

informal

arrangements, which

function-ally substitute or complement

formal

ones and analyze

it.

Afterwards, Iexamine how

this

system changed,

In

what

fOllows,

thisanicle consists of four

_parts.

Firstly,

I

explain

three

analytical concepts: social

_policy,

economic

_policy

and societal

_pelicy,

Secondly,

by

using

these

concepts, Iexamine welfare system in

the

social-ist

order and

illuminate

characteristics of the system.

Thirdly,

I

demonstratethe change of thissystem by two ecenomic

_phenomena

and one sociological one,

And

lastly,

I

summarize

this

anicle with some

limits

and

problems,

2 Analytical

Concepts

and

Framework

As

I

mentioned above, welfare

in

the

socialist order

had

consisted not only of social security systems

but

also of other

_policies

and social conventions which are

functionally

equivalent

to

the

systems and complement

or substitute them,

All

these

various arrangements are regarded as"welfare

system" as awhole in

this

article.

We]fate

system

is

divided

to

two

_parts,

say, "formal

sector" and "infbrmal

sector".

While

"formal sector" means

formal

welfare

institutions

and

_policies

such as

social security systems, "infbrmal

sector" corresponds

to

interdependence

and mutual aid

in

familial

relations and

local

communities.

In

the

former,

it

includes

broad

spectrum of

_policies.

This

derives

from

the

fact

that

in

the

socialist order the main

_purpose

is

realizing the well-being of the

_people,

so that various

_policies

cemplexly relates

to

realization of

the

_purpose`.

This

relationship

between

_policies

was examined

by

a

Hungarian

sociologist, Zsuzsa Ferge.

Ferge

was one of

the

few

researchers who anaiyze

formal

welfare

institutions

and

_po]icies

in

the

social-ist

order comprehensively and systematically.

She

reviewed various

institutions

and

_policies

which

had

implemented

in

Hungary

since

World

War

2,

and systemize

them

by

using

two

concepts: "social

policy"

and "societal

policy"

(Ferge

1979).

She

defined

societal

policy

as `It

compasses

the

sphere of socialpolicy

(the

organization of social services or

the

redistribution of

incomes),

but

also

includes

systematic social

interven-tion

at all

_points

of

the

cycle of

the

reproduction of

social

life,

with the aim of changing the structure of

society'

(ibid:

13),

It

can

be

said

that

societal

_po]icy

is

the

one

that

reconstruct

the

existing society radically

for

realization

the

well-being of

the

_people.

At

the

same

tirne,

social

_po]icy

was

located

as a

_part

of societal

policy,

and

defined

as a short-term deviceto solve cur-rent social

_problems

so

that

it

could shorten

the

_period

which was required

fbr

realization of societal

_policy

as

a

long-term

device

(ibid:

47).

The

characteristics of

two

(3)

lable

1The

Characteristics

of Social Policyand

Societal

Policy

SocialPolicy

SocietalPolicy

Target

SocialProblems

Societyitself(producingsocialproblems)

Perspective'

Short-Term

Long-Terrn

ImpaetonthestatusquoConseryative _{/Transformative}

Priority

Low

_High

ScopeofIntervention

Ti

-DistributionmainiyIi/tli6PdO.i,"tt,S..OIDRiC,7,riObd."tl:i.O:.CdY8Le.::klftei..)

Sovrce/Ferge(1979>

According

to

her

definition

that

societal

_po]icy

includes

systematic social

intervention

at all

_points

of

the

cycle of social

life,

that

is,

_production,

distribution

and consumption,

it

is

suggested thateconomic

_policy

is

included

as other

_parts

of societal

_policy.

In

other

words, societal

_policy

consists of social

_policy

and

economic

_policy.

Moreover,

social

_policy

and economic

policy

are mutually compternentary and united

system-atically so that societal

_policy

can

have

consistency as one

_policy.

This

_point

is

exemplified by

the

fact

that

the

socialist order employed a

form

of command economy

and controlled economy

_politically.

The reason

for

rein-terpreting

various welfat/e arrangements

in

the socialist

order as a

broader

"welfare

system",

beyond

social security systems,

derives

from

these

characteristics of societal

_policy.

Welfare

system

in

the

socialist order

is

a kindof socio-economic system whose

_purpose

is

real-ization

of

the

wel]-being of

the

_people.

It

substantively

establishes

the

state of society as a whole;

its

influence

is

wide-ranging and crucial.

