The Culture of Welfare Markets: The International Recasting of Pension and Care (Routledge Advances in Sociology)

The Culture of Welfare Markets

Routledge Advances in Sociology

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The Culture of Welfare Markets The International Recasting of Pension and Care Systems

Ingo Bode

New York London

First published 2008 by Routledge 270 Madison Ave, New York, NY 10016 Simultaneously published in the UK by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN This edition published in the Taylor & Francis e-Library, 2007. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” Routledge is an imprint of the Taylor & Francis Group, an informa business © 2008 Taylor & Francis All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging in Publication Data Bode, Ingo. The culture of welfare markets : the international recasting of pension and care systems / Ingo Bode. p. cm. —(Routledge advances in sociology ; 35) Includes bibliographical references and index. ISBN 978-0-415-95801-1 (hardback : alk. paper) 1. Pensions—Western countries—Case studies. 2. Older people—Services for—Western countries—Case studies. 3. Welfare state—Economic aspects—Western countries. I. Title. HD7105.35.W47B63 2008 330.12’6--dc22 2007018158 ISBN 0-203-93515-2 Master e-book ISBN ISBN10: 0-415-95801-6 (hbk) ISBN10: 0-203-93515-2 (ebk) ISBN13: 978-0-415-95801-1 (hbk) ISBN13: 978-0-203-93515-6 (ebk)

Contents

Acknowledgments

ix

1

Introduction

1

2

Welfare Markets: Institutional Forms and Organizational Landscapes

11

Welfare Markets in Old-Age Provision: The State of Things

23

3

3.1 Where the Market Comes in: Current Institutional Designs 3.2 How Welfare Markets Develop: The Dynamics of Change

4

The Role of (Welfare) Culture: The State of the Art and an Analytical Grid

83

4.1 The Culture of Welfare, the Culture of the Market 4.2 The Case of Old Age Provision 4.3 Key Moral Issues in Pension and Care Systems

5

Sense-making of Welfare Markets for Old-Age

124

5.1 The Study: The General Approach, Research Design, and Methodological Questions 5.2 Sense-making in Public Debate and the Media 5.3 Making Sense of Sense-making: Hybrid Settlements Compared

6

Conclusion: A New Moral Economy of Old-Age Provision

188

Notes

199

References

229

Index

245

Acknowledgments

This book is the outcome of a long journey, in both a literal and symbolic sense. It originates in previous research I conducted on organisations dealing with the allocation or provision of social welfare in three European welfare states. From this research, it appeared that these organisations, exposed to the mantra of ‘market welfare’, increasingly framed their action in terms drawn from big business, but were, at the same time, keen to bring their own interpretations and meanings to these ideas. The market agenda, I found, led these organisations to adopt a hybrid profile and a language full of ambiguity. Was this just a problem faced by these particular organisations? Or was this hybridity and ambiguity (also) rooted in their wider environment, or even in society as a whole? The study considered here is an attempt to provide answers to these questions. Focusing on macro-cultural representations of marketized social welfare provision, it addressed a distinctive social category around which much debate has revolved in recent years: our current or future senior citizens. With an ageing population and extensive public agitation relating to this phenomenon internationally, this category appeared to me as a particularly interesting subject of enquiry. Underlying the attempt to grasp what I term in this book the culture(s) of welfare markets was a deep conviction that advanced societies, whatever the economic pressures they are exposed to, mould their institutions on the basis of normative concepts subject to collective sense-making–concepts that come most clearly to the fore when resorting to international comparisons. Assuming that there is still more to social welfare provision than mainstream discourses would like us to believe, I intended to fill a conceptual, theoretical, and empirical lacuna in the study of contemporary welfare states. Thus, I embarked on a long journey in the literal sense. As a German sociologist, the preparation for this journey started at home, more precisely at the University Duisburg-Essen where I had been attached as an assistant professor for many years. The departure was made possible by a generous grant from the German Research Council (Deutsche Forschungsgemeinschaft) to which I am deeply indebted, as it also co-funded academic stays at the University of Montréal and at the University of Kent (UK). Moreover, as a guest professor at the Institute of Political Studies in Paris, and, one year

x Acknowledgments later, as a research fellow at the ‘Department for Research on Old Age’ of the French National Pension Fund, I was able to carry the project further forward. I completed the book in the School of Social and Political Studies at the University of Edinburgh which, it is worth mentioning, is an intellectually stimulating, but also socially convenient, place to work and study. There is not enough space here to thank all those who contributed to this book in one way or another. I interviewed more than forty fellow scholars and professional experts, and I benefited from numerous discussions with colleagues and students. I can only mention those without whom the completion of this project would have certainly been impossible. To begin with, I have to thank Dena White and Oscar Firbank, both working at the University of Montréal and in the ‘Research Group on the Social Aspects of Health and Prevention’ which also awarded me a helpful research grant. Furthermore, I am grateful to John Baldock who invited me to stay at the University of Canterbury and who was very supportive to me. In addition, I thank the Institute of Political Studies in Paris, in particular its ‘satellite’ team based in Nancy, and the aforementioned Department for Research on Old Age at the French National Pension Fund, especially Alain Rozenkier. Also, this book has substantially benefited from Bernadette Boyle who amended my incomplete English with utmost commitment. Last but not least, I am indebted to Christina and to Marian—who were both incredibly indulgent to me given the tremendous time constraints imposed by this project—and to my parents without whom I would have been unable to take the very long, and sometimes thorny, professional route many independent social scientists must take in these times.

1

Introduction

Something strange has happened to western welfare states over the last twenty years or so. Until recently, and notwithstanding the differences between the many ‘worlds of welfare capitalism’ (Esping-Andersen 1990), the social order of advanced industrial nations was based on the dichotomy of ‘market’ and ‘nonmarket’ spheres, with the latter providing shelter from what the former tended to generate—disruptive loss of income or long-lasting misery among people with limited ‘market value’ and lacking support from their family. This dichotomy was deep-seated too in major strands of social theory, for which the foundations of modernization were (and still are) often grounded in the differentiation of spheres of life, of societal systems, or of modes of social coordination. To be sure, the protection from market forces as ensured by the welfare state was never all-inclusive and varied over time and between groups, communities, and states. Moreover, welfare states were by no means an exclusive realm of decommodification (in the terms of Esping-Andersen) as they also enabled people to ‘go market.’ However, nonmarket-based patterns of welfare provision were deemed to embed the market economy, as Polanyi (1944) put it, with the twin aim of making market economies work and preventing them from completely colonizing human existence. And now? ‘Social welfare has become big business’ (Gilbert 2002, 111). Across the Western world, there has been a ‘shift towards market welfare’ (Taylor-Gooby 1999, 98) and the creation of the ‘welfare consumer’ (Baldock 2003a; Mann 2006). International bodies are advocating (more) market governance in social welfare provision while public policies have been infused worldwide with ideas adopted from business. Some even see a ‘market economy of welfare’ (Hugman 1998. 87) taking shape in parts of the Western world. At least, the old division of labour between the market and nonmarket spheres has come under scrutiny. With hindsight it appears that the ‘clear demarcation between the sphere of political authority . . . and that of markets . . . was a delusion of the postwar era’ (Jordan 2004, 82). Nowadays, there seems to be an interpenetration of spheres or systems mainstream social theory once assumed as a matter of

2

The Culture of Welfare Markets

principle to be separate, with social benefits and social services becoming provided on welfare markets.1 This development is prone to change the foundations of social-welfare provision and the way Western societies organize it quite considerably. It affects various aspects of human existence and different stages in an individual’s life course. Not least, it tends to recast the institutional regulation of later life. Indeed, given high-ranking concerns about a changing demography and widespread generational-clash scenarios, the management of old age is viewed by many as becoming a key social problem in the Western world (Gen 2000; Pierson 2001; Clark 2003, 25–35; Vincent 2005; Victor 2005, 79–113). Against this background, this book examines welfare markets in old-age provision. Its aim is twofold. Firstly, taking the example of care and pension systems, it maps the architecture and dynamics of these markets for a range of advanced Western societies, two of which are commonly referred to as liberal (Britain and Canada) and two others exhibiting more coordinated varieties of welfare capitalism (France, Germany). Secondly, given the fact that social-welfare provision in such advanced societies is entangled not only with economic processes, but also with the way major social groups make sense of regulatory institutions, it looks at how these markets are or become culturally embedded. It argues that the future dynamics of welfare markets cannot be accurately assessed (let alone forecast) unless the dominant patterns of sense-making are fully understood.

WELFARE MARKETS AS A PHENOMENON SUI GENERIS Welfare markets are competitive spheres in the institutional provision of social welfare, comprising the allocation and the management of services or benefits designed to improve a person’s social situation. In the past, such services or benefits were often delivered by the state or its agencies or by the family. Today, however, the ‘accommodation of social policy to the values of the free-market economy’ (Smart 2003, 71) appears indicative of a paradigmatic change in how the respective roles of the market and of nonmarket spheres are commonly understood. Many have argued that bringing the market into the provision of social welfare provides better ‘value for (public) money’ or enhances the overall socioeconomic performance of a given society. This may or may not be the case.2 Even if the optimistic beliefs are finally vindicated, however, major sections of society will have to put their faith into these ideas before change can become sustainable. Should the advantages of marketization remain unclear, let alone be debatable, such beliefs would have to be even stronger. It follows from this that the proliferation of marketized patterns of social welfare provision is in all probability related to mainstream cultural representations, which differ from those on which the old settlement was built. The recasting of welfare

Introduction

3

state institutions, then, seems to connect with new cultural representations, or, to put it more bluntly, with the culture of the market colonizing social welfare provision. There are good reasons to assume that the marketization of welfare provision is an expression of wider cultural, and not just economic, change. For some time now, sociologists have suggested the advent of a commercialized competitive individualism placing the emphasis on the calculating, rational, self-interested subject (e.g., Ray and Sayer 1999). It has also been argued that faith in the virtues of public welfare provision or any other kind of ‘planned social technology’ has by and large vanished. Some have even seen ‘the end of progressivism’ (Stern 1998) as a philosophy underlying the postwar settlement of the welfare state. This is especially endorsed by postmodern writers (Leonard 1997). Whatever the truth in their overall approach(es), postmodernists have, above all, intriguing arguments for their claim that no single narrative, and no single model of social coordination, will in the near future be an unequivocal reference for human action including public agency. Thus, even though commercialized individualism may be on the rise, it is unlikely that this is the whole story when regarding current cultural change affecting social welfare provision. Rather, this change appears as multifaceted and inconsistent. The ambiguity associated with contemporary cultural change chimes with what is widely seen as the most striking innovation in the ‘social engineering’ of the welfare state: Practitioners, policy advisers, and academics are in praise of networks, public–private partnerships, independent quangos, mixed modes of governance, in short, hybrid arrangements which embrace, not least, ‘quasi-markets’ (Le Grand and Bartlett 1993; Brandsen 2004; Pinker 2006). Internationally, the emergence of a ‘contract culture in public services’ (Perri6 and Kendall 1997) has indeed raised hopes that social welfare provision will be more efficient and also more responsive to users. Equally, models of ‘managed health care,’ ‘workfare’ or ‘contractual activation’—all based on both market governance and partnerships—have found increasing interest among social policy experts (Powell and Martin 2002; Wyait 2003; Strathdee 2005). Business tools and social policy objectives, as well as competition and partnership, are now widely being seen as complementary rather than contradictory modes of coordination. The design of welfare programmes is seen to depend on ‘what works’ rather than on a particular institutional choice. This pragmatism is very much associated with ‘Third Way politics’ (Giddens 1998). ‘New Labour’ in Britain is a case in point, but it does not stand alone (see Clark 2004; or Reutter 2004). The blending of various modes of coordination is fundamental to new social policy designs all over the Western world. Granted, social welfare provision has always been pluralistic to some extent. Today, however, there seems to be a new mixture in the governance of welfare. Market mechanisms take centre stage, without simply superseding nonmarket-based patterns of welfare provision. It follows from

4

The Culture of Welfare Markets

this that marketized social welfare exhibits a distinctive character. It is subject to particular regulations and embedded in structures which differ from ordinary (capitalistic) markets; and it exhibits a specific cultural embeddedness. Welfare markets, then, have to be conceived of as a social and cultural phenomenon sui generis.

The Case of Old-Age Provision As already noted, this book investigates the regulation and embeddedness of welfare markets by exploring the particular field of old-age provision. More especially, it examines the cultural underpinnings of pension and care systems by comparing the four countries mentioned above. Undoubtedly, pensions and elderly care are fields where marketization is underway. Regarding pensions, the emergence of what is referred to as ‘pension fund capitalism’ (Clark 2000) and ‘stock market pensions’ (Minns 2005) has involved a (gradual) erosion of public- and company-based (final salary) schemes. However, retirement provision in Western societies has always relied in part on ‘institutional hybrids’ (Whiteside 2006) and the foundations of the pension system remain complex. Public regulation has been preserved and sometimes even become more sophisticated (Hyde et al. 2006), whereas ‘tendencies to financialisation are partial, uneven and in the making, not complete and all-embracing’ (Langley 2004, 554). The same holds for elderly care. There is a clear international trend to ‘market care’ (Means et al. 2002; Ascoli and Ranci 2002; Ungerson 2004). In many countries, ‘home care is being rapidly reorganized on market-modelled lines’ (Aronson and Neysmith 2001, 151), and, in residential provision, the traditionally strong private sector is increasingly controlled by big business. However, markets in elderly care remain subject to public regulation, part of which is being driven by concerns over poor quality and cold-blooded service provision. More generally, a range of public programmes intend to make the elderly more autonomous welfare citizens (see, e.g., Le Bihan and Martin 2006). What is occurring, then, is ‘regulated marketization.’ It is from this perspective that this book raises the question of how contemporary society is making sense of welfare markets in old-age provision. The cultural challenge is obvious. Whole generations built their social identity upon welfare state-based arrangements (Estes et al. 2003, 103). These arrangements exhibited various patterns of economic redistribution, including transfers between generations, between the healthy and the ill, between people involved in informal networks, between men and women, between those passing through an ordinary life course and those with disrupted biographies. All Western societies instigated institutions replacing or complementing family-based patterns of elderly care and income security; the ‘democratization of retirement’ (Myles 2002, 130) and elderly care ‘going public’ (Anttonen et al. 2003, 171) are major consequences. Against this background, the overall intrusion of market logics into systems of old-age

Introduction

5

provision—the emergence of welfare markets—appears as a pathbreaking transformation in the very culture of old-age provision. The reaction to this is many-sided, though. It may well be the case that recent reforms have been ‘concerned with inculcating a new set of values and objectives oriented towards incorporating individual older people as both players and partners in marketized systems’ (Powell 2001, 128). Also, they may have aimed at ‘changing the culture and behaviour of people prior to retirement’ by conceptualizing these people as welfare consumers interested in choice and flexibility (Mann 2006, 26). Concomitantly, however, politicians and the media have bemoaned new poverty risks among (future) pensioners or care-dependent people. Further, they have discussed how better to protect or to empower ‘pension’ or ‘care consumers.’ Seen from that perspective, the culture of welfare markets in old-age provision appears contradictory and complex—and therefore worthy of more thorough exploration. While ‘it is unclear how far the welfare markets . . . are sustained by a moral legacy from the culture of welfare state citizenship’ (Taylor-Gooby 1999, 111), there remains a broad range of institutions, actors, logics, and references involved in the organization of care and pension systems. With the aforementioned focus, this book goes beyond mere social policy analysis. Adopting a society-centred rather than policy-centred perspective, it addresses the nature of new forms of social welfare provision through the lens of the ways in which advanced Western societies handle the social and biological risks of frailty and dependency. From the standpoint of an individual, pensions and care arrangements are two sides of one coin, as growing old implies needing both monetary transfers and (more or less) personal care or nursing. True, there are differences between retirement provision and elderly care. Although the pension issue is basically associated with money, the care of older people is understood mainly in terms of patterns of social interaction. And although income in old age is of (almost) universal interest, care in dependency is about risk and problems that will affect only some. Nonetheless, both pensions and care are about how society is coping with the phenomenon of people leaving its wealth-producing sectors. As the two fields are often separated in the cognitive maps of academics and policymakers, their parallel examination in this study offers an innovative crosscutting approach to the societal treatment of old age.

