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Social Policy in Capitalist History
Social Policy in
Capitalist History
Perspectives on Poverty, Work and Society
Ayşe Buğra
Emeritus Professor of Political Economy, Bogazici University,
Turkey
Published by
Edward Elgar Publishing Limited
The Lypiatts
15 Lansdown Road
Cheltenham
Glos GL50 2JA
UK
EEP BoX
Contents
Acknowledgementsvi
Conclusion 184
Bibliography 192
Index 210
v
Acknowledgements
This book is based on my lifelong academic work in the fields of development
economics and social policy. The questions addressed in the book emerged
during my empirical studies on social policy change in countries without
mature welfare states, with special reference to the case of Turkey, and they
were pursued in a theoretical frame developed through my years of teaching
on theories of social policy, work and workers in a historical perspective, and
perspectives on equality and difference at Bogazici University in Istanbul. The
book owes a great deal to my students; it is largely their interest in the subject
and their perceptive and interesting questions and comments which gave me
the idea to write this book.
The book was written at a difficult period for Turkey, my country, and
my family in particular. I would like thank Alex Pettifer, Editorial Director
at Edward Elgar Publishing, without whose encouragement and support it
would have been impossible for me to carry out the project. I would also like
to thank the anonymous referees for their positive response. I am grateful to
my colleagues Volkan Yılmaz, at Ulster University, and Osman Savaşkan, at
Marmara University in Istanbul, who have read, criticized and commented on
the manuscript.
vi
Introduction to Social Policy in Capitalist
History
Social Policy in Capitalist History is an inquiry into the relationship between
capitalism and social policy. The book approaches social policy as a response
to socioeconomic tensions and conflicts brought along by the dynamics of
capitalist development and investigates the nature of this response in the way
it reflects and to a certain extent shapes the characteristics of the world of work
and socioeconomic life in societies integrated in the capitalist world order.
A historical overview of the ideas and politics of social policy is presented in
a discussion framed around the interrelated questions of ‘poverty’, ‘work and
employment’, and ‘membership in society’. In this overview, the approaches
to these questions in debates on social assistance, labour market regulation
and provision of social security and services are examined as an area where
it is possible to see a mutually constitutive relationship between the attitudes
toward social policy intervention and the imaginaries of society where the
terms of participation of different groups in society are approached from dif-
ferent perspectives. Ideas on the place of the poor and the working population
in society pertain to the broader question of the terms of co-existence in society
in a way to determine the ways in which membership in society is conceptual-
ized. Not only class positions but also differences of gender, age or conditions
of health and disability affect the way individuals participate in society, and
they are addressed in debates where inequality is accepted or problematized.
In this book, the continuity and change in the types of social policy-related
problems addressed and the way they are interpreted is examined in a long
time span by tracing the origin of modern social policy back to the period of
massive transformations in the early capitalist societies of Europe without
the common divide between the earlier forms of poverty relief and the later
measures of social insurance and social service provision. Although some
forms of support to people faced with ‘social risks’ such as old age, disability,
ill health or poverty could exist in all societies, what is discussed in this book
is the modern social policy interventions introduced by political authorities
and shaped by the conflicts and alliances between different segments of the
population through the expansion of capitalist relations and the formation of
labour markets. While slavery and different forms of bonded labour are inte-
gral elements of the history of the capitalist world economy, it is the problems
1
2 Social policy in capitalist history
of work, poverty and the terms of participation in society associated with the
rise of ‘free labour’ which are central to the modern social policy debate. This
book follows the historical history of this debate from its sixteenth-century
origins to the present in today’s advanced capitalist countries and includes
the approaches to social policy through structural change and socioeconomic
transformation in developing countries since the post-Second World War
period.
The book does not have the ambitious objective of presenting a dynamic
analysis of the changing social policy interventions and institutions through
centuries. It rather aims to place the ideas on social policy in the wider context
of capitalist transformations where societies are affected by the commercial-
ization of agriculture, the changes in the sectoral composition of production,
technological and organizational innovations or the changing patterns of
integration in the capitalist world economy. It follows the trends toward
the commodification of labour and the emergence of new forms of poverty
through these transformations and examines their appraisals in societies where
they were taking place. These appraisals are found in policy debates and social
analysis, as well as in fiction or cinema, and they constitute this book’s area
of investigation of the ideas on the impact of capitalist transformations on the
work and livelihoods of people which reflect different imaginations of society
and social cohesion. This historically grounded investigation follows a chron-
ological order as described by the detailed outline given below.