Three

concepts above,

that

is,

social

_policy,

economic

_policy

and societal

_policy

are very usefu] as

analytical concepts forunderstanding "welfare

system".

In

this

sense academic contribution

by

Ferge

should

be

high]y

appreciated.

However,

the relationship among

three

concepts needs more consideration.

As

Ferge

assumed

in

her

study,

if

social

_policy

and economic

policy

are always mutual]y complementary, and as the result societal

_policy

keeps

consistency as one

_policy,

welfate systern would continue to operate stably.

None-theless,

the socialist order actually collapsed at

last.

If

welfare system substantively establishes

the

state of

society as a whole,

it

would

be

_possible

that

_problems

happened

in

this system

had

a critical

impact

on

the

collapse of

the

socialist order.

Therefbre,

the

assump-tion above must

be

reexamined

in

demonstrating

the

changing

_process

of weLfare system.

Consequently,

in

the

fo11owingchapters, using "social

_policy",

'`economic

policy"

and "socjetal

policy"

as analytical concepts,

I

examine welfare system

fbcusing

especially on

the

relationship among the three.

3 Modeling

"Welfare

System"

In

this

chapter, as a

first

task,

I

model the

_prototype

of welfare system and examine the relationship among

its

components

in

detail.

As

I

mentioned above, welfare

system

is

divided

to two

_parts:

_fbrmal

sector and

infor-mal sector.

The

former

corresponds

to

societal

_policy,

and

it

divided

further

_to

_two

_policy

domain

of sociaL

policy

and economic

_policy.

On

the other hand,

the

lat-ter

corresponds

to

informal

welfare arrangements

in

the

cornmunal society,

in

concretc

terms,

interdependence

and mutual aid

in

familial

relations and

local

communi-ties.

Social

poticy

domain

in

the socialist order

is

basi-cally almost

the

same as that

in

_the

capitalist order.

This

includes

the components

_generally

nominated as social

policy:

income

maintenance,

_personal

social services,

health

care, education,

housing

and so on.

Economic

policy

domain

includes

nationalization or socialization

of means of

_production

and

directcd

p]anning

economy7 under which

_price

control and

full-employment

are

implemented,

according

to

basic

_principles

in

the

socialist order.

Now,

base

on

these

definitions,

let

us consider

the

relationship among

the

three

factors:

social

_policy,

economic

_policy

and

informal

arrangements

in

the

communal society.

Firstly,

economic

_policy

has

(4)

-3-relationships bothto social

_policy

and tothe communal society,

but

the

state of each relationship

is

contrastive.

For

social

_policy,

economic

_policy

is

functionally

complementary, or

in

some cases, substitutive

in

that

the measures such as wage control,

_price

control and

full

employment

have

functionsnot only as a means of

planned

economic management

but

also as a stabilizer of the

_people's

lives.

On

the other

hand,

for

the

com-munal society, economic

_policy

is

transformative

in

that

collectiyization of agriculture, which

derives

from

nationalization or socialization of means of

_production,

leads

to

have

a

large

number of

_populations

as

redun-dant

labor

force

detached

from

their

local

communities and as a result

their

local

communities are obliged

to

break

down.

This

impact

can

be

_particularly

more

significant in

the

case of

the

countries where agriculture

workers consist mostly of

the

_population.

In

this

_point,

economic

_policy

has

the

function

of transfbrming the

communal society.

Secondly,

for

economic

_policy,

social

_policy

is

functionally

complementary

in

that

itcorrects negative

effects of economic

_policy.

Negative

effects amount

to

income

inequality.

This

_point

seems

to

be

inconsistent

to

the

assumption of affiliative relationship

between

social

_policy

and economic

_policy.

But,

the

two

is

not essentially conflictive

because

income

inequality

happens

by

distribution

according

to

one's

labor

under

inadequate

_productivity

in

the socialist society, which

is

the

transition

_phase

towards

the

communist society.

And,

indeed,

social

_po]icy

is

financially

dependent

on economic

_policy.

Meanwhile, for

the

communal society, social

_policy

is

complemented by

it.

This

is

caused

by

the

fact

that

formal

welfare

institutions

in

the socialist

order tended

to

target

only employeesS.

However.

the

functional

complement of

the

communal society

to

social

_policy

_gradually

weakens because

the

]ocal

corn-munity, which substantively canies out

the

function

of

the

communal society

breaks

down

by

_production

implemented

as

part

of economic

_policy.