Culture as a Missing Link in the Study of Social Welfare Provision Major strands in the social sciences argue that culture plays a critical role when it comes to human action in general and to the formation of institutions in particular. Cultural values influence individual and collective behaviour, and there is evidence that institutions persist only when they are backed by entrenched sets of shared values.3 However, the role of culture in the formation of institutions regulating social welfare provision (at large) has remained a marginal topic in both theory and research. True, a range of scholars has

6

The Culture of Welfare Markets

touched upon this issue (see, for instance, Pfau-Effinger 2005a). Yet the social sciences, when embarking on the study of issues of welfare provision, have been much more interested in the impact of economic development and (political) power structures. Taking issue with the one-sidedness of current theory and research, this book attempts to address this missing link by unveiling the ‘cultural loading’ of welfare-regulating institutions against the background of increasing marketization. In a certain sense, this connects with what has been termed the ‘cultural turn in social theory’ (Alexander 1988; Nash 2001; Smart 2003, 10), including the political sciences (Lane and Ersson 2005) and also the sociology of the welfare state (see, e.g., Clarke 2004, 31–51). Notwithstanding the various directions this cultural turn has taken, it does pertain to questions of old age. A cultural perspective on old age focuses on ideas about what senior citizens deserve, about who is to take care of them, and about human dignity and priorities in (the management of) welfare provision. It is noteworthy that, notwithstanding increasing individualization in Western society, old age, and the way it is ‘managed,’ remains subject to collective normative representations of this kind. Most of the aforementioned ideas are indeed key issues in the public debate, and they are (still) constitutive of how society is defining and handling problems related to retirement and care provision. The development of old-age provision, while being affected by crises and contradictory moves, is considerably influenced through the related processes of sense-making. Accordingly, if the aim is to discern how contemporary societies handle old age via welfare markets, then the challenge is to understand how these societies confer meaning to the new hybrid character of pension and care systems. This study will therefore examine collective representations of more market-based patterns of old-age provision. Such representations include, for instance, questions about what to do with people failing to self-manage their retirement adequately, or about what competitive patterns of service supply imply with respect to fair access to care. The study will, however, not attempt to link cultural factors (causally) to social or political outcomes (for such an approach, see e.g., Lane and Ersson 2005). Rather, its aim is to elucidate the symbolic apparatus through which contemporary societies cope with problems of old age under conditions of marketization. This is a sociological agenda par excellence. Indeed, in his seminal work on the foundations of cultural sciences, Max Weber argued that the understanding of culture requires an interpretation of meanings. Accordingly, any attempt to chart cultural influences on social action or policy making needs a realistic assessment of these influences, before translating them into items ready for being used in causal factor analysis. This is where this study is located.

The General Approach When investigating the culture of welfare markets in this sense, two dimensions of cultural influence come into play: The first dimension is the process

Introduction

7

of sense-making associated with old-age provision in a given institutional setting. This book argues that this process is mirrored, above all, in public communications. These communications embrace both statements from stakeholders involved in the pension or care market and comments of relevant third parties, such as journalists, think tanks, and (academic) experts. Of course, politicians matter, too—yet they usually are led by tactical considerations to a comparatively strong extent. It is important to see that market-centred communication does not only occur through advertising (sidestepped by this book) but also through statements basic market players make in the public sphere. Such organizational discourse, although fraught with strategic intentions, contains elements of sense-making which go beyond the commercial purpose this communication is meant to serve. The wider process of collective sense-making embraces all actors who mould, or attempt to mould, institutions and regulations relevant to welfare markets. Indeed, one of the key lessons of economic sociology is that if a new market is going to emerge, this is due to social forces giving a particular shape to it (Fligstein 2001).4 Furthermore, it is assumed here that (academic) experts taking a stance in the press are essential to public opinion building, whereas journalists echo major opinion streams of a given society. All these actors know about the legacies of a given welfare state history, but they also may be inspired by ideas drawing on, say, economic liberalism or cultural individualism, that is, newly proliferating values which deviate from those enshrined into existing welfare state institutions. Fundamental to processes of sense-making, this book argues, is media communication. Speakers in the public sphere operate as ‘mediators between the . . . cultural attitudes in the population . . . and political decisions’ (Pfau-Effinger 2005a, 10). They also express tensions emanating from different and competing interpretations of value-laden notions. This is why the empirical investigation carried out for this study draws upon statements published by quality newspapers. These media can be viewed as a reliable indicator of how a social issue is dealt with in the official culture of a given society5; it can further be assumed that major Western institutions are moulded in line with those ideas and concepts which gain prominence in ‘reputed’ media consumed by major sections of a society’s elites. A focus on these media may ignore the subtleties of a pluralized system of media communication (e.g., the role of popular newspapers or TV channels), on the one hand, and the influence of popular culture (as analysed by ‘cultural studies’), on the other. However, the hypothesis underlying this study is that quality newspapers reveal which collective ideas enjoy or gain legitimacy in a given society, regardless of the power structures which underlie the media system and produce ideological biases in the (re)presentation of social facts. Media-processed debates in the public sphere echo the way society makes sense of social issues. In particular, they profile the commonsense corridors in which regulative options and market behaviour are dealt with. Therefore, this book will present findings from a review of articles

8

The Culture of Welfare Markets

published in quality newspapers between 2002 and 2005 and dealing with key issues in retirement provision and elderly care. Regarding the assessment of the cultural facts, the methodological challenge is evident. As (welfare) culture is only ‘revealed by its outward manifestations’ (Baldock 2000, 124), it is tricky to chart. One possibility, of course, is survey research. Yet, as the interest of this study resides in the ‘official culture’ of a given society, another route—an encompassing review of the contents of public statements made by journalists, experts, and collective actors—was taken.6 Apart from the press review, the study is based on two further sources of data which, however, cannot be referenced systematically throughout the book, as space for this is limited. One is—often widely dispersed—information as documented by scientific studies,7 the ‘grey literature,’ and reports in specialized media. A further source is interviews with academic experts, conducted with the aim of mapping institutional landscapes and key evolutions.8 Among other things, this acted as a control to mitigate the ‘national idiosyncrasy’ of any researcher working abroad. The overall investigation relies on a particular conceptual framework which comes out of a theoretical reflection. This reflection will be set out in chapter 4, which discusses theoretical issues concerning ‘culture’ in general, as well as the culture of welfare and the culture of markets in particular. From this discussion, a concept is derived which draws on a number of key elements seen as fundamental to the analysis of the cultural underpinnings of (institutionalized) old-age provision. Four moral rationales are singled out: deservedness, dignity, responsibility, and ‘sound management.’ This list is far from complete, but it will be argued that major foundations of the institutional organization of pension and care systems are addressed by these categories. The thus devised grid of analysis will also allow comparison, in the conclusion, of welfare markets in retirement provision with those characteristic of elderly care. Accordingly, the book will deal with several cultures of welfare markets. This also holds with regard to the second dimension in which culture is relevant to this study. As already noted, this study undertakes a comparison of different countries, or more precisely, of national ‘clusters’ of collective sense-making. Drawing on the idea that nations as ‘imagined communities’ (Anderson 1991) produce country-specific cultural frameworks, the study assumes international variety in the ‘cultural loading’ of welfare markets. The value of comparative social science consists of making the ‘cultural factor’ visible and of uncovering the distinctive traits of the compared cases or systems (Ungerson 1996; Maurice 2000; Valkenborg and Lind 2002). Having said this, it is open to investigation whether and to what extent international divergence exists, and persists with regard to welfare markets in old-age provision. As economic structures and lifestyles seem to become ever more similar across the Western world, it looks plausible that the societal treatment of old age is converging around the globe. The debate held in comparative social policy over the last years has indeed frequently raised

Introduction

9

the question of whether welfare systems are becoming more homogeneous under the influence of globalization, with marketization being a key trigger of that movement (see, e.g., Glatzer and Rueschemeyer 2005). An important question then is whether national cultures are eroding with the emergence of a transnational culture of welfare markets. As international comparisons focusing on this question are still in their infancy, the explorative enquiry as undertaken by this book promises new insights regarding this question. The comparison extends over four advanced Western societies: Britain, Canada, France, and Germany. These are all countries exhibiting ‘welfare mix traditions’ of one kind or another. As noted at the outset, and in terms of the welfare-regime typology introduced by Esping-Andersen (1990), France and Germany both exhibit a ‘corporatist tradition’9, whereas Canada and Britain are usually conceived of as representing a liberal regime. In that sense, two particular ‘families of welfare’ are addressed here, rather than a broad range of different welfare regimes. The comparative analysis concentrates on the question of to what extent neoliberal countries, exemplified in this study by typical corporatist, or conservative, welfare regimes, adopt features of liberal regimes which, on the other hand, experience their own history of marketization. With this general perspective, the comparative approach of this study is also relevant to Nordic or Eastern European countries which have equally taken the route to more marketized old-age provision.

The Structure and the Message of the Study This study will provide major insights into the architecture and the dynamics of welfare markets, including their institutional setup and organizational underpinnings. It will thus be useful for students and scholars interested in the evolution of social policy worldwide. At the same time, the book pictures a new institutional management of old age in major Western societies, an issue relevant to those working in social gerontology. Moreover, the monograph should be of interest to those examining the sociology of institutions, particularly with respect to cultural representations endemic to institutions and to the sociology of markets. To provide valuable insights to this multiple audience, the argumentation will travel light and work (as far as possible) in simple theoretical terms. Its structure is as follows. The chapter following this introduction provides a brief review of the academic discussion of welfare markets with a particular eye on their institutional forms (and variety) and on the (panoply of) organizations involved with these markets. A crucial point is that welfare markets exhibit particular characteristics concerning both their institutional design and the organizational fields they are related to. The third chapter charts the ‘state of things’ concerning the development of welfare markets in old-age provision across the four nations under consideration. The first section illustrates where and in which forms market issues play a role in

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The Culture of Welfare Markets

the institutional architectures of old-age provision as they have taken shape thus far. This embraces a short historical account and a rough sketch of the welfare mix in both pensions and care. The second section charts recent dynamics in these markets, with a particular eye on internal transformations, evolving regulations and major lines of public debate. The final section of the chapter makes a comparative assessment of the evolution of welfare markets for old age in the countries under study. The fourth chapter embarks on a theoretical reflection about the culture of welfare markets. It first looks at general concepts and then at approaches elaborating on oldage provision. Thereafter it sets out a grid of analysis centring on selected ingredients of what will be referred to as the moral economy of old-age provision, with the related moral issues being used as basic categories for the envisaged empirical investigation. The fifth chapter constitutes the main body of the book. It starts by picturing the methods applied for the empirical investigation and then proceeds to a media analysis focusing on public comments from journalists, experts, and collective actors with a stake, or an interest, in pension and care provision. The chapter ends by comparing the specific manifestations of what is shown to be the case in every country: the emergence of new hybrid settlements in the culture(s) of old-age provision. The overall message of the book, as summarized by the conclusion, will be that, throughout the countries under study, old-age provision evolves in contested and contradictory cultural terms, with the rising welfare markets producing new normative tension fields. In all countries, the moral economy of welfare markets in old-age provision exhibits a fuzzy character and is prone to entail more volatile outcomes, as pension and care systems become a matter of permanent soci(et)al re-negotiation. For example, a high valuation of market efficiency and concerns over violated human dignity openly compete with each other. By the same token, there are different welfare market cultures on the international scale. Notwithstanding the global proliferation of market-based pensions and care arrangements, national pension and care systems remain unique in that, for example, norms relating to collective responsibility are still rated differently in each country. Overall, then, marketization is culturally dependent rather than global and universal.

2

Welfare Markets Institutional Forms and Organizational Landscapes

As noted in the introduction, the rise and consolidation of market-based arrangements in social welfare provision is a striking phenomenon throughout the Western world. This chapter provides a brief overview of those institutional forms and organizational landscapes in which this process materializes. It starts by mapping the basic signposts and confines of the new society-embracing market agenda crystallizing from the 1980s onwards. Thereafter, it turns to the major varieties of welfare markets. The third section pictures the organizational landscapes typical of these markets. This helps identify collective actors relevant to the building and reproduction of these markets, including by processes of active sense-making.

THE NEW MARKET AGENDA AND ITS CONFINES No doubt markets have been on the rise for some time now. Within the mainstream economy, market-based forms of social coordination have been soaring worldwide. Capitalist economies have become ever more affected by short-termism and shareholder-value-driven business strategies. This generates pressures on the social organization of the economic system, as shown by developments in present-day labour markets, where flexible contracts, performance-related pay, and shop-in-shop businesses have become commonplace—regardless of the persisting institutional variety in contemporary capitalism, which is widely discussed in the literature (Coates 2005). Concurrently, the overall infrastructure embedding capitalist economies has been subject to various forms of political deregulation, resulting in a growing commodification of public institutions on various scales (Cerny 1997; Slater and Tonkiss 2001; Smart 2003; Miller 2005). Hence, the market agenda touches upon both the organizational forms prominent in the mainstream economy and the institutional framework in which the latter is embedded. From the perspective of welfare state theory, the interesting point is that the market rationale, although always endemic to the economic system of Western nations, has now far and wide spilled over to genuinely non-market (institutional and organizational) spheres, including those regulated by

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The Culture of Welfare Markets

social policies. This extension of market regulations into the realms of social politics is prone to change the anatomy of welfare states profoundly. In fact, the postwar settlement exhibited a (far) clear(er) separation between the mainstream economy and social politics. A key objective of the latter was the control of basic social risks arising from the market interplay or from problems of human existence that the market appeared unable to cope with on its own. These risks embraced, among other things, work incapacity and a sharp drop in personal income. Furthermore, welfare state institutions were entrusted with meeting a number of basic human needs which were not, or were insufficiently, satisfied by the mere market mechanism. Decent housing, good health, and basic provision with commodities were meant to be guaranteed by society independently of the capricious dynamics of (labour) markets. Moreover, to an extent depending on the prevailing welfare state regime, the typically uneven outcomes of market interaction were expected to be smoothed out interpersonally through various mechanisms of social redistribution, with the fiscal system being a prime lever. All this was ensured by comprehensive implementation machineries largely based on law, welfare bureaucracies, and hierarchical coordination. Depending on the national configuration, legal codification of social welfare provision often drew on the concept of social citizenship. What is more, however, the legal apparatus contained (more or less) clear-cut procedures to directly implement public programmes. Granted, these programmes, and also the master plans designed for their implementation, frequently proved fairly idealistic. Even though social inequality was reduced in scope, it remained a key characteristic of Western civilization. At the risk of oversimplifying the past one can, however, posit that, as an institutional script, this programme has served as an influential normative landmark for the key players of the postwar welfare states—that is, centre-right and centre-left political parties, social partners (especially trade unions), professional groups, and (public) interest organizations of various kinds. A ‘welfare consensus’ was crystallizing, even in more liberal regimes (see Hewitt 1992; Slater and Tonkiss 2001, 132–139; Shewell 2001, 167, for the case of Canada). In a nutshell, this consensus implied that the state set limits to the markets in order to secure the social well-being of large sections of the population. Nowadays, the infrastructural embeddedness of markets as emanating from various sociopolitical regulations has by itself become subject to marketization, stimulated by the ‘idea that regulation, where absolutely unavoidable, should be “market-like”’ (Kuttner 1998, 36). This has led to both the liberalization of formerly public infrastructures (for example, water supply, telecommunication, public transport, education) and to diverse patterns of ‘market based governance’ (Donahue 2002) or ‘quasi-market governance’ (Brandsen 2004) within the public, health, and social-welfare sector. Typical results included the ‘commercialization of social welfare services’ (Chappell 2001, 111; see also Gilbert 2002, 117), the spread of private insurance within

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13

health-care systems, or a switch from statutory service provision to schemes combining public subsidies with private-sector delivery (see below). Importantly, the overall evolution towards more market governance in social welfare provision (including old-age-related programmes) has been vigorously promoted by a number of international organizations such as the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund, the World Bank, the World Trade Organization, or the European Union (Minns 2001; Dostal 2004; see also Holzmann et al. 2003; IMF 2004, 81–119).1 The overall movement also included the widely disseminated reform agenda known under the label of New Public Management (Lane 2000; Christensen and Laegreid 2002; Talbot 2004).2 This agenda has profoundly affected the implementation machinery of the welfare state. It has promulgated ‘explicit standards of performance . . . [an] emphasis on output control [and] increased competition’ (Christensen and Laegreid 2002, 19); its wider objectives are improving cost-efficiency, introducing ‘customer orientation,’ applying predefined and measurable service standards, ensuring higher transparency and accountability, and creating scope for active revenue generation within public administration. In fields as varied as child care, higher education, or job training, the reform agenda has led to institutional innovations such as purchaser–provider splits, contracting out, interagency rivalry, public–private partnerships, and a ‘value for money’-oriented business reengineering in public or nonprofit welfare agencies. Accordingly, these agencies have adopted management tools from the private sector, with far-reaching consequences for those actors who organize or operate the provision of social transfers or services (see Bönker and Wollmann 2000; Dixon and Hyde 2001; Gilbert 2002; Ascoli and Ranci 2002; Clarke et al. 2006). Market governance, then, has proliferated on an international scale. The different faces of the marketization of social welfare provision will be discussed more broadly in the next section and in chapter 2 (with respect to old-age provision). Yet even at this state of reflection, it is obvious that the recourse to the market rationale to regulate modern capitalism has opened a new era in the history of welfare states. Whereas the institutions of the latter were long viewed as ‘the most prominent of those instruments aiming at “embedding” . . . the market mechanism’ (Leitner and Lessenich 2003, 327–328), this mechanism is now inherent to the embedding infrastructure itself. It would, however, be erroneous to contend that, in the new marketized welfare state, ‘everything is for sale’ (Kuttner 1998). First of all, it is obvious that contemporary Western societies continue to include ‘islands of respite from marketization’ (Kuttner, 56). Evoking the considerable importance of these islands in the day-to-day life of Western citizens, critics indeed warn against a ‘myth of marketization’ (Williams 2004), arguing that nonmonetarized work, informal exchange, civic action, and private charity are