The idea to write this book has emerged during the health and economic
crisis caused by the global COVID-19 pandemic. The pandemic has revealed
a series of serious problems which have been affecting the lives and liveli-
hoods of people throughout the world in the pre-pandemic international order.
In this environment, critical debates on economic globalization1 have acquired
a new relevance and, either explicitly or implicitly asked, the question whether
the end of the pandemic would be followed by the return to ‘business as usual’
or the crisis could be expected to have a transformative impact on the global
economy and perhaps instigate the advent of a ‘different type of capitalism’
has come on the agenda.2
Many of the problems revealed by the pandemic pertain to social
policy-related issues such as the precariousness of work and income, rampant
inequalities in living conditions or the inadequacies of the systems of health,
education and social care. State-provided social security has acquired a crucial
significance in all societies faced by these problems, and this has shed a new
light on the debates around the welfare state and drawn attention to the impor-
tance of social policy intervention in developing country contexts. In this
environment, in a briefing on the future of the welfare state in the post-COVID
world in the Economist magazine it was stated that ‘the pandemic has forced
a re-evaluation of the social contract’.3
Introduction 3
a mass of living labour powers was … thrown onto the labour market, a mass which
was free in a double sense, free from the old relations of clientship, bondage and
servitude, and secondly free of all belongings and possessions, and of every objec-
Introduction 5
tive, material form of living, free of all property; dependent on the sale of its labour
capacity or on begging, vagabondage and robbery as its only source of income. It
is a matter of historical record that they tried the latter first, but were driven off this
road by gallows, stocks and whippings, onto the narrow path to the labour market.10
Nevertheless, his analysis of the dynamics of the double movement has wider
historical relevance for an investigation of the politics of social policy. In
the mercantilist age of government-regulated economies, the economy was
far from being conceived as an autonomous domain separated from politics.
However, national wealth and economic development were important con-
cerns, and as capitalist development proceeded the appeal to ‘the natural laws
of the economy’ have become increasingly important in providing support to
the commodity treatment of labour much before the nineteenth century devel-
opments discussed by Polanyi. The trends toward commodification of labour
have been present through the history of capitalism. Braudel, for example,
observes that the labour market was not a creation of the Industrial Revolution
and writes that the idea that labour is a commodity like any other was already
discussed by Hobbes.13
At the same time, the claims for the introduction of different types of social
protection mechanisms against market expansion have never been absent. In
sixteenth-century European cities where poverty came to be considered as
a social problem, assistance to the poor was accepted as a responsibility which
lay municipal authorities had to assume by considering the moral as well as the
social and economic foundations of a stable society. In his impressive book on
the history of poverty, Geremek writes that from the emergence of early cap-
italism onward ‘modern views on poverty are all united by a common thread:
the conviction that the proper role and duty of the poor, the condition for which
they are naturally fitted, is work’.14 However, the tendency to reduce people
who are in a position to earn their living by working to ‘labour power’, which
is inherent in capitalism, was accompanied by the reality of mass poverty
which constituted a threat to social stability and informed the criticisms of
a society where those ‘who are naturally fitted for work’ remain idle and des-
titute for reasons which are beyond their responsibility. The effectiveness of
the measures taken to prohibit begging and to punish vagrants were questioned
and they were criticized on moral grounds. In the following centuries, the
co-existence of poverty and wealth, deepening inequalities or the deplorable
conditions of work of large groups of people have continued to form part of the
discussions on social justice in societies where capitalist progress proceeded.
