Social Security Research Paper

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‘Social Security’ denotes both a complex of public institutions to protect individuals against common life risks and the programmatic idea that a commonwealth should provide all of its members such protection that they may feel secure within that commonwealth. This concept is broader than ‘social insurance’ and narrower than ‘welfare state,’ but relates to similar problems.

1. The Emergence Of The Concept

‘Security’ (Latin securitas) has a long-standing tradition in the political rhetoric in Europe since the Roman Empire. In early modern times it was often used together with ‘welfare’ and ‘felicity’ in order to paraphrase the duties of the prince to care for his subjects. Thomas Hobbes made ‘the safety of the people’ a central task for his Le iathan, and this idea became seminal for modern political theory and constitutional practice. Wilhelm von Humboldt (1792) was the first to distinguish clearly between ‘safety security’ and ‘welfare’: he restricted the task of the state to the provision of ‘safety security,’ i.e. on the one hand the protection of citizens’ freedom from external threats, and on the other hand the internal protection of citizens’ commitments and rights via the judiciary and police. ‘Welfare’ by contrast was now assigned to the private realm as the individual pursuit of happiness from which the state was to abstain from interfering. In the nineteenth century the idea of public safety and security became restricted to the defense and protection of individual rights, the latter becoming differentiated between security within the public realm and the reliability of legal protection. But in the twentieth century the idea of security became paramount and was related to psychology and psychoanalysis, to the theory of cognition, to industrial and technical safety as well as to social security.

The specific context for the emergence of the term ‘Social Security’ was the United States and the Great Depression. In American pragmatism ‘the quest for certainty’ was abandoned and superseded by ‘the search for security’ (John Dewey). Inspired by the ‘four wishes’ of William I Thomas, the ‘wish for security’ became a basic assumption about human motives and ‘insecurity’ a commonplace attribute of the Zeitgeist.

The invention of the expression ‘Social Security’ is commonly attributed to Franklin Delano Roosevelt or to his entourage. Roosevelt used it first in a Message to Congress on 30 September 1934 after having created a ‘Committee on Economic Security’ to prepare the ‘Social Security Act’ on 29 June 1934. However, a voluntary association promoting ‘Old Age Security’ renamed itself ‘American Association for Social Security’ in 1933 and changed the title of its journal from Old Age Security Herald to Social Security because the program of this association had been expanded from old-age pensions to all branches of social insurance (Rubinow 1934, pp. iii, 279).

In any case the expression quickly gained steam: it coined first the US ‘Social Security Act’ of 1935 (SSA). It then appeared in the Atlantic Charter of 1941, became the catchword for the Declaration of Philadelphia (1944) of the International Labour Organization (ILO) and found its way in 1948 into the Universal Declaration on Human Rights of the United Nations (Art. 22). After the Second World War ‘Social Security’ had become a leading term internationally in the programs for the development of welfare states. Its specific meaning remained vague, however.

2. Institutional Developments

At the time when the SSA was drafted, a public commitment to income maintenance for people in need was by no means a new idea. At the end of the nineteenth century two models were competing in Europe: public subsidizing of mutual benefit associations (called the ‘System of Gent’), and social insurance along the lines of the German (‘Bismarck’) Model. The British social reforms brought two new principles: payment of old-age pensions for deserving poors from the budget (1908), and flat-rate contributions and benefits in unemployment insurance (1911). In 1913 Sweden created the first universal system for securing income in old age. After the Russian Revolution the Bolsheviks drafted a comprehensive system of social protection against all major contingencies of life, following a concept which Lenin had already propagated in 1912. Starting in France (1932), hitherto voluntary child allowances of employers were made obligatory, and this ushered in a new model of administration: calling upon private bodies for the attainment of public social policy ends. Thus social insurance for dependent workers was already competing with other models of social protection. The victory of the term ‘social security’ over ‘social insurance’ was a consequence of its vague content which allowed the inclusion of all kinds of public social protection. In 1947 the ‘International Social Insurance Conference’ changed its name to ‘International Social Security Association’ and opened membership to state-administered systems (such as those of Britain and the US) which until then had been excluded.

Thus, the American SSA brought a new name but hardly new ideas. It had a problem, however, that was not present in Europe, namely federalism. The Supreme Court had long held attempts by the Federal Government to introduce measures of social protection to be unconstitutional. And it was only after a positive ruling by the Supreme Court on the SSA in 1937 that federal social policies took shape, including policies to combat the risks of the death of a breadwinner and of disability. Besides a federal system of Old-Age Insurance the SSA introduced a new federal instrument into American politics: matching grants to the states in order to induce them to abolish the old forms of the poor law, to introduce or to improve a system of unemployment compensation, and to provide better care to the blind as well as to mothers and children. Thus the hitherto strictly separated domains of the federal and state government became linked for the first time. This remained a continual subject of controversy in the American polity with lasting consequences for the structure of social protection: there exists a two-tiered system consisting of ‘social security’ on the federal and of ‘welfare’ on the state level. The first program, protecting most of the employed population, is well administered, highly stable, and positively valued. The second, providing help as a last resort, has remained an ever-contested object of repeated reforms. It is unevenly administered at the local level and its recipients remain stigmatized.