Based

on consideration mentioned above

concern-ing

the

relationship among

the

three

factors,

the

prototype

of welfare system ismodeled as Figure

1

.

Figure

1The

Prototype

of

Welfare

System

The

characteristics of

the

_prototype

of welfare system are summarized as

fOur

_principles

below;

1

.

The

first

_priority

inwelfare system is

implementing

tion

which

is

one of the measures under economic

policy.

This

derives

from

basic

principles

of

ism.

2. Social

_policy

and economic

_policy

are mutually

complementary.

3. Social

_policy

and economic

_policy

are

_parts

of

etal

_policy,

respectively.

This

_principle

is

premised

(5)

4. The

communal society complements or substitutes

social

_policy

functiona]ly.

_But,

as nationalization

or sociaiization of means of

_production

is

mented,

_the

communal society

loses

its

function.

In

other words, operation of economic

_policy

_prevents

the

communal society fromcarrying out

its

function

for

social

_policy.

In

this

prototype

of welfare system,

it

is

important

that societal

_policy

exists and eperates

for

its

united

purpose

of realizing

the

well-being of

the

_people.

This

is

thc

most remarkable characteristic of welfare system

in

thc

socialist order.

At

the

same

time,

these

principles

indicate

the

consequence of this welfare system,

In

this

system, as

development

of nationalization or socialization of means of

_production

implemented

as

parts

of cconomic

_policy

weakens

the

complementary or substitutive

function

of

the

cornmunal society

for

social

_policy,

the

functional

necessity of social

_policy

inevitubly

is

increasing.

Increase

in

the

functional

necessity of social

_policy

requires

increase

in

funding

for

it

_provided

from

economic

policy,

accordingly.

Therefore,

economic

_growth

which offers

its

funding

is

a

_prerequisite

for

the survival of welfare system.

However,

in

the

case of cconomic

depression,

economic

_po]icy

is

_getting

difficult

to complement

social

_policy

financially

and

functional]y,

and as a

result, social

_policy

becomes

dysfunctional,

Especially,

if

economic

depression

happens

at

the

stage

that

nation-alization or socialization of means of

_production

has

substantively

developed

and

the

functional

necessity of

social

_policy

has

been

increasing,

thisconflict

becomes

quite

significant

fbr

the

welfare system.

This

situation means substantive

dissolution

of societal

_policy.

In

this

sense, economic

_growth

is

essential

for

the welfare

systern.

In

any case,

_performance

of economic

_policy

has

a dccisive impacton

this

system.

These

are

basic

structures of

the

_prototype

of

the

welfare system.

4 Demonstrating

the

collapse

of

the

fare

system

Now,

let

us

demonstrate

_the

changing

_process

of

the

welfare system

by

some actual

_phenomena.

As

the

phenomena

associated with

the

welfare system, two economic

_phenomena

and one sociological

phenom-enon are lmportant.

One

of the economic

_phenomena

is

stagnation of

economic

_growth.

In

Soviet

Union

and

Eastern

Euro-pean

countries, economic

_growth

began

to

decline

as

early as the

_tate

_1950s.

_Since

_then

thistrcnd

deyeloped

and at

last

became

a social

_problem

as economic

depression

from

the

late

1960s

to the early

1970s`'.

Though

opinions

have

been

diyided

on

this

economic

depression,

_persuasive

explanation was

_proposed

by

a

French

econemist,

Marie

Layigne.

Lavigne

explained

that

economic

depression

in

the

socialist order was caused

by

the

limit

of "extensive

growth"

and the

failure

of "intensive

growth"

(Lavigne

1999).

Her

ex-planation

indicates

a series of

_process

_that

_the

economy was excessively centered on

heavy

industry

sector and

it

caused

inefficiency

of

the

economy, and subsequent

promotion

of economic efftciency resulted

in

failure.

In

what

fo11ows,

I

overview

this

_process

according to

hcr

explanation.

Excessive

concentration on the

heavy

industry

sector

in

the

economies of

Soviet

Union

and

Eastern

European

countries was caused

by

the

implementation

of economic

_policy

which centered on

industrialization.

Lavigne

explained

this

as

below.

In

_the

socialist

coun-tries

at

that

time, where most of the

_population

were agriculture workers,

implementation

of

_princip]es

of

socialism,

including

_production,

would

_proyoke

strong antipathy

from

them.