The bourgeoisie, as Marx writes, continuously changes the productive
process and socioeconomic relations and this presents a threat to security
and social standing of large segments of the population both privileged and
underprivileged. Accumulation of capital is guided by the profit motive, and
the pursuit of economic interests would normally involve continued access to
a supply of cheap labour and the resistance to sharing the profit income with
other members of the society. However, through the history of capitalism these
interests, which position the bourgeoisie against protective legislation, have
required reconsideration in light of the threats to social stability presented by
8 Social policy in capitalist history
An all too narrow conception of human interest must in effect lead to a warped
vision of social and political history, and no purely monetary definition of interest
can leave room for the vital need for social protection, the representation of which
commonly falls to the persons in charge of the general interest of the community
– under modern conditions, the governments of the day. Precisely because not the
economic interest, but the social interest of different cross sections of the population
were threatened by the market, persons belonging to various economic strata joined
forces to meet the danger.16
Politics of social policy is shaped by this vital need for social protection which
political authorities in charge of the general interest of the community have
to address. It might be possible to approach social policy in its ‘legitimating
function’ along the lines of the Marxist structuralist theories of the state where
the state is seen to be in charge of assuring the survival of the capitalist order
by considering the objective of legitimation along with the requirements of
Introduction 9
The problem of poverty and the characteristics of the world of work – and the
close relationship between the two – have been central to the modern social
policy debate. Poverty as the condition of people unable to live by working
has always existed in all societies in different periods of history, but the
importance and the nature of poverty have not been the same across societies
and historical periods. Unemployment or precariousness of employment, low
wages and miserable conditions of work have not affected all working people
in the same way. Diversity has always been a characteristic of the working
population. In Capital, Marx gives some workforce statistics which show that
‘agricultural labourers’ and the ‘servant class’ together largely outnumber
the workers in manufacturing and mining with bitter comments on the large
number of ‘modern domestic slaves’ in the industrial English economy.18 In
the neoliberal era, we have seen the rise of new patterns of employment where
independent contract work, or workers having the status of self-employed
rather than employees of an enterprise, have become widespread in the ‘gig
economy’ or ‘platform economy’, and introduced a new element of diversity
in the world of labour.19 Apart from the difference in sectors and types of
employment, the diversity of skills as well as that of gender, ethnicity or race
have always been important.
This book follows the change and continuity of the ideas on the challenge
capitalist expansion presents to working people and to the society without spe-
cifically addressing the questions pertaining to particular ways in which differ-
ent groups of workers are affected by this challenge. Hence, immigrant labour,
which is an element of the diversity of the workforce and a major contentious
issue in contemporary politics and policy, does not form a separate subject in
this inquiry. Instead, the movement of workers to the city from the countryside
or between different regions and countries is regarded as an integral part of the
10 Social policy in capitalist history
Though I have said …. That all Men by nature are equal, I cannot be supposed to
understand all sorts of Equality: Age and Virtue may give Men a just Precedency;
Excellence of Parts and Merit may place other above the Common Level; Birth may
subject some, and Alliances or Benefits others; to pay an Observance to those whom
Nature, Gratitude or other Respects may have made its due.27
All men were said to be equal in the sense that they all have an equal right
to their natural freedoms without being subjected to the will and authority of
other men, but the society was seen to be necessarily unequal given the differ-
ences between the individuals in it.
12 Social policy in capitalist history
In Locke’s argument, although private property does not conflict with but
appears as the extension of natural rights to the property in the fruit of one’s
labour, it is also mentioned that the right to property is bounded by the right of
all to subsistence and could not be used without regard to the obligation to act
so as to serve the preservation of all mankind. With the advance of capitalism,
the natural right to subsistence has begun to be overshadowed by the impera-
tive of economic development. In the mercantilist era, the availability of a large
supply of cheap labour was presented as a prerequisite of success in interna-
tional trade relations and hence the wealth of the nation. The affirmation of the
laws of supply and demand had increasingly introduced a sense of inevitability
to the discussions on poverty and the criticism of existing poor relief systems
had marked the social policy debate in the eighteenth century. However, it was
also in this century that Adam Smith’s fierce criticism of the mercantilist polit-
ical economy precepts came with observations on the inequality and injustice
of the existing relations between workers and their employers and a perception
of poverty as a threat to the vital human need of participation in society. Smith
wrote that a society where the majority population is in poverty could not be
a flourishing and happy one. He regarded inequality as stemming not from the
individual characteristics of people, but from their position in the division of
labour. According to him, division of labour forms the basis for the wealth of
nations, but he also expressed concerns about its impact on the mental capabil-
ities and social aptitudes of the working population.28
Smith was writing for a human society, but his crucial influence on the
development of classical political economy could not be said to include his
insights on poverty and the inequality of class relations. Through the eight-
eenth century the systems of poor relief continued to be challenged and in
England the commodity status of labour was affirmed by the New Poor Law of
1834. However, the commodity treatment of labour continued to be contested
in the context of the nineteenth-century market-dominated capitalism.