That which was innovative in the concept of social security was developed first in a report to the British Government entitled ‘Social Insurance and Allied Services’ in 1942, by a commission chaired by William Beveridge. It is the program of a comprehensi e and unified system, covering the whole population against all basic risks of life—an idea that Beveridge had already formulated in 1924. The Beveridge report met with unprecedented enthusiasm in the British population and became the blueprint for social legislation after the war.

The Beveridge report proved seminal also for the creation of the French ‘Securite Sociale’ (1946 48). But contrary to the case in the United Kingdom, the principle of administrative unification of the system met with strong resistance in France from various social groups which preferred to keep or create separate insurances meeting their specific needs and interests. In Germany only the term was received without changing the structure of the existing system. Moreover, a semantic distinction was made between the institutional (Soziale Sicherung) and the normative (Soziale Sicherheit) aspect of social security. In Scandinavia the term ‘Social Security’ was hardly received although the systems of social protection underwent substantial improvements.

Although many industrialized countries had developed measures of social protection against certain risks before World War II, their impact remained generally modest. Some groups, e.g. public servants or veterans, were privileged by public budgets, whereas industrial workers received only modest benefits out of contributions. With the exception of Scandinavia, the rural population remained mostly outside of existing systems. In most countries there existed a multitude of funds respectively designed for specific risks, groups, and localities. Repeated economic crises culminating in the Great Depression often impaired the reliability of expected benefits.

After the Second World War the new ideal of ‘Social Security’ was received differently in different countries. Almost everywhere coverage provided by existing institutions was extended or new institutions were created to protect all or most of the population against certain risks. Most countries assimilated the regulatory frameworks of different systems which covered the same risks, or integrated the systems. Finally, the risks covered by schemes underwent an international standardization. The Convention No. 102 of the ILO on ‘Minimum Standards of Social Security’ (1951) distinguishes nine forms of benefit: old-age benefits, survivor benefits, disability benefits, family allowances, unemployment benefits, sickness benefits, medical care, and maternity benefits. To be sure, most advanced industrial countries’ social protection institutions do not correspond one-for-one with that list of benefits, but today they indeed do tend to cover all of these risks, albeit with varying degrees of coverage and benefits.

From a structural perspective the institutions of Social Security form a delimited, though not everywhere equally defined system. Issues of delimitation concern the forms of benefit (in cash or in kind), of administration (centralized or decentralized; public, parapublic, or private), and of entitlement (public provision, insurance, relief), as well as the groups included (privileged or underprivileged groups are sometimes excluded) and the risks covered (family allowances, for example, are often excluded from the concept).

3. Security And Social Security As Value-Concepts

The administrative codification of Social Security as a complex of institutions which provide income replacement or benefits in kind should not obscure the fact that the success of the concept is due less to these institutions than to the value connotations of the concept. President Roosevelt evinced a keen sense of these connotations when he characterized social security as ‘freedom from want’ (6 January 1941), and when he described social security as a functional equivalent of earlier security deriving from ‘the interdependence of members of families upon each other and of the families within a small community upon each other’ (8 June 1934).

But what does security mean? And why did the concept become so prominent and pervasive in the most advanced industrial countries whose populations were more remote from serious want than any generations heretofore? Security relates to human attitudes towards the future and not the present. Insecurity does not mean an imminent danger but the possibility of future damages whose probability remains uncertain. The quest for security is a correlate to the growing complexity of society and the ensuing acceleration of social change. Thus security means not only protection, but also a subjective perception of the reliability of protection and the ensuing feeling of peace of mind. But in this psychological sense, security as self-assuredness can also mean the subjective capacity to bear the insecurity of risk. Hence on the individual level the concept of security remains highly ambivalent, and has indeed been abandoned by the discipline of psychology.

Security was also a longstanding pillar of political order which had already been incorporated into many constitutional documents and became transposed by Roosevelt into a new economic and social context. Just as government had the duty to care for external and internal security it was now to provide a framework to guarantee the means of existence for all, through full employment, social insurance, or other forms of benefits or services. ‘Social Security’ thus became the umbrella word for economic, social, and cultural rights as expressed in Article 22 of the United Nations Universal Declaration of Human Rights: ‘Everyone as a member of society, has the right to social security and is entitled to realization through national effort and international co-operation and in accordance with the organization and resources of each state, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.’ These rights are then specified as the right to work (Art. 23), the right to recreation from work (Art. 24), the right to health, well-being, and social protection, with special emphasis on mothers and children (Art. 25), the right to education (Art. 26), and the right to participation in culture, science, and the arts (Art. 27).