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The Culture of Welfare Markets

more than ever cornerstones of public life. The extent to which this matters empirically may differ between social groups, organizations, or nations. Whatever the scope of these islands, however, there still remain sources from which human sense-making arises apart from the laws of the market. Secondly, and this is closely relevant to the analysis of marketized welfare provision, deregulation does not necessarily imply nonregulation. In fact, the newly emerging markets, while affecting spheres previously exempted from commodified (inter)action, often appear as ‘distorted, managed and limited’ (Slater and Tonkiss 2001, 140). The confines of the market agenda therefore require careful consideration. This especially includes paying attention to tendencies towards the deliberate control of market dynamics in competitive public-service provision. The proliferation of quality inspectorates and watchdog bodies is a clear expression of these tendencies. While the agencies emblematic of the ‘golden age’ of the welfare state—central bureaucratic bodies or local authorities organizing welfare provision on all scales—appear to be dying out, it is, in many instances, new quangos rather than fully fledged businesses that have taken their place (Hood 1991; van Thiel 2001; Talbot 2004).3 Moreover, where private agencies have become entrusted with service provision, they frequently comply with a more or less strict ‘quasi-market regime’ imposing a number of binding standards on their organizational practice. This is why many view quasi-market mechanisms as mere means to improve the efficiency and/or the quality of public service provision without generating effects counteracting the wider objectives of the welfare state as we know it. For proponents of this governance model, a differentiation between ‘market means and welfare ends’ (Taylor-Gooby et al. 2004) is imperative. Quasi markets, it is argued, simply enhance the welfare of citizens through technological perfection; among other things, they ensure a better matching between the welfare state and major social or economic transformations of Western societies (see, for example, Le Grand 2003). Given the empirical evidence, one may certainly cast some doubt on this suggestion. Thus, Taylor-Gooby et al. (2004) have argued (for the case of Britain) that the overall accentuation of market mechanisms in the incentive structure of welfare states puts strain on the provision of secure incomes for citizens with limited ‘marketability.’ Further accounts illustrate that the marketization of public services is prone to imbalances in outcomes (see, for example, Perri6 2003; Beresford 2005; van Berkel and van der Aa 2005). Brandsen (2004, 19), summarizing the international experience with quasi markets, found evidence for a ‘loss of equity in provision’ and an ‘increase in social segregation.’ This book, however, does not embark on an empirical evaluation of the actual social and economic impacts of market governance in welfare states. Rather, it is concerned with its cultural dynamics, as this is assumed to be an (at least) equally important determinant of the prospects of this governance model. What this brief discussion of the market agenda and its confines has

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brought to the fore, however, is that a differentiated assessment of its institutional and organizational expressions is indispensable when exploring the subtleties of marketized social welfare provision.

INSTITUTIONAL VARIETIES OF WELFARE MARKETS The notion of welfare markets appears fairly wide-ranging, if not nebulous. Numerous phenomena are associated with it so that a number of theoretical distinctions are essential to their scrutiny. Welfare markets are generally understood here as competitive spheres in the provision of social welfare, embracing the allocation and the management of benefits or services designed to improve a person’s social situation. It has been argued earlier that the recourse to market mechanisms in social welfare provision involves a new mixture in the ‘governance of welfare’ rather than a process through which crude market mechanisms supersede nonmarket forms of social welfare provision. Moreover, it was maintained that welfare markets are subject to particular regulations and are therefore embedded in structures which differ from ordinary (capitalistic) markets. However, although it should have become clear thus far that marketgovernance in the welfare state generates particular social and institutional phenomena, its internal diversity warrants thoughtful consideration. In fact, various patterns of marketization (co-)exist in the field of social welfare provision. First of all, marketization occurs where public spending is cut or capped, as welfare recipients subsequently rely to a higher degree on income or services available on the mere (labour) market. This is mostly referred to as privatization although it addresses further phenomena (see, for example, Spulber 1997, 76–93; Gibelmann and Damone 1998; Walker 2001; Blomqvist 2004). However, privatization per se is not amenable to the rise of welfare markets since, as such, it may simply stand for a dislocation of the production of individual well-being, that is, a move from the collectivity to the individual. Private (co-)payments in health care, the individual employment of personal assistants (at home), or the purchase of a private insurance may indeed take place without any institutional regulation informed by social policy objectives. A second pattern of marketization is salient where such regulation does exist, albeit without any further deliberate mechanism to promote the social well-being of particular groups of individuals. This is, for example, the case where welfare states, possibly after having provided (more) inclusive social insurance schemes in the past, grant tax breaks to citizens taking steps to protect themselves against social risks. In many countries, indeed, enormous fiscal subsidies ‘underpin private provision . . . either through tax incentives or public subsidies’ (Walker 2001,139, referring to Britain). Again, this by itself does not make deferred-income provision or personal service delivery subject to a fully fledged welfare market.

16 The Culture of Welfare Markets Rather, the realm of welfare markets begins where some purposeful social policy objectives are pursued by means of a market complying with distinctive institutional regulations. Drawing on this definition, one can perceive a third variety of marketization which, this time, goes along the emergence of a true welfare market, namely, the instigation of managed care or quasimarkets for the delivery of social services. This is a field addressed by the bulk of the literature dealing with the marketization of social welfare provision, including under the headline of ‘social markets’ (Le Grand and Bartlett 1993; Taylor-Gooby 1999; Scott et al. 2000; Wistow et al. 1996; Walsh, et al. 2000; Brandsen 2004). Arrangements falling into this category may be labelled managed welfare markets. In these markets, public bodies or quangos operate as key players but devolve the delivery of services to independent providers to whom they offer contracts on a competitive basis and whom they prompt to operate as (quasi) businesses seeking good return on investments, not least through tough human resource policies and strong pressures on their workforce. The instigation of these managed welfare markets worldwide follows the New Public Management agenda as sketched in the previous section. Managed welfare markets are generally based on a firm purchaser-provider split and often imply public tenders. Usually, they operate through fixedterm contracts with selected service suppliers and are based on different modes of payments (per capita reimbursement, capped block grants, performance-related payment). Frequently, managed-care agencies simultaneously purchase services from different suppliers in order to safeguard an encompassing, and multitiered, provision for one (group of) person(s). This model is particularly widespread in health care (Flood 2000). Quasi-markets frequently go alongside a ‘growing importance of private sector organizations . . . . in support of public programs’ (Rathgeb Smith 2002, 90, for the case of the U.S.). Furthermore, they have in many places supplanted in-house services of local authorities, and input-based partnerships between public funders and independent suppliers, with the latter often anchored in the nonprofit sector (Salamon 1995; Katz and Sachße 1996; Taylor 2002; Bode 2003a; White 2004). These input-based partnerships implied arm’s length funding on the basis of mutually agreed cost-benefit ratios and accountability requirements, which awarded service providers leeway to orient their practice to self-identified and spontaneous needs or citizen claims. They also laid the foundations of a retrospective compensation for expenses related to unforeseen contingencies. A widely alleged drawback was the latitude granted to providers concerning client responsiveness and cost efficiency. This is why many advocated an overhaul of this partnership model from the 1980s onwards. Quasi markets are an outcome of these claims. They require a decentralization of financial responsibility and a new role of welfare bureaucracies which become ‘by-distance- managers’ of service delivery. Agreements between purchaser and provider are mostly ‘one-way contracts,’ with the

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former telling the latter ‘what they are expected to provide in performance terms’ (Talbot 2004, 14). They urge providers to follow predetermined input-output ratios and to struggle for efficiency gains in order to outperform competing suppliers. Quasi markets embrace more or less encompassing monitoring systems to (try to) avoid the suppliers’ exploitation of an information edge; suppliers may indeed be keen to cream off ‘inexpensive’ cases from a population of potential clients or to concentrate their efforts on those acts and operations for which the effective input-output ratio predictably is in line with, or lower than, the pre-fixed cost-benefit ratio. Providers generally have to comply with tight performance standards set by agencies that (spot) purchase on behalf of welfare recipients or of a population of presumed clients. This has in many places led to strong rivalry among suppliers, including between different types of providers. Under these circumstances, nonprofit agencies, facing commercial firms as (new) competitors, frequently seek to adopt methods from the for-profit sector with the view of enhancing numeric output efficiency, potentially at the expense of wider objectives such as political advocacy (see, for example, Dart 2004 or Lewis 2005). However, should the market ‘award’ traditional aims of the nonprofit sector (e.g., provisions for an uncalculated responsiveness to intangible needs such as human attention) this may, however, operate conversely as well. As a matter of principle, however, quasi markets involve the coordination through competition and regulation’ (Brandsen 2004, 18, emphasis added). If the aim is to safeguard frictionless services, quasi markets need mechanisms that readjust dynamics not foreseen by the contract without generating disruptions in service delivery. This is why contract failures may become ‘the subject of discussion, negotiation and eventual consensus rather than punitive action’ (Talbot 2004, 14) and may be conducive to the building of quasi networks rather than quasi markets (Powell and Exworthy 2002). However, quasi-markets may also involve a systematic neglect of contingency, as well as the defection of providers from formal agreements undercover. This may in turn trigger political protest and lead regulators or managing bodies to respecify their contract policies. Thus, the practical use of quasi markets is prone to create ‘its own new political and organizational dynamic, producing more diversification . . . and [ever] new regulations’ (Rathgeb Smith 2002, 95; see also Clarke 2004, 125). A further variety to be discussed here is subsidized welfare markets. This model may be combined with managed welfare or quasi markets, yet in essence, it stands on its own. Although it has a longer tradition in the field of tax-advantaged saving, it has become a key element of the ‘enabling state’agenda that originated in the Anglo-Saxon world (Gilbert 2002, 32–44) and is based on the idea of making welfare recipients self-conscious customers or, to quote Mann (2006, 80), changing ‘passive welfare subjects into active lifestyle managers.’ The model applies to both deferred-income schemes (insurance plans) and social service systems. Thus, welfare states employ tax

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The Culture of Welfare Markets

breaks or monetary subsidies to entice citizens to purchase products from an open supplier market (consisting of insurance companies, care providers, job trainers, etc.). Anglo-Saxon pension systems, with their long-standing tax-exempted saving schemes, resort to this mechanism almost by tradition—although, as noted above, they appear as residualistic welfare markets since they often do not go beyond granting rough economic incentives. The so-called ‘Riester pension’ scheme in Germany (see Viebrock 2004 and chapter 4) is emblematic of a more interventionist approach, as the state not only pays direct subsidies to holders of private saving plans but also heavily regulates the contents of these plans. More generally, a whole variety of similar interventionist mechanisms for ‘adapting private pensions to public purposes’ (Whiteside 2006; see also Hyde et al. 2003) exists worldwide.4 Granted, market mechanisms remain vital here, as the decision on whether, and how, to ensure protection against social risks is laid in the hands of the individual ‘consumer.’ As the supply side is highly differentiated and often opaque, however, many welfare states provide (more or less) detailed market regulations. What is more, experience shows (see chapter 4) that subsidized welfare markets need recurrent regulatory intervention, unless classical social policy aims, such as broad and even coverage, are taken from the welfare state’s agenda. In the field of social services, (quasi-)statutory subsidies also adopt the form of a voucher handed over to individuals eligible for public support (see Rathgeb Smith 2002, 86–87, for the case of the United States, or Lundsgaard 2006, regarding other OECD countries). The most widespread variety of subsidized welfare markets are arrangements known under the label of direct payments (Glasby and Littlechild 2002). Originating in claims of the disability movement and, more generally, academic middle-class citizens interested in more discretion over the use of public services, the basic idea behind this model is to yield opportunities for ‘buying independence’ (Glendinning et al. 2000) by enabling welfare recipients and users of public services to take informed decisions on how and when social support is to be provided. In as much as case managers are involved in the process of assessing needs, selecting services, or employing a personal assistant, and to the extent that services or assistants are under public quality inspection, direct payment schemes are coupled with quasi-market mechanisms. Direct payments also exist in the form of allowances useable for a list of services, the range and character of which is defined by (quasi-)public bodies. This is the case for German long-term care insurance and, implicitly, the French ‘personal allowance’ (see chapter 4). Here as well, subsidies are granted for paying providers who compete on a market; yet market supply may be under tight regulation. On the other hand, direct payments may imply a tendency towards (more) spot purchase of services and less quality inspection, especially where underfunding and lack of support go alongside their establishment. Given the limited take-up rates internationally, they thus far prove ‘a component of, rather than a competitor to . . . [publicly

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managed] social care systems’ (Lyon 2005, 241); yet they may exhibit an inbuilt tendency to crowd out the ultimate public responsibility for good quality and broad coverage. Against this background, it comes as no surprise that many have seen traditional (social) policytakers becoming capricious and fussy customers of a new welfare industry. Indeed, subsidized welfare markets are a response to, or a trigger of, what many term welfare consumerism (O’Reilly 2001, 36; Kemshall 2002, 69; Powell and Wahidin 2005, 79; see also Baldock 2003a; Newman and Vidler 2006). To some extent, welfare consumerism is pushed by, or even originates from, charters or public programmes like the recently introduced ‘choose and book’ system in the British National Health Service.5 This example illustrates that consumerism can also pervade managed welfare markets. In practice, welfare consumerism may enhance the autonomy of citizens in need of social support, but it may equally produce tensions between competing principles of social welfare provision, such as efficient resource allocation (undermined by volatile consumer choices) or professional accountability (called into question by an ‘all-to-the-customer’ culture).

ORGANIZATIONAL LANDSCAPES AND THEIR DYNAMICS As set out in the introduction, this study provides an analysis of both the structural development of welfare markets and their cultural embeddedness. To understand the architecture of these markets and to grasp the range of actors involved in their shaping, an assessment of the organizational fields typical of marketized welfare provision appears indispensable. Charting these fields for each of the jurisdictions under study here, and concerning both retirement provision and elderly care (not to speak of social welfare provision on the whole), would imply a chapter on its own and certainly go beyond what is needed for this study. Thus, the final section of this chapter is confined to a rough picture of the organizational landscape of, and the major players engaged in, managed and subsidized welfare markets. Different types of actors have to be distinguished. To begin with, there are the traditional players such as government, public authorities managing social services, and specialized welfare agencies. In the early years of the welfare state, social welfare provision was incumbent on local bodies, with this tradition implying a sometimes strong divide between local and central governance. As noted earlier, the rise of welfare markets urges local welfare bureaucracies to develop new routines and to adapt themselves to a changing role set which now includes, amongst other things, business-like budgeting and competitive contracting. Moreover, with central governments operating as (quasi-)market regulators, the overall division of labour is changing, as evidenced by the extensive (international) debate addressing new forms of ‘multilevel governance’ (Bache and Flinders 2004) and what some call the

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The Culture of Welfare Markets

‘dispersed state’ (Clarke 2004, 116). This debate centres on developments towards multitiered governance, with new patterns of interorganizational relations in the social welfare and health care sector as a consequence. The instigation of novel quangos, such as watchdogs, quality inspection agencies, or pension protection funds, is emblematic of this. However, the welfare state has never been a closed shop. Throughout the twentieth century, the management of social welfare provision was often devolved to specialized welfare agencies. While many countries set up statutory schemes overseen by a centralized bureaucracy6, others left the management of social welfare provision to collective actors rooted in civil society. Concerning social security schemes in continental Europe, this implied a strong ‘nexus between industrial relations and social policy’ (Crouch 2000, 103), commonly referred to as being emblematic of a corporatist welfare regime. As the scope of social protection ensured by these agencies decreases with the rise of welfare markets, this nexus is prone to become weaker. It may, however, be revived through new functions awarded to the social partners, such as the brokering of defined contribution (DC) pension schemes, like Germany’s or (more timidly) France’s. Notwithstanding such opportunities, the process of marketization urges these specialized welfare agencies to redefine their mission and their role in the governance process—a role which is, unlike the premarket area, no longer to be taken for granted. Similar developments affect care systems and their governance structures. In some countries, statutory bodies crystallized as lead-agencies throughout the twentieth century; in others, care systems were based on institutionalized partnerships between nonprofit organizations and public bodies.7 The market agenda, however, changes the situation of these traditional partners of the welfare state as they now face an intrusion of competitors into their inherited domains. Some of them are or feel obliged to find agreements with them (for example, in publicly promoted care networks). On the whole, however, most are pressured to develop unique selling points and to pursue distinctive strategies to survive in the new markets. In addition, novel actors take centre stage, while already existing organizations adopt completely new roles. This is particularly obvious in old-age provision. To begin with, practitioners concerned with products traded on welfare markets, namely retirement saving vehicles and elderly care services, are directly involved in the shaping of these markets. This group of actors includes associations of actuaries or of pension funds. More generally, where personal pension plans proliferate, financial advisers are becoming experts in social security, including on questions relating to state-subsidized retirement schemes. Professionals from the care industry are in a similar position as they may provide general advice about available services while simultaneously pursuing commercial interests in the marketplace. Role ambiguity is an inevitable consequence. Moreover, as noted above, the instigation or extension of market-based social welfare provision has gone alongside policies establishing new regulating agencies or broadening the remit of