With reference to the case of England, E. P. Thompson (1978) writes that
the movement from the eighteenth- to the nineteenth-century field of force has
taken place with the weakening of ‘the old paternalism–deference equilibrium’
and the bonds of reciprocity in the old society.29 As will be discussed in the
second chapter of this book ‘On equality, class and classical political economy
precepts’, in England and elsewhere the imagination of a society held together
by unequal ties of reciprocity between the privileged and the underprivileged,
the rich and the poor or the worker and employer has not fully disappeared
from the social policy debate. It appeared in the conservative criticisms of
capitalist development, but was also implicit in the appeal to private charity or
organized philanthropy often found in the economic liberal arguments against
social legislation.
Introduction 13
However, the policy environment of the nineteenth century was shaped with
two revolutions in the background. With the Industrial Revolution the world
of labour had gone through a massive transformation. As Thompson writes, ‘It
is neither poverty or disease, but work itself which casts the blackest shadow
over the years of the industrial revolution’.30 Conditions of work in industry
and the dismal state of the working population was problematized not only
by socialists, but also by politicians and writers in different positions on the
political spectrum. With the rise of an industrial working class, the preoccupa-
tion with poverty and social assistance to the poor began to be dominated by
concerns about work.
At the same time, the French Revolution, with the ideas of citizenship and
citizenship rights, was an important element in the perceptions of class rela-
tions. In the French Constitution of 1793, it was stated that ‘The law knows no
such thing as the status of servant: there can exist only a contract for services
and compensation between the man who works and the one who employs him’.
However, with the idea of equal citizenship affirmed, the necessarily unequal
relations inherent in the free contract relation between the worker who has to
sell their labour power to be able to survive and the capitalist employer neces-
sarily introduced a new tension in the perception of social cohesion. ‘Natural
rights of all to subsistence’ could hardly hold without a redefinition of ‘rights
in society’ and this called for a reconsideration of the meaning of equality in
its relationship with socioeconomic differences. The claims of the rising indus-
trial working class were now expressed in a language of rights characterized by
the complementarity of political and socioeconomic demands. The question of
women’s rights would also enter the debate introducing yet another dimension
to the relationship between equality and difference.
The tension between rights claims and the affirmation of the commodity
status in a market-dominated capitalist order shaped an environment in
which what Polanyi calls the countermovement appeared in different political
manifestations. In England, a series of factory laws were introduced to limit
the length of the working day and to prevent the ruthless use of child labour.
The imagination of social cohesion in traditional societies informed the con-
servative attacks against the precepts of classical political economy, but the
observations of some conservative politicians and writers on the miserable
state to which the working population was reduced could be as radical as those
Marx made in his analysis of capitalist exploitation. Conservatives were not
always backward-looking in their perspectives on their views on alternatives to
the existing labour market relations. In France, not only the utopian socialists
but also Louis-Napoléon Bonaparte, the ‘lumpen emperor’ in Marx’s 18th
Brumaire, explored ways of organizing production where employment would
be secure and work would cease to be torture.31 In Germany, Bismarck’s social
policies were strongly marked by the objective of controlling the rise of the
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humanity in order to seek it, and does not find it; and also if he
says the wisdom (i.e. wisdom generically) to know it (‘that wisdom
is given him to know it’) he is not able (or rather not enabled) to
find it. בשלin this place is no doubt used to express a new idea, ‘for
this,’ or ‘which cause.’ The object of man’s toil, i.e. the object he has
in his labour, is to find out some method by which he may rectify
what appears wrong in the course of God’s providence: in the strict
sense of the term this is impossible. The principle which pervades
Koheleth’s reasoning is, that enjoyment, as such, is God’s gift, and
that toil is useless. Labour, however, which is distinguished from toil,
is to be done in the fear of God, and the result left to his providence.