Thus Social Security became another name for welfare in its political-philosophical sense. It became a key term in the international evolution of the welfare state after World War II. It was adopted differently on the national level, however. In most countries the institutional aspect has long dominated. In the actual context of ‘crisis‘ or ‘reconstruction’ of the welfare state ‘social security’ shows again its normative aspect: to what extent are politics free to dispose about political regulations which aim at stabilizing the future economic protection of the population or defined parts of it? ‘Social Security’ means the right of everybody who belongs to a certain commonwealth to be included into the basic provisions against destitution and want. And it suggests moreover that such provisions should take a coherent and clearly accessible form for everyone, so that people are not only legally protected but also have easy and reliable access to such protection.

4. Controversial Issues

4.1 General Problems

From the perspective of the Universal Declaration of Human Rights as well as William Beveridge or Pierre Laroque, the ‘father of the French securite sociale,’ Social Security was not restricted to publicly organized redistribution within populations at risk but also included policies of full employment and minimum wages. There was a clear awareness of the trade-off between full employment and the possibilities for sufficiently funding social protection. Social security as the goal of guaranteeing to the entire population the opportunity to participate in the economic and cultural life of its society implies education and employment as primary means and compensatory social protection only as a ‘second-best’ solution. The reification of ‘Social Security’ has obscured this original perspective and focuses public attention on processes of redistribution only. The current trend to substitute ‘work for welfare’ in the case of the able-bodied is quite in line with the original intention, provided that a decent minimum living standard is attainable at any rate. There is a strong divergence, however, with regard to whether the role of labor markets should be exclusive (as in the Anglo-Saxon world) or whether there should be a subsidiary public role (as in the Scandinavian and German-speaking countries) in employing the less productive parts of the active population.

From the perspective of the ‘Chicago School’ of economics, the existing systems of Social Security are overly costly, they disguise the relationship between an individual’s contributions and benefits, and they benefit the middle classes more than those who are truly in need. A negative income tax would better serve the poor, they maintain. Such a ‘rationalist’ economic perspective does not take into account the existing trust in public systems of reciprocal security in most countries. The ‘deal’ which pools the risks of the whole population in one scheme and thus makes basic economic security a matter of democratic politics seems to find high acceptance in most countries, although many people are aware of the likelihood of being among the net payers to the system.

Given the natural inequality of abilities and the social inequalites resulting from birth, education, labor markets, and competition in general, all political endeavors to foster social security—be it in the wider or in the narrower sense—face the problem of distributive effects. These relate not only to the amount of individual benefit and the forms of public financing but to the institutional arrangements as well. Strong political conflicts emerged in many countries around the issue of creating a single comprehensive system for certain provisions or for maintaining a fragmented system differentiating among classes of populations at risk. A somewhat related problem concerns the issue of securing only minimal standards or advanced standards of benefits through public provision. Finally, there is an obvious political struggle in all countries concerning the level of redistribution and who should bear the costs of social protection.

Comparative research has focused mainly on the explanation of national differences in institutional design and distributive effects. Path dependency upon early national approaches seems to be an important explanatory factor for these variations, beside political power relations and cultural orientations. An interesting finding is that systems which provide high levels of protection tend to protect minimal standards better as well.

4.2 Sectoral Aspects

Most political controversies do not arise with regard to the system of Social Security as a whole but concerning particular issues. As the functional organization of social protection is different from country to country, it remains difficult to generalize about this. One may identify some broad issues, however.

The paramount problem in the contemporary debate—particularly as a consequence of demographic aging—is the security of income in old age. A three-tiered system consisting of universal and stateadministered protection of basic standards (first tier), employment-related (and often private) protection of advanced standards (second tier), and complementary forms of personal provision (third tier) seems to be a promising model to resist the demographic and economic challenges of the decades to come. In order to ensure income security in old age for all, some public regulation and supervision of the second and third tiers remains important, however.

The second complex of risks is related to illness, industrial diseases, and long-term disability. Here, benefits in cash and in kind are necessary, and coverage for these risks is organized quite differently in different countries. Essentially, there are two different institutional models: the National Health Service and protection through social insurance. Both systems face the problem of containing the explosion of costs which has resulted from the compounding of a wide range of medical, technological, demographic, and economic factors.

The third complex of Social Security is related to the protection of the family. Since child labor has been forbidden and education made compulsory, children are no longer an economic asset for their parents, but rather a strong source of social inequality. It is still contested to what extent parents and especially mothers should be supported by public means, beyond the generally accepted subsidy in cases of manifest poverty. The low birth rate in most European populations now gives more political weight to demands to improve the living conditions and social protection of persons who are raising children or nursing their permanently incapacitated parents.

The most contested part of Social Security is public pro ision for the unemployed. Here, the trade-offs with labor-market policies and full employment are obvious, and convictions vary about how to deal with this problem.

The issue of poverty cuts across such functional distinctions. The extent to which it emerges as a separate problem which must be addressed by specific measures depends to a large extent on the institutional approaches which a country has adopted in the abovementioned realms of social security.

The issues discussed here are those generally attributed to the concept of social security. The concept of the welfare state covers additional services such as housing, education, and personal services.

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