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the existing ones. Agencies responsible for inspecting the quality of care or the soundness of pension schemes deploy their own strategies and become publicly accountable for initiatives taken at their own risk.8 In many cases, such agencies are also responsible for the admission of care providers or the certification of saving plans. Finally, private companies and their umbrella organizations become key players in the new welfare markets. After having been residualistic parties in state- or company-led systems of old-age provision during the postwar settlement, they now embody a (more or less) rapidly growing pillar of care and pension systems. Engaging in advertisements for insurance products or personal services, they structure perceptions about self-care, saving, and active choice. They also provide comments on the future of the public pillars, for example by portraying them as insufficient or nonsustainable or by arguing that public money is needed to make welfare recipients solvent. Equally, they are involved in the debate about how to ensure quality and responsive services in a competitive market. Last but not least, organizations concerned with public and user interests tend to gain new legitimacy. Traditional associations (pensioner groups, charities concerned with issues of old age, associations of welfare recipients) are led to address citizens in their role of consumers shopping around in welfare markets. They convey consumer interests and not just political claims. Consumer interests are also a point of reference for agencies that provide ratings of providers operating on these markets. This is fairly widespread in the financial services industry, where various media and—sometimes statesponsored—agencies evaluate the diverse products for retirement saving. Ratings also begin to play a role for the evaluation of quality in health and social care provision. In some countries, for example, inspection agencies publish data on quality outcomes for hospital and residential care. Furthermore, existing or newly created think tanks participate in the shaping of the organizational fields in question. Some scholars have seen the overall extension of market principles in old-age provision as being successfully promoted by a number of highly influential ‘messaging’ organizations, especially in the United States (see, for example, Béland and Waddan 2000). Aforementioned international agencies such as the World Bank or the OECD, also fall into this category. Moreover, the financial sector has in many countries sponsored specialized national think tanks for propagating private sector solutions to an alleged crisis of state-led old-age provision. However, there are also social-policy-oriented think tanks that advocate more or better state regulation.9 By and large, the role of think tanks is widely assumed to be growing, because welfare state administrations are increasingly drawing on nongovernmental experts or consultants; accordingly, the weight of these actors in contemporary politics is indeed awarded ever greater attention by the literature (see, for example, James 2004). When it comes to old-age provision, then, a wide range of organizations exert influence on welfare markets throughout the Western world. Private companies, nonprofit and public agencies, corporatist institutions, and a

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The Culture of Welfare Markets

range of (public) interest groups negotiate the terms of market regulation and influence the way marketized old-age provision is normatively framed. With regard to this framing, besides these collective actors, there are further players to whom the investigation presented below awards due attention. These players include experts and journalists whose statements not only transmit popular viewpoints relevant to a given (national) organizational field of old-age provision but also mirror the major frontlines of the public debate. Thereby, they provide a (more) consistent picture of opinions and claims surfacing in the public sphere. And, not for the least, they also actualize the cultural heritage in which the organizational fields under review are (still) embedded.

3

Welfare Markets in Old-Age Provision The State of Things

This chapter addresses the state of things concerning the development of welfare markets in old-age provision across the four countries under study in this book. The first section illustrates where and in which forms markets matter in the institutional design of old-age provision as it has taken shape in the new millennium. Drawing on the wider literature (part of which is cited throughout), this section includes a short historical account and a brief presentation of the ‘welfare mix’ in both pensions and care systems. The purpose of the chapter is not to burden the readership with detail upon detail of, for example, tax regulations, benefit calculation formulae, or detailed figures on (evolutions in) payments, and service delivery. Rather, it aims at picturing core structures of the systems to profile their overall character. This also applies to the second section retracing current dynamics in the role and organization of welfare markets, with the focus being set on market trends, evolving regulations, and major topics in the public debate. This section draws on a number of interviews with experts and more recently issued specialist media.1 The presentation is divided into country-reports and subsections for pension provision and elderly care.

3.1 WHERE THE MARKET COMES IN: CURRENT INSTITUTIONAL DESIGNS

3.1.1 Britain: Markets as Driving Forces Pensions The pension system in Britain2 is shaped by both the liberal (poor law) tradition in British public policy and the Beveridgean approach to social welfare provision. Through their emphasis on universal basic entitlements and (added) means-tested guarantees, postwar retirement policies pursued an antipoverty, rather than a wage-replacement, orientation. Nonetheless,

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The Culture of Welfare Markets

a social-insurance-based second tier was set up in the 1960s. The ‘graduated pension,’ later replaced by the ‘State Earnings Related Pension Scheme’ (SERPS) and then the ‘State Second Pension’ (S2P), was instigated as a core element of a National Insurance scheme3 amended by income-tested supplementary old-age benefits. While the new pillar was devised as a ‘fall-back earnings-related provision’ (Daykin 2002, 19) for those lacking generous occupational benefits, a fully fledged social insurance scheme never came into existence. Secondary pensions were consolidated in the 1970s but reduced in scope from the 1980s onwards. Employees were always given the right to contract out of National Insurance and to enrol in corporate schemes. They were entitled to rebates (that is, lower National Insurance Contributions), meant to compensate the loss in claims to state secondary pensions, and to a sponsoring of their employer (equal to its share of the National Insurance Contribution). In 1987, contracting out options were extended to personal pension plans and boosted by generous public bonuses.4 As regards the basic state pension, a major switch in its regulation was the indexing of its value in line with inflation rather than average earnings in the early 1980s (this will change from 2012 onwards, though). Additional means-tested pensions, becoming ever more widespread throughout the last decades, were amended at the end of the 1990s. Overall, a traditional feature of the British pension system is the public–private mix. Even as statutory pension provision achieved widespread public support during the 1950s and 1960s, corporate pension schemes grew ever more important. Having said this, occupational pensions were ‘semiautomatic’ (Rowlingson 2002, 631) for large sections of the workforce.5 Individual investments on the financial market were barely playing a role for the time being. Things changed, however, with the trend towards increasing company provision being reversed and with defined contribution (DC) schemes proliferating (see below). Basically, three public and two (in the medium term, three) private pillars can be distinguished, with the latter presenting different formulae. On average, the overall wage replacement rate as provided by all public tiers of the pension system amounted to half of work earnings as of the mid-2000s. Roughly 50 percent of the pensioners’ overall revenue stemmed from public funds, a quarter from occupational pensions, the remainder from money purchase schemes and further sources. The first tier of the public-pension sector provides a basic pension to every citizen over 65 and with a career in the ordinary labour market. This benefit, funded by a payroll contribution, is indexed on prices (until 2012).6 It includes spouses’ entitlements and also covers the self-employed. The scheme provides for a pension worth one sixth of average earnings (in case of full contribution records7). As the latter does not follow the evolution of general wealth, however, it meanwhile appears as an ‘eroding building block’ (Ring 2002, 553).

Welfare Markets in Old-Age Provision 25 Added to this basic tier comes a pay-as-you-go scheme8, making up a fifth of average earnings (again in case of satisfying contribution records). The latest version of this second tier—the aforementioned S2P—is gradually replacing the aforementioned SERPS and sees the wage-replacement rate rising to up to 40 percent for low-income earners. It includes a survivor’s pension and a credit point system (acknowledging, for example, the raising of children under 5 or care for frail citizens).9 Though resembling a social insurance scheme, the S2P looks like a flat-rate top-up to the basic pension, as the calculation formula is fairly degressive. Finally, for those who do not (fully) qualify for this second pension and/ or do not receive the full rate of the basic pension, a minimum income guarantee—since 2003, a Pension Credit—steps in. This third pension (which rises in line with earnings) ensures that the standard replacement rate of the second pension is achieved for any citizen.10 More than 20 percent of the current pensioners were receiving this credit with the onset of the new century. That a safety net exists for those who have not saved on their own has, however, been referred to by many as a disincentive problem, because retirees with incomplete contribution records and small private pensions forego part of the public credit. This has been seen as a key concern for those who want to (further) strengthen the private-pension sector, of considerable importance in Britain. There are powerful insurance companies and pension funds, the economic importance of which, measured in GDP shares, exceeds the weight of their counterparts in North America. Being remunerated on commission, this financial industry is investing the sponsor’s and plan holders’ contributions in bonds or assets to increase their value.11 As of the mid-2000s, approximately 60 percent of British households were eligible for payments from the private-pension sector in one way or another, notwithstanding that many had ceased to contribute to their plan. Not surprisingly, coverage exhibits a clear middle- and upper-class bias. To date, two subsectors have to be distinguished. Firstly, numerous employees are enrolled with occupational pension plans, of which many originate in collective agreements. There are huge differences in coverage according to occupation, industry, sector of the economy, business size, geographic location, degree of unionization, and sex. Accordingly, a worker’s position in the labour market has a strong impact on the generosity of retirement benefits. The bulk of public sector employees enjoys secure pension arrangements based on final salaries, earnings-related contributions, and a quasi-pay-as-you-go mechanism. By contrast, one in three British employers did not offer an occupational scheme at all as of the mid- 2000s. Altogether, about a third of the salaried population was covered by funded corporate schemes. Corporate pension plans are managed by trust schemes independent of their sponsor(s) or, in the public administration sector, by quasi-statutory agencies. By tradition, corporate pension plans are final salary schemes,

26

The Culture of Welfare Markets

with contributions being made by both employers and employees, and with the pension level depending on the length of employment in a given firm. The mechanism through which occupational pensions are provided is different in the case of DC schemes. These schemes, to which employers do not necessarily contribute, have been soaring from the 1990s onwards (see section 3.2). As pensions resulting from DC plans correspond to the plans’ performance on the financial market (and not to a previous salary), this segment of the corporate pension sector is much more exposed to market dynamics than its defined benefit (DB) ‘sister’. The influence of market dynamics is more blatant still for a second type of private pension, which is individual money purchase or personal saving plans, primarily in the form of a tax-advantaged ‘Appropriate Personal Account’ or a ‘Stakeholder Pension Plan.’12 Drawing on the aforementioned National Insurance rebate, above a sixth of the working population was holding saving vehicles on the retail financial market in the early 2000s; one in ten Britons had nothing but a personal plan besides basic public provision. These DC plans are freely negotiated between consumers and suppliers, with the latter typically being insurance companies operating on a competitive market. Suppliers are free to suggest high-risk investment. Compared to traditional occupational retirement provision, personal plans enjoy higher asset portability. All this is fuelling market dynamics in the handling of retirement saving. Altogether, the private-pension sector is subject to a number of regulations apart from tax exemptions, subsidies, and rebates. DB plans must provide pensions broadly equivalent to the public reference scheme (S2P), as well as a widow’s pension. They must also ensure the right to vesting13 after a job change. Accruals are inflation-proof up to a rate of 2.5 percent. Concerning fund management, one third of the trustees controlling a corporate pension fund (which always operates independently of the company) must be elected by the plan members. The pension must be guaranteed by the company, which is also legally obliged to mend incurring deficits within a ten year period.14 Employers have to reinsure themselves with a Pension Protection Fund, securing occupational pensions up to a certain ceiling should schemes become insolvent or be wound up. Compliance with these rules is overseen by two quasi-public watchdogs, the Pension Regulator and the Financial Services Authority (FSA).15 Concerning irregularities, holders of personal plans may address complaints to a pension ombudsman. Plan holders are not permitted to withdraw more than a quarter of the accrued savings as a lump sum (once during their life). Those who leave a job after two years are entitled to a payment out of their previous scheme.16 All these regulations set limits to the laws of the market. Regarding personal pension accounts, rebates and tax breaks are predicated on a number of regulations as well. The money built in a personal pension fund has to be used to buy an annuity income at the retirement date.17 Plans also must comprise a survivor’s pension. One special vehicle

Welfare Markets in Old-Age Provision 27 is the Stakeholder Pension Plan, which can also be set up by a company. (Unless an occupational scheme exists already, employers must offer their employees a gateway to them.) Holders of these plans, among them many nonworking and self-employed citizens, can receive direct public subsidies. The plan must pay 75 percent of the accumulated capital as a monthly pension.18 Moreover, a maximum rate of administrative charges applies. Given their close regulation, Stakeholder Plans are less affected by market dynamics than other personal saving vehicles. Like the latter, they do not, however, protect the accrued capital against devaluation. In 2006, the government decided to introduce (from 2012 onwards) a new type of occupational pensions (labelled National Pensions Saving Scheme), which will have to be sponsored by employers and will be mandatory unless enrolees opt out (see section 3.2). To date, however, employers are free to operate changes in pension settlements, especially about closing or winding up their scheme. Also, they may transform DB into DC schemes. In this case, achieved salaries and pension benefits are completely decoupled; market dynamics impact more strongly on retirement benefits as financial risks are devolved to plan members. Altogether, private pensions are in the habits of the British population. Even though many do not engage in pension planning and others do not keep up with payments into saving plans19, personal saving schemes have been quite popular since the 1980s, notwithstanding the relatively high administrative costs associated with most personal pension plans (up to 20 percent of the value of yearly contributions). Against this background, Britain can be viewed as a ‘pioneer in pension privatisation’ (Blackburn 2004, 559). Market forces proved a force of change, with personal plans proliferating and the contracting-out mechanism making nonpublic schemes a ‘competitor’ (Ward 2002, 219) of second state pensions. To this, add the expansion of DC schemes that leave the pension level to individual investment skills, the vagaries of the capital market, and the open-end encounter between suppliers and consumers. Elderly Care The elderly care system in Britain is rather dispersed, with provision levels and patterns varying widely over the territory.20 Moreover, if compared to other nations, it is exposed to market forces to a comparatively high extent. Both outpatient nursing, incumbent on the National Health Service, and personal care,21 which is the responsibility of the social service departments of local authorities, are subject to quasi-market regulations, with case managers purchasing packages of care on behalf of care recipients in a more or less competitive provider market.22 At the same time, the system is highly regulated. Nursing is under the control of a Health Inspectorate, whereas personal services are overseen by a national quango registering and overseeing care providers.

28 The Culture of Welfare Markets ‘Market care’ (Means et al. 2002) is quite recent a phenomenon. In Britain, like elsewhere in the Western world, elderly care responsibilities were long viewed as lying with private households and voluntary agencies (partially funded by public bodies). The 1970s saw the rise of social service departments and public service facilities in both residential and, later on, domiciliary elderly care. Although public care homes were paramount, a good deal of residential care was supplied by small businesses and voluntary sector providers. The typical funding mechanism for suppliers other than in-house providers was long-term block and per capita grants. Many local authorities offered home care services for free, even though this varied over the national territory. During the 1980s, residential care facilities were mushrooming especially in the private sector, fuelled by nonmeans-tested benefits paid out of the Social Security budget. In the 1980s and 1990s, elderly care in Britain saw ‘a major shift from publicly provided care, free at the point of delivery, to private sector care funded by user payments’ (Hardy 2000, 50).23 In the care system as it stands as of the mid-2000s, local authorities are still the lead agency; they manage the lion’s share of the (formal) elderly care budget. Funding of both domiciliary and residential services often amounts to half of their overall budget. However, receiving cash-limited grants from central government, they are legally obliged to out-contract personal care services—or community care, as it is often called in Britain. Health authorities, which continue to be responsible for nursing, may be commissioners of NHS-external outpatient nursing at the regional level, yet this is not the rule. In most cases, outpatient nursing is provided by NHS district nurses employed by Primary Care Trusts (PCT)24 and following referrals from general practitioners or hospitals. Frail senior citizens run through a system of need assessment conducted with the participation of both the social service departments and the NHS. The services approved by the assessors are subject to categorical distinctions between nursing and personal care, even though some parts of England have seen experimentation with so-called Care Trusts, the remit of which is providing the whole bunch of services a frail elderly person might need. Concerning nursing, three bands of dependence apply; each band brings entitlement to a budget; should a person need continuing nursing (band three), personal care is paid for by the NHS as well. As regards domiciliary (personal) care, most local authorities have given up in-house provision and purchase services from independent providers. Rationing is commonplace, as local authority budgets are capped; funding is concentrated on the most needy—not necessarily the poorest but those who are isolated. Public entitlements to elderly care other than nursing and continuing care prove important, with more than two-thirds of the funding coming from the state. Entitlements are, however, subject to means-testing. Users whose assets (including the value of their residence, unless partners continue to live there) exceed a certain threshold incur fees up to the point at which

Welfare Markets in Old-Age Provision 29 they have liquidated their fortune. The same applies to residential and nursing home care. Relatives cannot be solicited for cofunding formal care provision. Moreover, nursing home residents and a considerable proportion of those cared for at home are eligible for a small ‘attendance allowance,’ a non-means-tested benefit to fund personal supervision. Social service departments also offer direct payments to be used to purchase a number of services individually. Wealthier senior citizens pay personal care services and residential care fees themselves. To date, the role of private long-term insurance appears limited. Several tens of thousands citizens hold prefunded long-term care contracts, introduced in the early 1990s, or immediate care plans (impaired-life annuities paid out to providers) based on equity release schemes paying out house equity to fund residential care. Nowadays, most residential services are run as private businesses. While a number of chains are operating in the market, the majority of the care homes are tiny businesses. A small proportion of services are run by the voluntary sector, and the share of the public sector is (now) minor. The purchasing bodies negotiate contracts with providers that usually make bids in a tender. In residential care, contracts may be based on prices for a package of places or single user-related arrangements. In the fragmented market of domiciliary provision many suppliers operate on a fee-per-hour basis set prior to purchase, some rely on block contracts, very few on long-term grants. Private businesses are paramount here as well. Voluntary agencies are important players only in ‘soft service’ provision, such as meals-onwheels, transport, daycare, care attendant services, or respite care.25 Part of the latter is commissioned by public bodies as well, in many cases via spot contracts and along with charges imposed on users.26 Altogether, there is great variation in this kind of home help provision across the country. The market game in the British elderly care system exhibits particular characteristics. As public authorities buy services from independent providers, competitive supply structures and price bargaining are widely developed.27 The funding agencies are often able to control the terms of trade and to keep prices down. In some fields, moreover, commissioning is subject to a government-led performance regime that urges purchasers to deliver value for money through a system of carrots and sticks (additional funding in case of success, sanctions in case of failures). Performance-related pay, known from the business sector, has expanded into the public management of social (and medical) care. Furthermore, the market rationale impacts on the decisions of users. When it comes to residential provision, many wealthier citizens make arrangements entirely outside the case management system, since public support is means-tested and rationed. Also, senior citizens entitled to public support sometimes sidestep the public assessment system to keep control over their assets for a while. Thus, although social service departments are heavily subsidizing care home placements, elderly people and their relatives are driven by concerns over whether they will find an affordable home of their choice and seeking best value for money.28 As to home care,

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The Culture of Welfare Markets

it has, hitherto, been quite rare that services are privately purchased from independent agencies. In most cases, relatives and volunteers, or the grey market, appear to step in when additional help is needed. Against the overall background, then, one can say that markets have appeared as forces of change in the care system as well. This system was largely socialized until the 1980s, with an independent (mostly voluntary) sector as a junior partner in public service provision. This changed markedly thereafter. Granted, a large proportion of the funding comes from the state and the access to (publicly funded) care is channelled through a standardized procedure of needs assessment and case management. At the same time, however, a good deal of care provision is handled by commercial actors and is subject to various competitive pressures.