The argument which is to follow further enforces this.
CHAPTER IX.
F OR all this ¹I
considered in my F OR with respect to
all this, I have laid
heart even to declare all to my heart that which is
this, that the righteous, to be deduced from it all,
and the wise, and their which is, that right and
works, are in the hand of wisdom, and any service
God: no man knoweth they can render, are in
either love or hatred by the hand of the Almighty,
all that is before them. and whether [an event
be an indication of His]
¹ Hebrew I
love or displeasure
gave or set either, no man knows
to my from anything he sees
heart. before him,
IX. (1.) For with respect to all this, I have given it to (אל, not
את, which the LXX. render by εἰς) my heart, and to sift out (occurs
here only, but compare chapter iii. 18) with respect to all this (but
the LXX., dividing the words differently, evidently read ולבי ראת כל זה,
which would mean, ‘when that heart was seeing all this.’ The number
of various readings――see Stier and Theile, Polyglot――show that
this passage was early one of difficulty. The rendering of
Symmachus, preserved by Jerome, ‘omnia ita statui [fort. ἔταξα] in
corde meo ut ventilarem universa,’ conveys the meaning; which is,
that Koheleth set to his heart that which is the result when the matter
is entirely sifted) which is the righteous and the wise (generic and
plural, all those things which are right or wise generally; ‘right and
wisdom,’ as we speak, is the meaning) and their works (i.e. what
they produce, or, better still, their ‘services’) are in the hand of the
Deity, also love (in the abstract), also hatred (also abstract, and גם
being repeated gives the idea of both love and hatred too) is
nothing, knowing the man (the negative belongs to the noun, not
to the verb, and so the meaning must be ‘there is no man who does
know.’ Moreover, the two nominatives absolute, ‘love’ and ‘hatred,’
are the subjects of the whole sentence, ‘as to love or hatred either,
there is no man who knows,’ or, better still, ‘to whom is made
known,’ giving the import to the participle) the whole (generic)
before them (distributive plural, any of them, equivalent then ‘to
anything which is before them’).
(2.) The whole (but all the ancient versions read here הבל,
‘vanity,’ and this makes better sense; the error, for such we believe it
to be, in the Masoretic text, was one so likely to occur, that,
considering the strong weight of testimony in favour of the LXX., and
the far better sense it makes with the context, we may well adopt it.
As an additional reason for following the LXX., we notice that the
Syriac reads ‘all that is before
him is vanity, all just as that which is to all,’ combining, therefore,
both readings together. Thus it appears that the variation in the texts
was a very ancient one. If this reading be adopted, then combining it
with the words which follow) as (or like this same) to all (the
meaning will be ‘transitoriness is exactly the same to all,’ or ‘all alike
are equally transitory.’ If, however, we retain the Masoretic text and
pointing, a good sense is made. ‘The whole is as it were to all,’
namely) a happening which is one to the righteous, and to the
impious, to the good (the LXX. add here to the bad), to the clean,
and to the unclean, to the sacrificer, and to one who has not
sacrificed; as is the good so the sinner (but general, including
things as well as persons), the forsworn as one who an oath
fears.
(5.) For the living ones are knowing that they will die (this is
an additional reason to the above, and so may be rendered, ‘but the
living are certain that they will die‘), but the dead (plural, with the
article, ‘the dead persons generally’) are not those who are
knowing anything (it is not here, be it observed, the existence of
knowledge on the part of the dead which is denied, but that, from the
author’s point of view, the dead are persons who do not know
anything: an unevangelic sense has been given to this passage by
not attending to this distinction), and there is nothing further to
them (emphatic) which is a hire (or a reward in this life accruing to
them as a recompense for their toil), because forgotten (niphal in
its usual objective sense) is their remembrance.
(7.) Go, eat (i.e. enjoy) in pleasure thy bread, and drink in
heart of good thy wine; for so in the present hath prospered the
Deity thy workings.
8 Let thy garments At every opportunity
be always white; and let let thy garments be
thy head lack no white, and the oil to thy
ointment. head do not spare.