_To

avoid

this

and

justify

coercive

col-lectivization,

"industrialization

model" was

formulated.

In

this

result, redundant

labor

force

in

agriculture

sector was coercively

displaced

toward

the

industry

sector, and

the

construction of new

industrial

_plants

and the

development

of natural resources were

_put

into

practice.

These

brought

about

high

economic

_growth

in

the

socialist order.

But,

_this

method culled "extensive

(6)

-5-growth"

is

very wastefu1

in

that

it

aims

for

economic

development

by

external massive capital

input.

Ulti-mately, thismethod

leads

to exhaustion of

hurnan

and material resources, and

industrialization

_policy

comes

to a

deadlock.

In

this situation,

for

increasing

produc-tiyity

of laborand capital and

improving

efficiency

by

technological

_progress,

various attempts were applied.

These

series of economic reforms are called

"intensifi-cation".

Howeyer,

even this

intensive

_growth

strategy couldn't salyage the situation, so thesocialist order

_got

into

trouble

with chronic economic

depression

(Lavigne

1999:

49-55).

The

other

is

shadow economy.

Shadow

economy

appeared as a substitutive

because

formal

economy

fell

into

depression

and

failed

to

fu1fi11

its

function.

While

the

appearance of shadow economy was

beneficial

to

the

_people

in

that

it

_provided

_goods

and services instead

of formaLeconomy, itwas

harmful

to

fbrmal

economy.

The

relationship

between

formal

economy and

shadow economy was analyzed

by

Feher

and

his

col-leagues

(Feher

et

al.

1983).

According

to

their

explana-tion,

in

the

socialist order,

there

were

three

types

of

economic mechanism called "three

economies";

that

is,

"first

economy"

(command

economy), which operates

based

on the

_planning

_principle,

"second

ecenomy"

(shadew

economy), which operates

based

on

the

market

_principle,

and "third

economy"

(personal

and

informal

relations of assistance among members of

the

bureaucratic

apparatus), which operates

based

on the

principle

of

_generalized

reciprocity and exchange of

re-ciprocal services, Additionally, Feherand hiscolleagues

mentioned

the

relationship among

three

economies

and concluded

that

while

first

economy controlled

by

planning

was a

dominant

and

legitimate

system,

for

deve!opment

of second economy material resources

had

to

be

"jl]egally"

provided

from

first

economy

through

third

economy, so

that

this

would

inevitably

cause

the

decline

of firsteconomy

(ibid,:

99-105).

Their

conclusion

indicates

not only that there was

negatiye correlation

between

command economy and

shadow economy,

but

also that there was a

kind

of spiral

that

with shadow economy

developed,

comrnand economy would

decline

and

the

need

for

shadow economy wouLd

increase

more.

While

the

failure

of

economic

_policy

mentioned above was one of

the

internal

causes

in

economic

depression,

the

appear-ance of shadow economy

is

external one.

Shadow

economy subsequently continued to expand and

kept

permanently.

And,

the

_government

authority connived

at

it.

As

a result, shadow economy

became

known

as

the

_phenomenon

specific

to

the

socialistorderiO.

As

sociological

_phenomenon,

there

was

advance-ment of urbanization. As mentioned aboye, under the

situation advancing nationalization or socialization of

means of

_production

as co]lectivization of agriculture,

degree

of demographicshift

from

rural areas

to

urban areas was

inevitable.

However,

because

demographic

shift was coercively

_promoted

by

industrialization

policy,

the urban

_population

turned out to surpass

the

rura] one

in

as

few

as several

decades.

These

are

demonstrated

by

some

_previous

studies.

According

to

Korosi

and

Wnuk-Mpinski,

associated

with change of social structure

in

Polandand

Hungary

after the

World

War

2,

especially

in

the

late

1940s

and

the

early

1950s,

demographic

shifts

from

rural

areas

to

urban areas

in

the

two

countries were

led

by

coercive collectivization

in

rural areas and "extensiye"

industrialization

in

urban areas

(Korosi

and

Wnuk-Lipjnski

1983:

36-39),

And

Rimlinger

_pointed

out

that

from

1928

to

the

early

1950s

while eollectivization of

agriculture advanced

in

Soviet

Union,

demographic

shift was coercively

_promoted

by

the

same reason

mentioned above, and vecational

training

for

labor

force

transferred

from

rural areas was a main

issue

in

contemporary labor

_poliey

(Rimlinger

197

1:

270-27

1

),

Such

a

drastic

change on

the

demographic

structure

led

to

new

_problems

both

in

rural areas and

in

urban areas,

In

rural areas,

the

_younger

generation

continu-ously transferred

to

urban areas for becoming industrial

workers and resulted

in

aging the rural

_population.