3.1.2 Canada: Markets in Uneasy Coexistence Pensions Departing from a poor law tradition, Canada’s welfare state moved towards ‘more collectivist social policies’ (Lightman and Riches 2001, 47) during the twentieth century, and so did the schemes providing for retirement income. Today, the pension system resembles its British counterpart in many ways. Overall, it appears as a four-tier complex composed of two publicly regulated schemes on the one hand and a two-tiered private-pension sector on the other. A few regional particularities exist concerning the system’s design and regulation.29 However, this overview will largely sidestep them as they are not outstanding when considering the role of the market rationale within the overall system. The Canadian pension system can generally be seen as being instilled with what Snell (1996, 101) has termed a ‘culture of entitlement.’ Even prior to the upswing of the Beveridgean approach to social welfare provision, the federal state introduced a universal flat-rate basic pension scheme, amended by income-tested supplementary old-age benefits during the 1960s. At that time, it also instigated a compulsory, state-run contributory scheme which ended up outperforming its British counterpart in terms of generosity and coverage at the end of the twentieth century. Contractingout policies never did play a role in Canada. Rather, the ‘“continuity of income” approach’ typical of Bismarckian social insurance schemes (like the German or the French one, see below) proved a driving force of pension reform, with the leitmotiv being ‘social security for all instead of social assistance for the needy’ (McDonald and Wanner 1990, 32). This vision was never fully realized, yet it is important to note that it did coexist with a market rationale which had a considerable impact on the remaining system. Similar to the development in Britain, corporate retirement provision was always conceptualized as a key component of the pension

Welfare Markets in Old-Age Provision 31 system, with final salary schemes becoming a taken-for-granted vehicle for the bulk of the (male) salaried workforce. This has begun to change only recently (see section 3.2). The public system was consolidated over the last decades of the twentieth century. Although the two biggest provinces, Ontario and Québec, disagreed about strengthening the contributory system (which Québec preferred over extending the role of the private sector), the public-pension sector, after all, went through still waters. Apart from some measures making early retirement less attractive, the decisions taken following the ‘great pension debate’ (ending in 1987) had a twofold impact: Firstly, they bolstered the public tier through a marked rise in contributions30 and the introduction of prefunding in the entire Canadian Pension Plan (CPP) and Régie des rentes du Québec (RRQ) system, which thus were ‘going to market’ (Cooke 2003); conversely, suggestions to raise retirement age or to reduce entitlements were both abandoned. Second, reforms (further) encouraged private saving through substantial public subsidies. Today, the current public pension system of Canada exhibits ‘an enriched flat benefit system that is highly redistributive’ (Myles 2006, 74). Its universal character especially materializes in comparatively generous basic pensions granted to each citizen. As of the mid-2000s, the first tier of the public pillar awarded each senior citizen aged 65 or more a pension amounting to a third of average wages. In essence, this first tier consists of a basic benefit called ‘Old age security’ (OAS)31 and a meanstested scheme, labelled ‘Guaranteed Income Supplement’ (GIS), which provides top-up benefits for those with no further entitlements or revenues. Resourced with federal tax, both schemes are managed by central government. Some provinces grant additional (small) allowances to poor pensioners so that minimum benefits often head towards 40 percent of average wages.32 The second tier is managed by the CPP and (in Québec) by the RRQ. Based on achieved salaries and some specific access factors,33 this second pension is indexed on prices and includes spouses’ entitlements as well as disability benefits. Both of the plans are funded by a payroll contribution approaching 10 percent of the salary, with half assumed by employers. The self-employed are compulsory members too and charged the full rate. Contributions exceed current payment obligations in order to prefund the scheme, with the amount of entitlements being expected to significantly grow in the future. Statistically, the scheme provides a per-capita benefit worth 25 percent of average wages. Even though the second pillar is statutory in kind, it is linked to the market by the fact that it is partially funded and heavily engaged in capital investment—a net difference to the public tier of the British pension system. At the onset of the scheme, only the Québec branch of the second tier was operating in this way;34 yet later on, the CPP switched from a pay-as-yougo system to a semifunded model as well. Until the late 1990s, the Plans’ investment policies addressed relatively safe vehicles—such as government

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The Culture of Welfare Markets

loans—but they have been relying more vigorously on the stock market since then. By tradition, the private sector plays an important role in the Canadian pension system, given the ‘deliberate limitation of earnings replacement by the public pillars’ (Li 2006, 104). As of the mid-2000s, about half of all paid pensions stemmed from private or corporate saving plans. Moreover, about 50 percent of all Canadian households expected benefits from private pension plans in one way or another, some being partial pensions since contribution holidays were widespread. Most of these individuals belong to the middle and upper classes. The bulk of private entitlements is employer-provided, through so-called Registered Pension Plans (RPP).35 These DB schemes are resourced with contributions from sponsors and employees, although it is employers who are responsible for funding the schemes adequately.36 In Québec, workplace pensions have to be administered by a committee representing plan members and pensioners. Moreover, in many parts of Canada trade unions participate in the plan’s governance; in some cases, they also manage schemes of their own. Payments depend upon former salaries, with the reference period ranging up to the last five working years and upon the length of employment in a given firm. However, as in Britain, employer-based pension plan coverage varies significantly according to occupation, industry, sector of the economy, size of enterprise, geographic location, degree of unionization, and gender. Moreover, benefit levels show huge discrepancies. Entitlements often are not indexed on inflation. The most generous schemes have been established for public sector employees, due, among other factors, to a strong increase in unionization after World War II. Different to most of the private sector schemes, the accruals of these employees benefit from inflation-proofing. In addition, their accounts enjoy high portability from one job to another. As regards the regulation of private sector occupational plans, general vesting standards apply.37 To qualify for the tax breaks granted to plan contributions and payments, all schemes have to be accepted and registered by a statutory watchdog, the Office of the Superintendent of Financial Institutions.38 They have to provide periodic payments after retirement and to be fully funded, unless the ‘too big to fail’ clause applies, which gives huge corporations some latitude in this respect.39 The pension standards legislation also fixes solvency funding requirements; by contrast, there are no provisions regarding the kind of capital investments operated by a given fund.40 Finally, the province of Ontario has set up a Pensions Benefits Guarantee Fund to step in should a sponsor go bust.41 Against this background, the market rationale impacts considerably on the generosity of nonpublic pension provision. Like in Britain, for most members of corporate plans, it is de facto a labour market rationale. Since benefits follow a final-salary logic (as long as workers remain employed by a given firm), they are buffered from the dynamics of financial markets, unless

Welfare Markets in Old-Age Provision 33 a company, or its pension sector, goes bankrupt. However, a remarkable number of (mostly small) employers offer DC schemes; as of the mid-2000s, about one in five holders of a private pension plan were covered by such schemes, which include company-based group plans.42 Avoiding various regulatory requirements, these sponsors expose their workers’ retirement provision to much greater market risks. This also applies to the second pillar of the private pension sector that consists of tax-advantaged individual saving products. The prevailing formula is called Registered Retirement Saving Plans (RRSP). By 1995, for the first time in the history of the Canadian welfare mix, the capital invested in these plans surpassed the amount of money spent on occupational pension provision. Personal DC schemes became quite popular during the 1990s because the tax breaks granted to plan holders were considerable if compared to other mainstream saving vehicles. However, low-income earners often are excluded from these schemes as means-tested public pensions eat up most of their savings. Personal plans are offered by banks and financial agencies, but also by some trade unions. In the former case, they are freely negotiated in individual encounters between suppliers and consumers and are therefore exposed to market dynamics to a comparably great extent. Nontaxable withdrawals from personal plans are permitted in situations of financial hardship (such as terminal illness) and also for first home building or training and higher education investment.43 Thus, the state to some extent encourages the use of pension savings as a means to other ends. Furthermore, no limits on charges or investment risk taking apply to RRSP.44 Legal criteria for calculating annuities, age or gender effects and any available health measures are lacking as well. On the whole, few limits are imposed on the market rationale here. Altogether, apart from personal pension plans, financial market transactions remained widely irrelevant to those covered by the private pillar until the 1990s, even though the individual situation on the labour market did matter and nonpublic retirement saving gained importance from the 1980s onwards. On the whole, the Canadian pension system is characterized by a firmly settled, but uneasy, coexistence of the market rationale and a more collectivistic mode of governance. Market forces are constrained by comfortable public pensions for low-income earners and by the robustness of DB schemes in the corporate pension sector. As section 3.2 will show, this robustness, however, appears to fade away with more recent dynamics of change. Elderly Care In Canada, the state is involved in long-term care provision to a relatively high degree.45 Most funding is public,46 although there are some long-term care insurance plans, including a number of corporate schemes, which cover additional expenses due to long-term care needs (on a low scale and level).

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The Culture of Welfare Markets

According to national and provincial jurisdiction, elderly care has to be available to anyone in need. However, estimations say that 85 percent of care hours are provided privately. Moreover, some confusion exists about what kinds of services are included in the public guarantee. Although nursing in long-term care institutions or at home is often considered as being covered by the national health care system,47 care provision is not fully included in the system and is largely regulated by the provinces. This is why the landscape of elderly care in Canada is often referred to as a ‘policy mosaic’ (Hirdes 2001). Throughout the various provinces, access to publicly regulated home care services is subject to interpretation and often conditional on particular criteria, such as the extent of frailty, low income, or lack of informal support. Concerning residential care, entitlements are broader, although user fees are charged differently across the provinces. Senior citizens unable to pay their due are entitled to a minimum standard of care, and those who can afford to spend more may opt for more comfortable housing solutions. It is noteworthy that, like in Britain, most frail elderly people enter residential care through a direct transfer from hospital. Hence the access to residential care is frequently prechannelled and not subject to individual choice. It is the provinces that are responsible for funding care services; yet they inject a proportion of federal state money earmarked for social or health care into services for the elderly. Concerning further details, the following concentrates on Québec and Ontario, two provinces which, however roughly, reflect the spectrum of approaches underlying the organization of elderly care across contemporary Canada. In both provinces, frail senior citizens largely depended on their own assets, their family, and charitable organizations until the state stepped in from the 1960s onwards. The following decades saw a rapid growth of public provision, especially in the field of residential care. As to home care, the provinces funded some care services delivered by public or nonprofit agencies. Yet supply was long quite patchy; frequently, senior citizens lacking family support had to run down their private assets to receive care. User fees were commonplace, with upper limits set by the governments. The overall situation was slowly changing during the 1990s, with new public policies being enacted at the federal and, in particular, at the provincial level. These policies aimed at accelerating hospital discharges, with the focus set on the promotion of home care. However, waiting lists persisted for both domiciliary and residential care. Concerning the latter, for-profit provision was a widespread pattern throughout the postwar decades. Largely funded by the federal state, the sector was however closely regulated by the provinces. For instance, the latter issued, and still issue, long-term licences for running a care home. Up to the present, moreover, public authorities fix user fees depending on a person’s income and the quality of the care home. Like in Britain, relatives are not solicited to cofund formal care provision—a regulation emblematic of a social-citizenship approach.

Welfare Markets in Old-Age Provision 35 Apart from the use of private home helps, the market rationale, then, played but a marginal role in the entire care system during the postwar decades. The final years of the twentieth century, however, saw notable changes. A case in point is home care services in Ontario. For a long time, these services were delivered by a mix of nonprofit or municipal agencies, with the provincial and the federal state carrying the financial burden on the basis of grants and direct core funding. A reform enacted in 1996 created Community Care Access Centres (CCAC), operating at regional level as arms-length public gatekeepers responsible for need assessment and the administration of a quasi market for nursing and personal care. Especially in the domiciliary sector, both for-profit and nonprofit providers—holding an equal share of facilities—are now bidding for contracts these centres award according to the perceived quality and the price proposed in a bid.48 Services remain state funded, but accredited hours are limited, given that CCAC operate with capped budgets. The employment regime governing home care is quite volatile: Most providers are funded on a fee-per-visit basis and employ staff by offering them an elect-to-work formula giving them choice over working hours and linking their remuneration to the number of clients seen. Additional services are provided through a large number of publicly subsidized community support centres which operate outside of the CCAC umbrella and deliver meals on wheels or respite care; some of them also organize volunteer activities such as befriending. Concerning residential care, 80 percent of the suppliers hold a for-profit status.49 Nursing homes are regulated by a public Long Term Care Statute that ensures government funding and embraces rules for accommodation charges. In the contemporary care system of Ontario, then, the market rationale has an impact mainly through the afore-sketched quasi-market regime; moreover, there is a grey market on which individual households purchase personal care. Direct payments to users do not exist. Québec presents a different picture. A striking particularity of this province is the existence of integrated community care centres responsible for social support, nursing, and primary medical care. These Local Community Care Centres (CLSC) were instigated in the early 1970s as a substitute for a patchy network of nonprofit providers linked to the Catholic Church. The centres recently merged with regional hospitals and with residential care facilities into the Health and Social Services Centres (or CSSS). These regional centres are public agencies run at the local level and involving users, professionals, and government representatives in their administration. They provide need assessments (using a five-bands-of-dependence grid) and manage both residential and domiciliary care services. The regulation of residential care largely resembles the situation in Ontario. Since the 1980s, the private sector has been on the rise. As of the 2000s, two-thirds of care homes are run by private businesses50 whereas the public sector focuses on care-intensive provision, which, however, is

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The Culture of Welfare Markets

affected by a lack of places. Private homes often host senior citizens on the basis of a per-capita funding by the province. Regarding home care, the community care centres, while holding a remit similar to that of their Ontarian counterparts, are not involved in a managed-care regime. Rather, they are delivering services themselves or commissioning them through bilateral agreements. The latter applies to community organizations delivering ‘soft’ home care services independently on the basis of block grants51, but also to private nursing agencies and firms belonging to the so-called social economy (Vaillancourt et al. 2000). Nowadays, ‘social enterprises’—which operate as independent nonprofit organizations with economic purposes and a public remit to combat unemployment—are providing the bulk of personal care services in Québec.52 Against the background of capped budgets, the range of services provided or commissioned by the CSSS varies from one care centre to another so that facilities are unevenly developed across the province, regardless of uniform administrative structures. The management of care provision is not competitive, but there is a potential for a market rationale proliferating in this province as well. This, first of all, pertains to the private care home sector, which is largely unregulated. Moreover, the CSSS subcontract nursing tasks to for-profit agencies that have spread in urban regions from the 1990s onwards. Though public policies have officially not intended to introduce a pluralistic provider structure, some CSSS nonetheless select these agencies from a (more or less) open market. In addition, the aforementioned social enterprises busy in the field of personal care exhibit a potential to operate as market actors as well. They are entrusted with responding to demands from frail senior citizens who are entitled to tax exemptions and to direct payments earmarked to pay for these services; depending on the users’ income, the overall subsidy can cover up to two-thirds of the incurred expenses. Some of these providers however offer more sophisticated services to their clients, reaching beyond the basket of services commissioned by the CSSS. As in Ontario, moreover, a parallel market for (more extensive) personal care exists, due to caps imposed on the centres’ budgets that imply a de facto rationing of services. Part of this market is made solvent though direct payments, the use of which has been extended over recent years from the physically disabled to elder citizens. To recapitulate, the market rationale has found its entry into the Canadian elderly care system as well. However, welfare bureaucracies are key players in this organizational field, which largely relies on public funding—apparently more so than the British system.53 The (more or less) systematic recourse to the for-profit care home sector, on the one hand, and the consensual cooperation between public agencies and independent providers (in Quebec), on the other hand, reflect an uneasy coexistence between state and market. However, the creeping downsizing of the public care home sector as well as the profound reorganization of the

Welfare Markets in Old-Age Provision 37 domiciliary care branch in Ontario appear to change the rules of the game more profoundly, as will be set out in greater detail in section 3.2.