(9.) See lives together with the woman which thou lovest (it
is to be remarked here that Koheleth speaks of a woman in the
singular; the idea thus implied is cognate with that of the white
garments, it is pure domestic love) all the days of the lives of thy
vanity (i.e. thy evanescent life) which He gives to thee (the
nominative is no doubt the Deity; but as this nominative is so far off,
the verb becomes almost an impersonal) under the sun all the
days of thy vanity (repeated); for that same is thy portion in lives
in thy toil which thou (emphatic) toilest at under the sun
(repeated, and therefore having the meaning, ‘under that same sun,’
the whole being thus strictly limited to the horizon of this world).
(10.) All which shall find thy hand in order to do (that is,
everything which it is in thy power to perform in regard of the above),
in thy might do it, because there is nothing of a work, or a
contrivance, or a knowledge, or a wisdom (all these being without
the article, and singular) in Sheol, which (is the ‘place,’ or ‘end,’
etc.; for we have in English to supply some general word here) thou
(emphatic) art going unto (the meaning is, ‘and that is whither thou
art going unto’).
(11.) I turned, and see under the sun (‘see’ is rightly joined by
the accents to the word which follows it; it is, as this formula of
introduction shows, another aspect of the same truth as that set forth
above) how not to swift is the race (מרוץ, occurs here only), and
not to mighty ones the war, and also not to wise ones bread,
and also not to prudent ones (occurs Genesis xli. 33 of Joseph,
and 1 Kings iii. 12 of Solomon) an increase, and not to knowing
ones a favour: (these three nouns, ‘bread,’ etc., are singular and
without the article, the other two are with it), for time (the
providential season, that is) and chance (occurs 1 Kings v. 4 as a
noun only; the meaning of the verb, which occurs frequently, is, ‘to
meet,’ ‘to approach’) happens with respect to (את, which the LXX.
notice by making the verb compound, συναντήσεται) all.
(12.) For also not knows (it is the verb which is here negatived)
the man (humanity) his time (with את, which the LXX. note by the
article), as fishes which may be caught (contract relative and
plural niphal) in a net, the evil one (an evil net), and like also birds
when caught in a snare (notice the difference between שנאחזים,
which is niphal participle plural, occurs Genesis xxii. 13, and האחזות,
pual participle, ‘the fishes are caught, the birds are held’); like them
are ensnared (יוקשים, see Deuteronomy vii. 25) the sons of the
Adam to a time (which is) evil, as when it falls upon them
suddenly. (It would result from this reasoning that wisdom is of no
use at all; but in order to meet this objection, Koheleth cites an
instance where it was of great value.)
13 ¶ This wisdom Nevertheless, I have
have I seen also under observed the following
the sun, and it seemed instance of wisdom in
great unto me: this work-day world, and
which appeared to me of
great moment.
(15.) and was found in it (again emphatic) a man (איש, the rest
are )אנשיםpoor (chapter iv. 13, and here only, מסכן, LXX. πένητα. The
meaning of πένης is that kind of poverty which seeks its food by
labour, and differs from πτωχὸς, which signifies a mendicant. Fuerst
gives the derivation, ס־כן, of the root, which would imply such a
meaning as the LXX. have), wise (there is no copula between these
two qualifying words. It is not a poor and wise man, but a man
economically wise――who could make his wisdom go a long way),
and saved (even) he (the turn of meaning is, that the safety of the
city was found in himself, as the embodiment of wisdom) the city
(with אתemphatic, which the LXX. notice by the rendering, δ ι α σώσῃ
αὐτὸς τ ὴ ν πόλιν) in his wisdom; and a man (not exactly ‘humanity,’
which we have seen would require the article, but ‘man’ as
representing the individuals generally) did not remember (the verb
follows the nominative), with respect to that man (את, with the
article, which the LXX. notice by σὺν, with a genitive! but in reality the
genitive is governed by the verb, σὺν being adverbial), the poor one,
even that same. (The shade of meaning given by the article is, that
mankind, as a rule, do not adequately remember, and so neither
reward, wisdom when associated with poverty. ‘The poor inventor
and his sorrows,’ have passed into a proverb.)
(2.) The heart of a wise man is at his right, but the heart of a
foolish one is at his left (the heart is really at the left side, but this
is the natural heart. Heart is however to be understood not as
meaning the understanding, but moral sentiments, which is its
metaphorical signification in this book).