This

brought

about not only an economic

_problem

such as

decline

in

agricultural

_{productivity,}

but

also a sociological

_problem

that

interdependence

and mutual

aid

in

familial

relations and

local

communities

became

dysfunctional

by

disappearance

of

its

bearer'i.

And

in

urban areas,

housing

_problems

were

brought

about

because

of continuous

influx

of

labor

force,

and

then

(7)

people's

lives

ljke

income

maintenance,

healthcare

and

social services remarkably

_grew.

Each

phenomenon

mentioned above, which occurred

frem

the

late

1960s

to

_the

early

1970s

coin-cidentally, must

have

been

a

_prob]em

respectively

for

However,

_the

coincidence of three

phenomena

hasmore

important

implications.

Economic

depression

in

cornmand economy,

development

of

shadow economy, and

the

negative spiral

between

the

two

leads

to

a

decline

in

_gevernment

revenue.

Mean-while, rapid urbanization

increases

_{proportionately}

the

necessity of social

_policy,

and

this

accompanies

inevitably

an

increase

in

_government

expenditure.

Consequently,

the socialist order

turns

to

confront

the

conflict

between

financial

crisis and

increase

in

the

ne-cessity of social

_policy.

This

is

the

core of

the

_problem.

Moreover,

the

conflict results

in

decline

in

the

real

value of soc{al

_policy.

This

_point

needs

to

be

explained

in

detail

by

using

the

model of welfare system.

The

first

_principle,

that

is,

_production

was

justified

as the

first

prior-ity

by

economic

_policy

centered on

industrialization

("industrialization

model"), and

implemented,

The

second

_principle

that

social

_policy

and economic

_policy

are mutually complementary was maintained as

long

as

economic

_growth

continued.

But

as economy shifted to a

depression,

social

_policy

changed

into

the

burden

_to

economic

_policy

and

the

relationship

betwecn

two

poli-cies

turned

to

be

conflicting. As a result, societal

_policy

lost

its

entity as one

_policy

with a united

_purpose,

so

that

the

third

_princip]e

would

be

failed.

Additionally,

the

fburth

_principle

intensified

the

confiicting relation-ship

between

two

_policies

because

an

increase

in

the

necessity of social

_policy

by

imp]ementation

of this

principle

placed

an additional

burden

on economic

policy.

This

situation can

be

cai!ed as

the

crisis

_phase

of welfare system, and ismodeled as Figure

2. functionally

subs rces outflow

i-･

Societal

Policy"

_i

i

i il

.

-

t

l

-

i

il

･

t

--

t

l

e

i

-

t

-

t

'i

i

[,LZC.re.fS,k",5.)

>s,;;l::

l;ilil,

.C,il,,,,f,

[fi".",7g,1"')

i

l

-...t--t-t-t-ttt-t-ttt-t-tt...t.--ttt---ttt---t-t---t-...t-t-t-t-t-tt----t---tt...---tt--t-tt--ttt--:

Figure

2 The

Crisis

Phase

of

Welfare

System

In

this

phase,

welfare system

has

transformed.

At

first,

as a

logica]

consequence

in

the

operation of

this

system, developmentof socialjzation or nationalization

of means of

_production,

which was implementedas

_part

of economic

_policy,

changed the communal society, so

the

functional

necessity of social

_policy

increased.

This

cmerged as the sociological

_phenomenon

such as

de-mographic shift

from

rural areas

to

urban areas.

In

the

result, the

function

which

had

been

carried out

by

the

communal society

transferred

to

social

_policy.

This

is

the

functionalsubstitution

by

social

_policy.

Meanwhile,

the

economic

_phenomenon,

such as shadow economy,

(8)

was

the

autonomous sphere

developing

independent

of the

_goyernment,

These

_phenomena

like

transforma-tion

from

the

communal society and

development

of autonomous sphere, can

be

regarded as

the

beginnings

of

_primary

civil society'2.