3.1.3 Germany: Markets as Successful Newcomers Pensions Germany’s pension system is widely known as a (quasi-)public, pay-as-yougo, DB scheme in which benefits are related to current wages and a number of specific access factors.54 Although the social insurance scheme saw some fragmentation throughout the twentieth century (the various funds merged in 2005), it exhibited a universal character insofar as it covered the overwhelming part of the waged population (including spouses). Importantly, the main public scheme as devised in 1957 was developed with the intention of securing the standard of living and not merely avoiding poverty during old age. Notwithstanding the supremacy of the (quasi-)public pillar, the postwar settlement also saw more market-based patterns of retirement provision, as small-sized occupational provision became widespread throughout that period. Yet it was only recently that German embarked on the international movement to institutionalize funded pension plans (beyond those held by the self-employed). Regarding the federal pension fund, generous wage-replacement rates and the pensions’ indexation on wages made pensioners mechanically participate in the increase of the nation’s general wealth over many decades. With the pension level being fixed at approximately 70 percent of net average earnings until the late 1990s,55 most male German pensioners could expect their income to keep pace with the economic evolution of their country. Moreover, the German system as it grew after World War II exhibited some ‘solidaristic elements’ (Clasen 2005, 97) in the form of credits covering noncontributory periods.56 Widows’ entitlements were generous, too, yet women often relied on derived pension rights. Until the late 1990s, the overall generosity of the public scheme persisted,57 notwithstanding ad hoc and small-scale measures entailing minor reductions in pension provision. Contribution rates were raised and more tax money channelled into the scheme. Also, a regulation ensuring a hypothetical minimum contribution record was phased out—this removed an important redistributive element from the public scheme.58 Moreover, reforms in the 1990s made early retirement less attractive. Broader revisions were, however, left to laws passed after 2000. Up to this date, pension provision in Germany was widely independent of market forces. Indeed, the private-pension sector played a marginal role until then, with corporate scheme benefits representing just 5 percent of all paid pensions. Company schemes were paramount, though.59 Many large companies provided defined benefit pension supplements (and invalidity insurance) to their

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employees, mostly by means of a book reserve reducing the tax load on their profits and serving as internal investment resources. With entitlements being guaranteed after ten years of service at a given job,60 occupational pensions were largely seen to encourage the employees’ loyalty to their company. The laws of the market were at issue insofar as the access to an occupational pension supplement was contingent on the employees’ position within the hierarchy of the labour market. In the public (administration) sector, however, trade unions and employers passed collective agreements on an occupational scheme which, over decades, resembled a largely employersponsored pay-as-you-go plan, covering nine in ten (male) employees. A recent shake-up has however changed its character (see below). Together with the pension budget for civil servants, public sector schemes outside social insurance provided approximately 10 percent of all paid pensions as of the mid-2000s.61 Fully funded pension plans barely existed in postwar Germany. Since occupational schemes provided defined benefits as proposed by the sponsor or a collective agreement, (financial) market dynamics were irrelevant to their enrolees. This was less the case with life insurance policies, purchased by ever more Germans during the postwar decades. This was encouraged through fiscal incentives granted if rules of prudent investment were respected by the insurer. Regarding the influence of the market rationale, a cap on stock market investments was imposed on plan managers. Moreover, national law stipulates that suppliers must guarantee a minimum interest rate (fixed by the state in line with inflation); however, whether and how far returns go beyond that depends on the plan’s performance on the financial market. Although, for most Germans of the postwar epoch, life insurance served as a secure long-term safeguard against unforeseeable (family) hardship, it proved more crucial for the retirement provision of self-employed workers not covered by the public scheme(s).62 At the onset of the new millennium, less than 5 percent of all retirement benefits stemmed from personal pension plans, however, one in three Germans were entitled to (mostly small-scale) private pension payments. Today, all employees working outside the civil service enrol with the German federal pension fund. This fund is a clear expression of German welfare corporatism and its ‘interrelated institutions of collective welfare, finance, and governance’ (Clark 2003, 115). It is resourced with compulsory payroll contributions, half of them being assumed by the employer, and subsidies from the public purse. The administration of the federal pension fund lies with representatives of trade unions and employers’ associations. In that sense, the fund is a quasi-public scheme enjoying some strategic autonomy. The scheme’s managers are not only involved in the everyday administration of the fund but also prove influential when it comes to political regulations of the overall system. Civil servants are covered by a separate, final salary scheme financed through general tax revenue. Regarding benefits, this scheme is (still) more generous than social insurance. Citizens who do not

Welfare Markets in Old-Age Provision 39 qualify for either public scheme are entitled to social assistance (this is a small part of the population, though). While the public pension fund has remained the leading pillar, the pension reforms of the new millennium reflect a ‘paradigm shift’ (Schmähl 2004), viewed by many as ‘path-breaking’ (Lamping and Rüb 2004, 175). A prerequisite for the proliferation of private pensions was major revisions in the public pension scheme(s). The general idea of the reforms undertaken between 2000 and 2006 was to decelerate the increase of the overall public pension budget as entailed by longer life expectancy and falling birth rates.63 The (future) standard wage-replacement rate was markedly reduced for the younger generations. For those aged 40 and less in 2004, it will achieve little more than 55 percent of real wages at the age of retirement, instead of the 70 percent achieved during the 1990s.64 As compensation, the state encourages citizens to shop around for a fully funded personal pension plan certified by a national quango with a remit to oversee the entire market for financial services. Plan holders with modest incomes are granted direct flatrate subsidies.65 On average, the state subsidy amounts to 30 percent of the capital saved in the first couple of years. For those not qualifying for the Riester subsidy because of high incomes, generous tax breaks, much more important than those granted in the past, step in66. Moreover, all contributions to personal retirement plans are tax-exempted, with pensions being subject to deferred taxation in the same vein. This net encouragement to save voluntarily for retirement is meant to fill the gap created by the reform of the public pillar. The new private pension plans are under close regulation, though. Personal pension plans qualify for state-sponsoring only if they protect the accrued nominal value of the invested capital—in this respect, they are designed as semi-DC plans. Moreover, return on investment depends on the plan’s market performance, a minimum rate of interest has to be guaranteed (in 2007, 2.25 percent). And plans must provide monthly payments during old age. Charges have to be apportioned over a period of five years, and contribution holidays are permitted. All suppliers of saving plans have to reinsure themselves against insolvency. A national quango (carrying out stress tests) checks the financial viability of insurance companies. The aforementioned pension reform grants employees subsidies as well in case the latter enrol with funded corporate saving plans. Most of the aforelisted regulations equally apply to these plans. Employers are obliged to recommend such a plan to their workers if the latter make a motion. Moreover, drawing on the legacy of the corporatist ‘social partner model,’ collective agreements between trade unions and employer associations may build a framework for the new occupational schemes.67 Thus, the social partners may preselect a plan relying on a mixed asset portfolio and suggest this plan to workers of their industry. Overall, the new corporate schemes, reinsured with a protection fund, have little in common with the traditional DB model. Benefits are no longer (fully) paid by the employers (though liability lies

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with the latter). Rather, the dominant pattern is that of employers approaching financial retail agencies on behalf of their personnel. In case of demand, these agencies negotiate contracts with each employee. Law stipulates that a variety of occupational pension plans qualify to be subsidized by the state, provided that these plans respect a number of prudential rules. Portability is widely ensured. Provision formulae range from employer-sponsored mutual funds through collective life insurance to investment funds, with only the latter investing in the stock market on a broader scale (here, no minimal interest rate applies). In most cases, accrued assets are secured by a protection scheme. An additional special offer introduced by the pension reform is the salary sacrifice option. Workers are invited to forego part of their wage while their employer pays this sum, including social security contributions otherwise due on this amount of money, into an out-contracted pension plan. For the worker too, these investments are exempt from social security contributions and from taxation. As with personal pension plans, lump-sum withdrawals exceeding 30 percent of the capital imply the reimbursement of these advantages. It is noteworthy moreover that the public sector’s occupational pension plan has meanwhile been transformed into a semifunded scheme. The benefits granted by this scheme depend de facto on both the inherent ‘dependency ratio’ (retirees as opposed to contributors) and the profitability of the fund’s investments on the financial market.68 Given the aforementioned regulations, the exposure of the new saving schemes to market forces is moderate although the ultimate retirement income plan holders achieve now depends, much more than before, on the economic performance of their individual scheme. Occupational DB plans increasingly disappear. Life insurers carry on marketing their traditional personal saving vehicles since accruals from life insurance policies continue to enjoy (albeit markedly reduced) preferential fiscal treatment at the point of being paid out, in contrast to all other types of retirement saving. Nonetheless, market pensions are successful newcomers in the German pension landscape. Millions of citizens have contracted a Riester pension or a new occupational pension plan. Further, more risk-oriented financial products are marketed as a saving vehicle for later life. No doubt, Germany has arrived in the age of private pensions, with the latter blossoming alongside a strong, yet shrinking, public pension pillar. Elderly Care Germany ‘belongs to the minority of countries where the risk of care dependency is met by a universal system of rights and provision that separates the traditional link between care and poverty’ (Evers 1998, 95). Although this characterization of the German care system should be qualified (see below), the introduction of social long-term care insurance in 1996 was considered

Welfare Markets in Old-Age Provision 41 by many as a milestone in the history of the German welfare state.69 Prior to this, most frail citizens with chronic care needs entirely relied on their family or had to run down their assets before being entitled to public support. Indeed, a large majority of frail elderly people who were living in care homes received means-tested social assistance.70 The bulk of residential services was run by the so-called welfare associations which, throughout the twentieth century, had developed into strong networks of nonprofit organizations.71 Together with municipalities, these associations widely controlled the residential care sector, based on secure funding agreements with social insurance bodies and municipal welfare departments. Regarding domiciliary provision, municipalities and churches maintained light paramedical services provided by parochial nurses; provision, however, proved limited in scope. In some parts of the country, more professionalized home care services became accessible from the late 1970s onwards, when a number of local social centres were set up, either by municipalities or by welfare associations. For the time being, these facilities were referred to as a model for the future. Funded by various parties—the so-called sickness funds72, local authorities, the Länder, voluntary agencies—they were conceived of as multi-service centres based on professional standards, with complementary inputs from volunteers concerning, for instance, befriending or care attendance. User fees were insignificant. Thus, a small section of the frail elderly population was eligible for publicly subsidized domiciliary services even prior to the instigation of long-term care insurance. The introduction of the mandatory long-term care insurance brought considerable change. Based on payroll contributions and organizationally linked to the sickness funds, the scheme reimburses expenses incurred for home and residential care up to a certain ceiling. While 90 percent of the population are enrolled with the public scheme, the better-off are legally obliged to contract private insurance covering the same bunch of services. Several long-term care funds coexist. These funds, though subject to detailed public regulation, operate as autonomous nonprofit organizations and are put on equal footing through a system of cross-subsidization which does not, however, embrace the mandatory private plans. Need assessment is undertaken by a special medical service department loosely coupled with the sickness funds. Benefits are granted according to where claimants are located within a three-bands-of-dependence scheme. They embrace coverage for expenditures in residential care, accredited packages of domiciliary care, or cash benefits rewarding private carers (the latter two options can be combined). As of the mid-2000s, a majority of those entitled to benefits had chosen the cash option (about one million citizens).73 For each of the benefits mentioned, ceilings apply which are fixed by the state. As budgets are capped, the insurance does not cover the whole bill. Concerning domiciliary services, limits are set on the accredited amount of services a frail elderly person may be entitled to. Moreover, personal care is poorly reimbursed. Private purchase often is required, yet it is families who take most of the burden. Equally, the insurance defrays only part of the costs of residential provision. Here, means-tested social assistance steps in for those in need.

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However, (wealthier) relatives are solicited to cover the expenses incurred. As for voluntary private care insurance, plans are relatively widespread but usually grant but small allowances in case of evidenced frailty.74 Following the introduction of long-term care insurance, elderly care has become exposed to market forces to a notable extent. The insurance has made the demand for professional services much more solvent so that the volume of services provided has markedly grown.75 This occurred within a competitive system of service supply. Beneficiaries are granted lump sums used to contract an agency of their choice. The assessment suggests a care package but leaves scope for negotiation between the providers and the care recipient. With regard to domiciliary care, providers are reimbursed according to a highly standardized catalogue (mostly composed of care acts measured in time units), agreed between provider associations and the funding bodies at regional level. Care recipients are free to make a choice among services listed in this catalogue. From the individual suppliers’ point of view, it becomes critical to deliver the contracted care package within the prescheduled time frame. Return of investments also depends on wage costs incurring to the supplier. Hence, there are incentives to keep wages low, for example, by employing young workers or low-qualified staff. Regarding providers, private agencies are on equal footing with nonprofit (and public in-house) agencies.76 Between the mid-1990s and the mid-2000s, the number of providers went up by more than 50 percent, with private providers (now) holding half of the market. The bulk of these is small businesses founded by professionals with a career background in the (public) health sector. Market access is open to any entrepreneur able to employ care workers holding basic qualifications. While many providers offer services not reimbursed by the insurance, the volume of freely marketed services had remained limited. However, care attendance and housekeeping is purchased on the grey market whereas meals-on-wheels is offered by independent (often commercial) suppliers. Concerning residential care, law stipulates that full provision has to be guaranteed to those in need. 77 As in other nations, those relying on social assistance are left with a small amount of pocket money. More importantly, they have little choice as to where to go as the social assistance bodies strongly influence this decision. In most Länder (which are major administrative divisions in Germany), care home funding is calculated on the basis of a per-head-per-day formula, for each home separately and on a rate depending on the quality of the equipment and the services in supply. Theoretically, the funding bodies may pressure care homes to deliver at a low price. In many cases, however, they are on good terms with (traditionally nonprofit) suppliers; also, in densely populated regions care home places are often at a premium. Market rules apply much more where wealthier citizens are choosing their homes among a diversified supply of high-profile providers, with the long-term care insurance paying just a minor part of the bill. Especially in this segment, the commercial sector proves an important market player.

Welfare Markets in Old-Age Provision 43 As with pensions, market provision is a successful newcomer within the German landscape of elderly care. Nowadays, the market dimension comes in through both the necessity for many senior citizens to exercise choice regarding—and maybe individually purchase—care provision and the competitive organization of service supply. Despite the existence of a universalistic insurance scheme, Germany appears to spend less public resources on longterm care than Canada.78 Having said this, administrative bodies linked to the (semi-)public long-term care schemes oversee the market through quality inspections;79 moreover, care standards and prices (for reimbursement) are subject to collective bargaining with provider associations. In addition, regulation requires that elderly people needing care receive unbiased advice. The longterm care insurance funds have a remit to provide information and to explore available opportunities with those eligible for benefits. Moreover, professionals of the medical service departments of the sickness funds are obliged to visit care allowance claimants if these opt(ed) for the cash option. In residential care, the terms of the business still largely depend on gentlemen’s agreements between payers and providers.

3.1.4 France: Markets as Disguised Reality at the Margins Pensions In France, the state is commonly considered as ‘both the custodian of social solidarity and the regulator if the social contract binding the generations together’ (Clark 2003, 60). This is a major background for the emergence of a generous two-pillar mandatory pension system. The first pillar (belonging to the Securité sociale) was formed in 1945; the second complementary pillar, based on collective agreements between employer associations and trade unions, took shape in the years thereafter.80 Over decades, both pillars consisted of a multitude of particular subschemes; only recently have they seen a creeping development towards harmonization. Funded corporate pension plans remained confined to the elite of private sector managers, and private saving was concentrated on life insurance schemes, which are very popular in France. Strictly speaking, the market rationale appears widely absent from the retirement system; rather, the latter is subject to deliberate policies of social redistribution. Those first-pillar schemes that run into deficits receive cross-subsidies from other schemes or out of the public purse. Over decades, moreover, minimum provision and pensions based on one’s best years have set limits to actuarial calculations within the first pillar. As in Germany, the overall system has been developed with the aim of widely guaranteeing achieved living standards, at least for (male) average workers. Regarding the first pillar, two-thirds of the working population is nowadays covered by a general fund, while another fifth is enrolled with special public sector schemes. In addition, a unified mandatory scheme for

44 The Culture of Welfare Markets the self-employed exists. The system as it stands in the mid-2000s is based on payroll contributions, with roughly two-fifths of the contribution assumed by the employees in both the basic and the complementary schemes. The first pillar also receives a small injection of revenue from a solidarity income tax. Furthermore, a small funded supplementary scheme was introduced in 1999 with the aim of building a capital reserve meeting its future liabilities.81 The different first-pillar schemes resemble each other widely, notwithstanding some variety in generosity. The second mandatory pillar is rooted in a number of industry schemes (called régimes complémentaires), which over the years have become amalgamated at the national level even though the administrative distinction between usual employees and executives or upper management staff (cadres) persists.82 These second-pillar schemes equally are run on a pay-as-you-go (that is, DB) basis, with the pension level sticking to the record of payroll contributions paid over the life span. A major difference between the pillars is that the general fund and the schemes for public sector employees are governed by detailed statutory regulation, whereas the second mandatory pillar is subject to collective bargaining between employer associations and trade union federations. The social partners also partake in the management of the first pillar, yet they barely decide over what these schemes provide under which conditions (though they may de facto have a political influence on that). The first mandatory pillar can be considered a fully fledged social insurance scheme as benefits follow both professional achievements and a number of special access factors inspired by norms of ‘social solidarity’ (Clark 2003, 59). Concerning benefits, a range of social credits apply. These cover incurred family obligations, periods of unemployment and professional education, as well as bad years in an employee’s career.83 All first-pillar schemes comprise (means-tested) pensions for survivors. Moreover, the general fund (more precisely, a solidarity scheme linked to it) grants a minimum pension and a top-up on the pensions of low-income earners who are guaranteed a pension worth 85 percent of the state-fixed minimum wage (for a full career). Regarding the special schemes for public sector employees, there are differences in contribution rates, retirement ages, and formulae for calculating pensions. Altogether, these schemes (still) prove more generous than the general fund.84 The second mandatory schemes provide a top-up of the statutory pension the amount of which depends on the employees’ contribution records—more so than in the first pillar— and a limited number of special access factors. The wage-replacement rate decreases with income, especially for upper management staff, as contributions are capped. Although periods of unemployment are to some extent wiped out of the contribution record, the complementary schemes do not grant minimal pensions. However, widows are entitled to benefits without means-testing. At the turn of the millennium, the general fund and the special public sector schemes provided up to 50 percent of previous wages while the second

Welfare Markets in Old-Age Provision 45 pillar let the replacement rate rise up to 80 percent.85 With the reforms and revisions effected in 1993 and 2003, however, the mandatory pillars will prove much less generous in the future. Pension reforms have brought important changes in the first pillar. For instance, they have imposed a longer contribution record (160 trimesters from 2012 onwards) for a full pension to be granted.86 The calculation basis for private sector pensions has been extended from the earnings achieved during the best 10 years of one’s career to the best 25 years; in addition, pensions became indexed on prices. On average, the wage-replacement level ensured by both the first and the second pillar is estimated to drop by more than 10 percent by 2050 (on average). This prospect applies to public sector employees, too, as most of their former advantages are going to vanish.87 Given that employees may continue to retire around their 60s (as they have thus far), the real pension level is assumed to be considerably lower in the future than it has been in the recent past.88 As regards the complementary schemes, a number of collective agreements have reduced the purchasing power of the pension supplements since the mid-1990s. Against this background, France has now seen an ‘effort devoted to thirdpillar pensions’ (Roggen 2004, 613). Until recently, regulations explicitly fostering private pension provision were marginal, given that the mandatory character of the two unfunded retirement schemes had set limits to the respective demand. However, private saving for old age was by no means unknown to postwar France. As wage replacements were capped within the first and, to a lesser extent, within the second pension pillar, high-income earners always had an incentive to save for their later years. Large-scale corporations began quite early to offer their higher-waged employees a pension top-up (retraite chapeau). At times, these DB schemes were arranged via corporate capital provision; in other cases they were contracted-out to insurance companies. As the portability of entitlements was (and still is) very limited, markets dynamics remained restricted here. To this type of occupational provision, add a range of company-based long-term saving plans subject to collective bargaining between employers and trade unions at the shop- floor level. Explicitly, these DC plans, running over periods of eight or fifteen years, were never meant to be a true retirement saving vehicle although they increasingly came to be perceived as such. Until 2003, contributions to these schemes were fully tax-exempt provided they covered the entire personnel.89 Accrued entitlements persisted in case of a job change. As the employers’ contributions were tax-advantaged (and also partially exempt from payroll charges), firms agreed to sponsor these plans, which were mostly run by a small number of specialized banking institutions. In 2005, one in four employees held such a plan. A further variety of quasi-corporate pension provision is social protection schemes (prévoyance) against (among others) the risk of invalidity.90 Regarding the market dynamics applying to this array of collective saving schemes, the funds’ investment strategies mostly relied on secure bonds, and the agencies

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ensuring their management were barely competing for individual customers; their target groups were companies and industries seeking to externalize their saving and social protection plans. The market rationale was slightly more influential in the small-scale (supplementary) personal pension schemes available for public sector employees since the early 1960s. Set up by the trade unions, the business was outcontracted to the life insurance sector. Contributions are tax-advantaged provided the scheme guarantees a monthly pension. As public employees may individually join these funds, the products of the latter are subject to commercial marketing.91 The same applies to the tax-advantaged private pension scheme for self-employed citizens, introduced at the beginning of the 1990s.92 In addition, one third of the (adult) population holds a life insurance, with the amount of paid premiums making up more than twothirds of the overall yearly investment in the capital market. In France, life insurance is sometimes viewed as being a quasi-pension plan.93 The sector is highly regulated: Accrued benefits are tax-advantaged up to a certain ceiling; there are rules of prudent investment, with the bulk of the accumulated capital being traded on bond markets—even though recent years have seen the emergence of schemes relying on a riskier mix of assets. A particularity of the French life insurance sector lies in the existence of saving cooperatives, which are voluntary organizations contracting out the management of their members’ policies.94 Overall, then, a small pension industry existed in France prior to reforms enacted in 2003 (see below). Access to corporate retirement provision depended on one’s position in the labour market; concerning other saving vehicles, the development of financial markets had an impact as well. Having said this, many saving vehicles were based on collective risk. Also, by tradition, a high share of the saving capital has been invested in bonds exhibiting weak market dynamics. What is more, occupational and private pension provision altogether remained marginal when compared to the weight of the mandatory pension schemes. At the onset of the new millennium, only 5 percent of all retirees received a private pension, and not more than 10 percent of the workforce was eligible for such benefits after retirement. Against the background of the aforementioned revisions in the two mandatory pillars, however, voluntary pension provision appears in a different light. New regulations provide avenues to citizens seeking to compensate (assumed) losses in first- and second-pillar provision, with fiscal incentives which now explicitly address saving for retirement. This may provoke the ‘end of (French) exceptionalism’ (Mandin and Palier 2005) characterized by the net hegemony of nonmarket-based solutions to retirement provision. The new landscape of private pension provision consists of two closely regulated vehicles, called popular pension saving plan (PERP) and collective pension saving plan (PERCO). The former rests on an individual savings account; the latter is a corporate scheme (also available for networks of several small companies) that heavily draws on the regulation of

Welfare Markets in Old-Age Provision 47 the preexisting long-term corporate saving plans and provides a ‘semicollectivistic’ avenue to funded saving plans. The PERCO offers advantages to employees of any income group, as it may be sponsored by employers to whom tax breaks and exemptions from social security contributions are granted.95 However, the plan is only accessible where the employer has signed a collective agreement with trade unions; those firms covered by an industry-wide agreement over occupational long-term saving schemes are automatically eligible for the programme. The new schemes do not follow the tradition of the (marginal) DB schemes (retraites chapeau) but are based on a DC formula. They are meant to replace the former occupational long-term saving schemes, with the related tax breaks being more generous than those applying to their predecessors. On behalf of the social partners, the schemes are managed by financial agencies legally obliged to hold a mixed portfolio of bonds and assets, with one mandatory option being sustainable or socially responsible investments. Accrued benefits can be withdrawn from the plan prior to retirement only in the cases of death, invalidity, unemployment, indebtedness or a property purchase; when the plan has expired, its holder may choose between a lump sum and an annuity. Concerning the new personal pension formula (PERP), contributions are tax-exempt up to a ceiling of 10 percent of achieved incomes (with the exemption being capped). As half of the French population does not pay income tax, and as the fiscal advantage appears minor for those with a low tax burden, the new vehicle is an upper-middle-class instrument.96 Contracts have to ensure that 75 percent of the accumulated capital is used for the payment of a monthly pension. The terms of business are freely negotiable, for example, with respect to a widow’s pension and also as regards the riskiness of investment policies. The regulatory framework sets out life-styling as a standard management tool; life-styling means that assets in a plan’s portfolio are gradually shifted into less volatile investments to reduce the risk of a sudden downturn in the stock market at or nearing retirement.97 Contractors may also opt for a plan entirely held in bonds, offering a guarantee of the nominal investments. The transfer into other plans is possible but subject to contract penalties. Concerning governance, the PERP draws on the model of saving cooperatives, with subscribers forming an association out-contracting their plan’s management. With these new vehicles for retirement saving, France has joined the international movement towards mixed pension systems, at least when regarding the regulatory landscape. To some extent, marketized pensions are a disguised reality at the margins, given that the bulk of the system’s stakeholders does not consider them as strategic vehicles to provide retirement income. Moreover, the regulatory framework sets limits to market dynamics unfolding in this sector. However, retirement provision other than through mandatory pay-as-you-go schemes meanwhile appears fully established within the institutional architecture of the French pension system.

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The Culture of Welfare Markets

Elderly Care In accounts of the French care system it is often emphasized that ‘the state has responsibility for providing social care’ while ‘markets play a minor role’ (Fagnani and Letablier 2005, 135–136).98 State-subsidized provision is indeed important in the current care system.99 Like elsewhere, however, the bulk of elderly care still is incumbent on families. Added to which, the elderly care system has been embracing some market elements for quite a long time, although these did not impact on the core of the postwar settlement. Following World War II, France saw various initiatives to build a quasipublic infrastructure of care services. Residential services were by far the prevailing route to formal elderly care in the postwar years, with senior citizens urged to use up their savings when entering a care home. From the 1960s onwards, however, a multifaceted benefit system took shape. Severely disabled citizens became eligible for a general impairment allowance. Moreover, public health care insurance funded nursing care not only in long-term care hospitals, but also in outpatient settings. The départements (major administrative divisions in this country) granted means-tested social assistance to citizens in residential care; these services were predominantly run by nonprofit organizations, but also by public authorities. As to domiciliary care, municipalities and pension funds (of both mandatory pillars) granted a limited number of hours of personal care, provided by municipal and voluntary agencies. From the 1970s onwards, integrated service centres were founded that offered both home nursing and personal care.100 For a long time, however, domiciliary provision proved quite patchy so that many frail elderly were relying on their family or had to move right away into residential care. Up to the present, the bulk of care homes has remained under the control of public authorities or nonprofit organizations contracted by the départements; professional domiciliary services continue to be provided by a mix of independent nurses, integrated care centres, and nonprofit providers of personal care. Concerning nursing, health care insurance funds a certain amount of care hours on a general practitioner’s referral. The majority of nursing is provided by self-employed professionals covered by agreements with the sickness funds, with the latter paying fees per service within capped budgets.101 As to public funding, the introduction of the personal allowance for autonomy in 2002 entailed a more systematic and a more universal approach to elderly care. The budget for the allowances is resourced by a mix of tax revenue and payroll contributions. It is a universal benefit with a claw-back mechanism ensuring that care recipients take a part of the financial burden in line with their income. Administered by a public quango, the National Fund for Solidarity and Autonomy, the allowance covers expenses outlaid for services in residential and home care; a further part of the finance package is taken over by the (public) sickness funds.102 The allowance is rarely used as a cash benefit to employ relatives. Rather, it is funding professional services according to a formal need assessment. This is carried out by the départements on the basis

Welfare Markets in Old-Age Provision 49 of a national scheme embracing six bands of dependence (of which only four involve a right to benefits). As moderate infirmity does not entitle a person to the care allowance, the system leaves substantial needs uncovered.103 Those not eligible for the allowance may, however, receive a (small) personal care package granted by their pension fund or the social assistance office of the département. Notwithstanding the strong involvement of public bodies, the law of the market does matter. Middle- and upper-class senior citizens often recur to what may be termed the French way to direct payments, that is, the publicly subsidized employment of private carers. This is facilitated through a system of third-party human resource management104 and encouraged through generous exemptions from tax and payroll charges. This model, introduced in the 1980s and extended thereafter, has proved a strong vector of home care development in France.105 Furthermore, numerous senior citizens draw on private long-term care insurance, quite widespread in France. More than 2.5 million citizens hold plans entitling them to prefixed annuities in case of evidenced frailty, with about half of these plans being included in corporate social protection schemes (prévoyance, see section above). Sometimes, these schemes pass contracts with care homes to offer plan holders preferential treatment in residential provision. Unlike their counterparts in the United States, private insurance companies do not purchase services. These remain under the control of the state and of nonprofit organizations. In (domiciliary) personal care, France exhibits a long tradition of voluntary sector provision. Some care associations started their activities as early as in the 1950s, using for their services volunteers living in the neighbourhood but also subsidies offered by public bodies or the various pension schemes. These funds enabled them to employ an ever growing number of (female) workers, mostly on a part-time basis. Today, home care agencies need a public licence predicated on a number of quality standards.106 Once a local provider has been licensed, it may receive parts of the personal allowance on behalf of the cared-for. Besides these associations, municipalities provide personal care, especially meals-on-wheels. There is no uniform, nationwide mechanism through which users are referred to services. In many places, assessment teams suggest a local provider or an agency placing home care workers on a fee-per-hour basis in private households.107 Elsewhere, users are left with a list of providers or associations brokering contractual linkages with home helps. Prior to the introduction of the personal allowance, the assessment teams of many départements promoted the quasi-direct payment model and used their funds to finance the employment of mostly low-skilled home helps,which are cheaper when compared to the services offered by agencies. The subsidies granted to the employers of home helps provoked competition between the home helps and professional services.108 A further competitor of the care agencies was publicly subsidized welfare-towork enterprises that, similar to the social enterprises in Québec, are leasing their staff to individual households. With the personal allowance scheme, there

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has been a move towards more professional provision, even though needs not covered by the scheme continue to be largely met by unskilled home helps (and families). In that sense, interagency rivalry persists. Having said this, commercial provision108 and care agencies formally competing among each other on the same territory have (until very recently) remained the exception in France—even though the regulation of the sector provides opportunities for the départements to make tenders and to preselect service providers. With regard to residential care, the nonprofit sector equally proves an important player. Less than one in six homes was run by a commercial provider. As with home care, the general rule has for long been that the départements are planning facilities together with provider organizations (and their networks), with care suppliers being licensed for a given population and a given territory.110 Residential services are funded on a price-per-unit basis, either by the sickness funds or by the National Fund for Solidarity and Autonomy (or a mix of both), depending on the degree of frailty a senior is suffering from; hotel costs are incumbent on users, with social assistance stepping in for those unable to afford them.111 In many cases, relatives of frail elderly pay for their parents, given that the average price of residential care is double the average pension, and because the départements reclaim their financial support from heirs. Nonetheless, at the beginning of the new millennium, approximately one quarter of all residents depended on social assistance. Public bodies and suppliers agree upon funding conditions for nonmedical services for each institution separately and on a rate depending on its equipment. Apart from the private sector, which operates in a niche exposed to some supplier rivalry, care home providers hardly compete among each other as waiting lists are widespread. Thus, true market interaction plays a limited role in the French care system even though the proportion of public resources devoted to long-term care does not (or just slightly) exceed(s) the figure to be found for the other countries under study here.112 However, it is the (subsidized) employment of home helps and private insurance which indicate creeping marketization. Moreover, there is the case of self-employed nurses eager to maximize the number of their patients, often in a competition with nonprofit and municipal care centres. Yet, as the profession is highly regulated, and as undersupply has thus far been the rule rather than the exception, the law(s) of the market barely apply here. Regarding the entire system, market care appears a disguised reality at the margins rather than a major driving force. As will be illustrated below, however, the scope for the market rationale to proliferate has recently been widening.