However,

_the

development

of

'

shadow economy

inevitably

led

_to

outflow ofresources

from

command economy controlled

by

_government.

This

worsened economic

depression

further

and made

welfare system

dysfunctional.

Accordingiy,

the conflict

happened

between

social

_policy

and economic

_policy.

In

concrete terms,

the

conflict rneans coincidence of

financial

crisis and

increase

in

the

necessity of socia]

policy,

Due

to

this

conflict, societal

_policy

lost

itsentity as a

_policy

with a united

_purpose,

and

the

real value of social

_policy

declined,

This

has

a very

important

implication:

collapse of welfare system.

Did

welfare system

inevitably

collapsed?

There

is

no

doubt

that

there

are a

lot

of causes of

the

collapse.

Nonetheless

it

seems to

be

aceepted that the major

cause

is

economic

depression.

On

this

_point,

the

resu]t

of

this

study shows

that

economic

depression

derives

frem

artificial eauses,

that

is,

_government

failure.

Government

failure

indicates

'`industrialization

modeli',

an economic

policy

centered on

industrialization.

Like

most countries under

the

socialist erder, if

the

_principle

of socialism such as nationalization or socia]ization of means ef

_production

implemented

in

the

agricultural countries, some sortof measures absorbing redundant

labor

force

must

have

been

necessary.

But

"industrial-ization

model"

is

no more

than

one of

the

options

for

the

measures and never

inevitable.

Even

if

extensive

economic

_po]icy

typified

by

"industrialization"

was effectiye

in

achieving economic

growth

earlier,

it

was

clear that this measure eventually would reach a

limit

in

terms

of

finite

resources, and

there

was no

deubt

that

this

measure was

temporary.

Consequently,

"industri-alization model"

brought

about

both

rapid economic

growth

and

subsequent

economic

depression.

Finally,

based

on examination mentioned above,

]et

us consider

the

stateof "well-being"

in

the

socialist order.

It

was an ultimate

_purpose

and

ideal

of

the

order.

This

was

true

at

least

when

the

socialist order started.

The

_purpose

and

ideal

are represented

in

the

existence

of welfare system, a broadwelfate arrangements which

inc]uded

the whole

_policy

domains

and covered the

society as a whole.

However,

its

rea]ization

fi"ustrated

halfway.

Societal

_policy,

whose

grand

purpose

was creating new society,

lost

its

entity as a

_policy

by

the

confiict betweensocial

_policy

and economic

_policy,

and

the

ideal

of realizing

the

well-being of

the

_people

was reduced

to

social

_policy,

one of

the

_policy

domains,

Here

"well-being"

transformed

from

the

absolute value

in

the socialist order to one of various yalues.

For

the

socialist order which "well-being" had been

its

ultimate

purpose

and

ideal,

the

frustration

of itsrealization was

quite

a disappointingresult.

5 Conclusion

In

this

article,I

have

examined

the

organization of welfare and

its

change systematically and

comprehen-sively

by

using the analytical mode] "welfare

system".

In

the

resutts,

it

became

clear

that

thc

confiict

between

social

_policy

and economic

_policy

happened

by

the

failure

of economic

_policy.

Therefbre,

the

_purpose

of socialism such as realization of

the

well-being of

the

people

becamc

impossible

to

achieve.

Additionally,

in

regard

_to

causes

for

the

failure

of economie

policy,

artificial causes were

distinguished

from

inherent

ones.

It

can be said

that

these

_prove

the

validity of

the

analytjcal model.

Howeyer

some

limits

and

_problems

remain to

be

examined

towards

elaborating

this

study,

First,

the

causes

for

the

failure

of economic reform are

to

be

figured

out. Resultsof this study

indicate

the

causes for economic

depression

were artificial.

But

if

the

govern-ment successfully overcomes economic

depression,

it

would not result

in

the

collapse of welfare system.

Therefore,

the

causes

for

economic

depression

and the

ones

for

the

failure

of economic reform must

be

consid-ered separatety.

In

regards

to

the

causes

for

the

failure

of economic reforrn ,the

fact

that

business

managers in

command economy

have

inefficient

and conservative

tendency

is

indicative.

This

tendency

could

be

called

"the

built-in

risk-aversioni'

'3

(Lavigne

1999]

54),

and

appeared as a

form

of "over-fu11

employment"

(Holz-man

1976)

or managers'

_preference

forroutine

(9)

produc-NII-Electronic Library Service

tion

making

the

_plan

easier to

implement

(Berliner

1976).

TherefOre,they

have

been

regarded as one of

the

causes

_preventing

economic reform

towards

efficiency

enhancement.

Like

this

example,

if

the

mechanism

of command economy

inevitably

brought

about

this

tendency

to

businessmanagers working

in

it,economic

reform

towards

efi'iciency enhancement would

have

been

extremely

dit:flcult

to

be done.

This

_point

needs to

be

examined

in

detail.

Second,

the

function

of shadow economy

is

_to

be

figured

out.

As

mentioned above,

if

the relationship

be-tween

social

_policy

and economic

_policy

became

con-fiictive

and welfare system turned

_to

_be

_{dysfunctional,}

the supply of

_goods

and services essential to

_people's

lives

would

have

stopped and

in

some cases

their

lives

would

have

collapsed.

But,

actually,

the

_people

barely

maintained

_thcir

lives.

This

indicates

_that

there were

other supply routes

informally

except

the

formal

one.

Shadow

economy

is

one of

the

_{possibilities.}

In

this

article,

I

examined the

dysfunction

of shadow economy

which made economic

depression

worse,

but

shadow

economy essentially

has

the

function

of satisfying

the

demand

which

doesn't

be

satisfied

in

formal

command

economy.

This

eufunction of shadow economy

has

important

indications

not only

for

economic

_policy

but

also

for

social

_policy

because

_goods

and services

supplied

in

shadow economy

have

_great

impact

on

the

people's

lives.

In

this

sense, additional examination of

shadow economy needs

to

be done

for

heightening

the

relevance of

this

study.

Finally,

Iet

me explain

the

_possibility

of

this

study.

The

confiict between economic

_policy

and social

_pelicy

showed

in

this

article

indicates

not only

the

conflict

over

finance

and

function

but

also the one over value

lying

behind

them.

In

other words, the conflict

is

the

one betweenefficiency and well-being. Under

the

crisis

phase

of economic

depression,

efficiency was empha-sized

in

economy and as a result

the

conflict

happened

with well-bcing, which was

the

essential value

in

the

socialist ordcr.

This

confliet

brought

about

the

collapse

of societal

_policy

and

the

reduction

to

social

_policy

of

function

realizing the well-being of

the

_people.

In

this

sense, the conflict

happened

at

the

very

fundamental

level.

This

situation

has

a similarity with "Welfare

_States

in

Crisis",

the

situation which

happencd

after

the

1970s

in

the capitalist order

in

_point

of

its

time

and composition.

Thomas

H. Marshall,

a Britishsociologist

and one of

distinguished

scholars

in

studies of welfare state, expressed welfare states

in

crisisas "Hyphenated

Society",

which consisted of

democracy,

welfare, and capitalism. And

he

concluded as

below

about

the

problem

in

"Hyphenated

Society".

"The _trouble

_is

that

no way

has

been

found

of equating aman's value

in

the

market

(capitalist

value),

his

value as a citizen

(demo-cratic value), and

his

value

fbr

himself

(welfare

valuc)"

(Marshall

1972:

30).

His

conclusion seems

to

apply

to the socialist order which confronted

the

crisis with the value confiict

between

social

_policy

and economic

policy.

In

this

_point,

there

is

expected

to

be

_possible

for

comparative study of

thc

two

orders under

the

same analytical

framework.

The

analytical approach

in

this

article seems

to

havc

a

_potential

toapply to

both

orders

in

that

itanalyzcs social orders as one system

in

which

welfare

is

one of the components.

At

_the

same

time,

this

approach

_provides

new opportunity

to

reexamine the

difference

between

the

two

orders, which

have

been

exp]ained

by

historical

differences

or

from

ideological

perspective.

Development

of such comparatiye studies

of the two erders must contribute

to

elucidation of

the

significance

of

welfate

in

the

socialist order.

It

is

also

necessary to

illuminate

how

transformation

of welfare system

had

an

impact

on

the

socialist ordcr.

They

will

be

discussed

in

another anicLe.

Notes]

In this artic]e, the term `welfarci

means

kind

of

mcnts which

_practiccs

rcciprocal exchanges or redistribution

of

_goods

and services according to one's needs,

_formally

and informally.

Therefore,

in

some cases

it

means

forma]

institutions,

in

other cascs itmeans informal arrangernents

orconventlons,

'

]

In

thisarticle, theterm

`socialist

order'

is

uscd only

for

Soviet

Union

and

Eastern

European

countries. Therefore this

term

doesn't

include the countries such as

China

and

Cuba.

However,

in

my opinion, theanalytical model inthis ttrticlc

has degree of applicability tothesecountries,

This

_point

is

examincd

in

another artic]e.

By way ot'exception, studies

like

Ferge

Cl979),

Mishra

(l981)

and Dcacon

(l983)

arc rcrnarkable.

Based

on

(10)

4 s 6 7 s y [{)

theeretical

deliberation

on therelatienship

between

social-ism

and social

_policy,

each study critically examined social

policy implemented

in

thesocialist countries.

These

are

highly

valuable

for

considering thesignificance of welfare

in

In

Japan,

Fiijita

(1985)

examined the

significancc of social

_policy

in thesocialLst order,

but

most of

its

contents were

devoted

tothecxplanation about

institu-tions and there was

almost

no serious considcration.

As

studies about socia] security systems insocialist countrics

in

Japan,

Shiokawa

(

1985),

Shibata

(1989)

arerepresentative of thcm. Each researched elaborately transition of social security systems, and analyzed

its

background

minutely.

However, the significance of the systems

in

thesocialist order and

its

impact

on other

_policies

were hardlymentioned atall.Cichon

(1997)

mentioned thatcconomic

_policy

functioned

as implicit social security under thesocialist ordeT.

And

Komorita

_(1998),as

regards independent farmers inPoland,

noted

that

their

lives

had

remained to

be

under theselfihelp

principte

(ibid/

244).

Bottomore,

a

Bri

tishsociologist who was

famous

for

studies about

Marxism,

noted

that

as regards wclfare

in

thesocialist order, welfare

is

abig component of nationa]

_products

and

actually an unique

_purposc

of whole

_process

of

labor

in

a

breader

sense

(Marsha]1

and Bottornore

1992).

This

indicates

thatunder the socialist order, welfare

is

the

_purpose

and

various

_pelicies

relates to

its

realization,

The

combination of socialism as

ideology

and command economy

is

not

inevitable,

However.

on account of thc

fact

every socialist country adopted cornmand economy and

basically

kept

it,

I

think

it

_plausible

thatcommand economy

isadopted as amechanism of economy inthe model.

In

socialist countries, social security, to

be

_precise.

income

security tendcd to

be

_provided

only employees.

This

tcndcncy

has

its

origin inLenin's manifesto for employee'

s

insurance

(Lenin

1941),

and

it

was the

basic

_principle

in

the socialist order, which

prefessed

proletarian

dictatorship.

But

bccausc

of

it,

self-employed workers and

independent

farmers

had

to

depend

on

interdependence

and mutual

aid

in

fatnilial

relations and

local

communities under the commu-nal society.

This

situation can

be

interpreted

thatcommunal social structure complements

inadequate

social

_policy

Dctai]s

of cconomic

dcprcssion

in

each country are omitted

due

tospace

limitations.

But

according to

Lavjgne

(1999),

economy

_gradually

slowed down,and

in

the

late

]970s

it

at-tainedzero

_growth

or what

is

worse, negative

_growth.

In

the

1980s

thetendency of economic

depression

never improved.

In

additiontothe

fact

thateconomic statisticswerc censider-ably

distorted,

it

should

be

considered the situation actually

deteriorated

more thanthe

data.

In

Japan,

Morita

(1986)

is

one of studies covering the

issues

in

shadow economy.

11

]2

i]

According

to Komorita

_(1998),

inPoland as of the early

1970s one thirdof the agricultural

_population

reached or soon would reach the

_pension

e]igibility agc.

The

term 'civil

society'

here

js

used

in

referring `The

words

"civil

_society"

name the space of uneoerced

human

associa-tionand also

the

setof relational networks

--formed

for

the

sake of

family,

faith,

illterest,

and

ideology--

that

fill

this

space'

(Walzer

1995:

7).

According

to

Lavigne

(1999),

under soeja]ist economy the

main

_priority

for

business managers was to

imptement

the plan with

least

risk.

They

tended to

hoard

thesurplus

labor

in

_preparation

for

yarious hazards specific tocentral

plan-ning

like

retooling

inadequate

_parts

and ensuring repairs and maintenance

(ibid:

_60).

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