3.1.5 A Brief Transnational Assessment Against the background pictured thus far, where and how do markets matter in old-age provision? A comparative assessment of the role of the market rationale within the care and pension systems of the four coun-

Welfare Markets in Old-Age Provision 51 tries under study here proves a tricky undertaking. On the one hand, the short sketches provided for each country do not permit an encompassing comparison of the exact relative importance of market-based allocations and transactions in each of the systems. This would require a large set of figures, with the (quite challenging) endeavour being to make them compatible across regime types, statistical systems, and functional equivalents. On the other hand, the most reliable instrument for the evaluation of the actual impact of market forces on care and retirement provision would be an investigation of life courses, household economies, and patterns of coping behaviour, all of which go far beyond what a single study concerned with major evolutions in these systems can provide. Having said this, an analytic (rather than numeric) comparison addressing major traits of the institutional frameworks and regulations does make sense as it gives us rough ideas about similarity of and variety between ‘real’ welfare markets. Moreover, it is possible to provide a tentative insight into gradual differences on the one hand and particular national elements on the other. Such a comparison should focus on a small number of categories emanating from basic theoretical insights into the functioning of welfare markets. As market-based social welfare provision is related to state institutions in one way or another, the relation between basic (public) provision and nonpublic pensions is a first interesting category. Moreover, nonpublic provision adopts various forms so that particular subcategories should be given attention: Within the pension field, the scope and character of corporate schemes is a critical element, whereas in care systems, private long-term insurance deserves particular attention. Furthermore, welfare markets are both embedded in and disconnected from statutory governance, so that market regulation is of utmost importance. Finally, as already noted, the analysis should include national particularities as these are indicative of cultural traits typical of a given jurisdiction. Whether elements inherent to a welfare market qualify for being labelled a national particularity depends on the relative prominence of these elements within the overall system, which this investigation gauges by assessing their relative impact. Table 1 (below) provides a synopsis of the comparative assessment carried out on these grounds. With regard to pensions, it is obvious that we are dealing with subsidized welfare markets in all countries under study.113 Concerning the relation between public and nonpublic schemes, the level of basic public provision has significant bearings. While British citizens with a relatively low income may be urged to purchase private pensions or to seek employers offering decent corporate provision, their Canadian fellows, enjoying more generous basic provision, may be less compelled to do so. Enrolees of (generous) social insurance regimes are facing a still more limited pressure to go market; however, this pressure depends on the corridor opened to (subsidized) nonpublic retirement provision, bigger in Germany than in France.

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Differences also appear with respect to the character of corporate provision. Traditional DB schemes, which make retirement income dependent on the citizen’s position on the labour market, have developed in all places— although their heyday has long gone. However, there is a marked contrast between the Anglo-Saxon and the continental European systems. In the former, the overhaul of DB schemes appears a major trigger of marketization even though there is gradual variety between Britain and Canada, as the latter is less exposed to the DC model. In the two continental European countries, the marketization of occupational provision is much less significant. Following World War II, these countries saw the rise of small-scale company schemes promoted by the state; yet these schemes played a limited or even marginal role within the entire pension system. However, occupational provision was (and is going to remain) stronger in Germany than in France—hence the former is affected by a stronger drive towards (semi-)DC plans than the latter. Regarding regulation, the continental states both recur to comparatively strong market-constraining mechanisms in their nonpublic pension pillar(s). These mechanisms have a stronger material impact in Germany, however, given that personal and occupational pension vehicles are much less widespread in France. Britain knows numerous schemes govered by various rules, albeit within a widely—not to say extremely—deregulated pension system. It appears that Canada exhibits a more limited protective regulation of nonpublic pensions, presumably in consonance with less turbulent market dynamics (see 3.2.). Beyond these differences, market-based pension provision nowadays is relevant to all countries under study. While public provision remained capped or was being curtailed, DC plans and personal retirement plans become an option whatever the character of the entire pension system. Having said this, some particular issues are striking for each of the countries under investigation. Britain has seen the creation of a strongly regulated personal pension plan within a very turbulent nonpublic-pension sector; such regulation, resembling, to some extent, the German Riester pension, is unknown in Canada. The latter, however, presents the particularity of running a widely funded public pension scheme. The case of Germany is outstanding in that this country relies on a postcorporatist model of occupational provision, with the highest public subsidies granted to collective plans based on a (semi-)DC rationale on the one hand and social partner governance on the other hand. True, similar tendencies surface in the other countries, yet the social-partner model appears dominant only in Germany. Finally, the French case is outstanding in two respects: a mandatory second pillar, emanating from occupational provision schemes and still under social partner governance; and the existence of personal pension plans de facto confined to the upper (middle) classes. Overall, then, one can see both functional equivalent patterns of market-based pension provision and nationally coloured particularities of each system.

Welfare Markets in Old-Age Provision 53 The same appears when comparing care systems. Thus, market care plays a role in all of the countries under review here, yet national systems differ considerably concerning the nature of the relation between public and private involvement in care provision. First of all, the German and (to a lesser extent) the French care system operate in line with the model of subsidized welfare markets, whereas the Anglo-Saxon countries basically resort to managed welfare markets, with direct payment schemes at the margins. However, while the British system is shaped by both a ‘poor-citizens’-approach of public provision and very strong for-profit sector delivery, Canada shows a more mixed picture, with public(ly managed) provision being less targeted and for-profit delivery prominent in residential care as well as some sections of the domiciliary sector. Concerning the latter, the role of for-profit delivery in Germany roughly resembles the one in Ontario, whereas statutory and nonprofit providers are dominant in the French system and in Québec. In the continental European countries, publicly regulated provision is more universal than in Britain (but not necessarily higher than in Canada) although budgets for elderly care are capped in the former (explicitly in Germany, more informally in France). The whole picture, then, does not present clear-cut intersystemic differentiation. The same holds with regard to the role of private insurance. While the latter is poorly developed in those countries with strong for-profit delivery, it is much more prominent in France, where the private sector is marginal (Germany presents an intermediate case). Concerning the regulation of independent care provision (broadly speaking), there are notable, albeit more subtle, differences between the systems under consideration. Britain knows a fairly strong national supervision as well as tough local management of care provision, at least when considering the legal framework. The inspection regime appears less developed in Canada; although the Ontarian system resembles the British (more precisely, the English) one, the relation between regulators and providers is more loosely organized in Québec (knowing that market care as such only occurs at the margins in this province). In Germany, both regulation and public management are moderate, with comparatively high levels of discretion left to care recipients and service providers in their day-to-day arrangements. In France, independent care appears subject to rather weak regulation; even as the national regulation has become crucial, the country’s care system is widely lacking formalized quality inspection and standardized management rules. One can infer from this picture that more market care implies stronger formal public inspection, although the latter is unequally developed (regarding Britain and Canada). The two systems more largely based on nonprofit provision and institutionalized partnerships appear less affected by formal inspection, although the latter is not absent from the institutional landscape (regarding Germany and France). Again, one can find a number of particular traits inherent to the different national (or even provincial) systems. As already noted, Britain is outstanding in its encompassing inspection regime, including supervision and star-ranking procedures. In Canada, commonly referred to as a liberal welfare regime,

54 The Culture of Welfare Markets quasi-market management is controversial in Ontario and even absent in Québec. Tender-based public purchasing of care packages is rare in Germany too; as provider competition is institutionalized there, the care system is nonetheless highly marketized. An outstanding characteristic of the German system however is collective agreements about the terms of market care. Finally, the French system exhibits two notable particularities: the relative importance of self-employed nurses and a policy focus set on privately employed home helps. While care businesses have remained marginal in this country and do not fit into its welfare doctrine, there is some room left for independent formal care arrangements. Complex as it may appear, the picture drawn up to this point presents nothing more than a snapshot of institutional designs. It does not reveal the very dynamics welfare markets unfold once they have come into existence. Glancing at the recent past, the next section will shed light on these dynamics, especially with regard to the respective roles of public and private involvement as well as to the development of market regulations.

3.2 HOW WELFARE MARKETS DEVELOP: THE DYNAMICS OF CHANGE The marketization of elderly care and pensions has gained momentum from the 1990s onwards. As depicted in the previous section, market-based elderly care or retirement provision was a quite new phenomenon in some countries; elsewhere, already existing forms of private sector or competitive governance were extended or became more deeply entrenched. The following section explores the evolution of welfare markets with respect to their internal development, to statutory regulation, and to the related public debate. The aim of the analysis is less to provide a detailed account of to what extent things were evolving. Rather, the analysis provides a country-sensitive picture of major dynamics concerning the role the market rationale was playing in retirement provision and elderly care as of the mid-2000s. Again, all countries and both sectors are considered separately.

3.2.1 Britain: Radicalization With Nuance Pensions In Britain, pension (welfare) markets have been very dynamic over recent years.114 Following the creation of new contracting-out options at the end of the 1980s, ‘insurance companies promoted personal pensions aggressively, as did the government through its own advertising campaign’ (Daykin 2002, 33). Financial retail agencies made it their priority to sign up as many new clients as possible, irrespective of the actual utility a private plan presented

Welfare Markets in Old-Age Provision 55 Table 1. Old-age provision and the role of the market Britain

CAN

G

F

Low basic provision & market pressure on low-income employees

Moderate basic provision & market pressure for higher income employees

High public provision & small-scale market pensions for average employees

Very high mandatory provision & marginal market pensions for average employees Marginal DB tradition & marginal DC sector Strong protective regulation (for smallscale vehicles)

Pensions Relation between public and non-public provision

Corporate pensions

Regulation of market-based pensions

Particularities related to market-based pensions

Care Relation between public and private involvement

Role of private insurance

Regulation of independent care

Particularities related to market-based provision

Strong DB Strong DB Limited DB tratradition & tradition & dition & small fairly strong notable DC DC sector DC sector sector Strong protecLimited More encomtive regulation protective passing (for larger regulation in protective scale vehicles) a less widely regulation deregulated in an widely landscape deregulated landscape Funded public Focus on colMandatory Existence pension lective semisecond tier of closely regulated (perscheme DC corporate & focus on plans upper- middlesonal) pension scheme class personal pensions Poor-citizen- More universal More universal Universal public provision oriented pubbasic provi(capped) pub(informally lic provision sion & moder- lic provision capped) & & strong forate for-profit & moderate marginal forprofit delivery delivery for-profit profit delivery delivery Marginal Marginal Limited (apart Strong from mandatory private enrolment) Fairly strong Moderate Moderate regu- Fairly weak regulation & regulation & lation & mod- regulation & strong public strong public erate public moderate pubmanagement management management lic management Far-reaching Sub-contractCollective Importance of quality inspecing without bargaining independent tion competition in over market nurses & Québec conditions policy focus on home helps

56 The Culture of Welfare Markets to them—a practice known under the label of mis-selling. In addition, the 1990s and early 2000s saw a number of management scandals in the pension industry, with far more than three million Britons losing (part of) their pension entitlements. Against this background, the pace of change in regulation was remarkable, with ‘new primary legislation every year’ (Ring 2002, 551) and an ambitious pension reform launched in 2006. Overall, the pension industry was blossoming. The proportion of personal savings income in the overall revenue of British pensioners has doubled since the mid-1980s, achieving more than 10 percent in the new millennium. Over the same period, the pension funds’ share in all Britain equities grew dramatically, up to half the quoted equity market as of the mid-2000s. Moreover, the industry further invested in marketing tools and refined its technology. While some financial advisers enticed policyholders to unlock their plan to pay debts or to spend for other purposes, many insurance companies took steps to make transfer values better reflect the worth of benefits accrued, thus facilitating mobility between schemes. Moreover, drawing on new calculation methodology, enhanced pensions were on offer for those with ‘impaired lives.’ Apparently, the influence of the market rationale within the entire pension system was gaining further momentum. This statement has nevertheless to be nuanced. To begin with, the proliferation of private saving plans remained confined to the better-off. In the entire private sector, hidden administrative costs added to the official maximum charge rate and especially deterred (potential) low-budget investors. There were also high rates of contribution holidays or scheme abandonment among former plan holders. Regarding the Stakeholder Pension, take-up developed much less than expected; many of the new contractors were not the previously uncovered.115 Overall, given the threat of sanctions by the regulatory watchdog, financial advisers were concerned over advising customers that it was in their interest to buy a Stakeholder Pension. Furthermore, scepticism about personal saving plans was felt to be widespread. One reason was the collapse of a huge insurance company (Equitable Life), assumed to have shattered the confidence in this industry. Changes in pension policy had a similar effect. In 1986, for instance, the state decided, for periods of employment after 1997, that the secondary tier would no longer pay a supplement on nonpublic pensions to those of which the private or occupational benefits eventually proved lower than a second-tier pension would have been if they had stayed with public insurance; this had been a guarantee of safety offered to those contracting out of the secondary tier. Moreover, the pension industry had to recalculate the return on investment promised to individual plan holders; guarantees of minimum sums or annuity rates, paramount in the past, were withdrawn. Estimations said that, over the last 15 years, real costs for funded pensions increased between 50 and 80 percent, materializing, amongst other things, in a spectacular decline in annuity rates.

Welfare Markets in Old-Age Provision 57 This ‘personal plan cost disease’ (Blackburn 2004, 562) was deemed to originate in rising longevity and a poor performance of the pension industry on the stock market. After the end of the share bubble, the industry had to cope with a tremendous fall in the value of their assets. Many insurance companies were looking fragile; having heavily relied on the stock market until the end of the 1990s, they were dumping equities and buying bonds, with their equity holdings being almost halved subsequently. The bond market, however, began to plummet, too. Consequently, as of the mid-2000s, there was a wave of policyholders rejoining the state secondary tier. Following recommendations by their insurance company, they revised their former decision to contract out of the second public tier.116 Furthermore, a large majority of corporate plans turned out to be underfunded.117 Due to the maturing of the companies’ schemes, the practice of taking contribution holiday (widespread in the 1990s), and the aforementioned stock market crisis, stock market crises, plan costs (as a percentage of employer’s gross payroll) were shooting up. Moreover, the government was blamed for having removed in 1997 the formerly existing right of pension funds to reclaim tax on dividends achieved by their investments. Trustees became more risk-averse, but some funds continued to sink money in high-risk investments, for example, hedge funds (held by one in five pension funds in 2005). As the capital market barely satisfied the quest for higher returns on investment after 2000, many employers came to see final salary schemes as too costly. There was a net tendency towards scheme closure prone to entail the end of broad occupational pension coverage. As of the mid-2000s, almost two-thirds of DB schemes in Britain were closed to new entrants. Others were downgraded from final salary plans to average career arrangements. Four in five employers were now no longer offering DB schemes to their employees. At the same time, defined contribution (DC) plans were suggested to both previous DB plan holders and new entrants, alongside a reduction of employer contributions.118 Many of those whose final salary scheme was abandoned did not join a DC-based occupational or personal saving scheme.119 In addition, there was trouble with plan portability; the revaluation of accounts prior to their shift to other saving vehicles often led to disputes between fund managers and plan holders. This and further arguments on the terms of business led the pension industry to denounce an overall proliferation of a ‘culture of complaint’ (see Mann 2006, 90). Finally, some corporate schemes ran into serious trouble following their sponsors’ insolvency.120 Government had to live with the financial exposure to failures of private providers and was requested to provide a lifeboat to schemes affected by deficits. A Financial Assistance Scheme was set up to offer assistance to citizens with losses in their pension account. By 2004, the industry was compelled to insure itself through a Pension Protection Fund. However, there were doubts cast on the solvency of the fund, given the increasing demand of compensation.

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Overall, given the ups and downs of the pension industry and a growing discrepancy in plan coverage121, private pensions remained a key point of reference for public policies and the public debate. The New Labour government coming into office in 1997 was committed to further strengthen the role of private retirement provision.122 It sought to regulate the sector more effectively in order to secure the individuals’ enrolment into funded pension schemes. Concerning occupational retirement provision, the decided measures improved the portability of entitlements for early job leavers and the standards applying to changes in saving plans. In addition, the government enacted deregulation concerning minimum funding standards and certification requirements, advice duties of providers, and the obligation to include survivor’s pension rights in a saving scheme. Moreover, the state took initiatives to foster consumer education. After having created the Pension Ombudsman and the FSA, it launched an integrated retirement planning service which was meant to provide generic advice independent of commercial interest, through tools offered by the FSA (e.g., a telephone hotline or a sophisticated website).123 Furthermore, all pension providers and employers were compelled to deliver combined forecasts of state and private pension savings. The government also reacted to the limited success of the Stakeholder Pension scheme. The latter had entailed a break of the historic link between taxable earnings and pension contributions, as savers were entitled to subsidies irrespective of their tax status. However, it proved attractive neither to retailers nor to savers. This led the government to raise the cap on administration charges and to introduce compulsory life-styling into the management of this saving vehicle.124 As of the mid-2000s, there was a more important change in pension policy. The government now intended to strengthen mandatory provision. Wage indexation of second state pensions was to be reintroduced for benefits paid out from 2012 onwards. This was meant to be a remedy against the growing number of retirees claiming means-tested supplements, due to the relative decline in S2P benefits. In addition, the government launched a plan for setting up a new semimandatory National Pensions Saving Scheme, to be in operation by 2012. Resourced with state subsidies and mandatory employer contributions, this scheme was meant to enrol workers automatically unless they opted out deliberately.125 All these policies were likely to constrain the market rationale in pension provision. The public debate remained vigorous. It reached its peak as the government asked the so-called Turner Commission to devise a new pension policy by 2004. Major concerns were the increasing number of retirees depending on means-tested minimum benefits but also the ‘vulnerability even among the better off’ (Ward 2004, 52), given the crisis of private pension schemes. There was also an intensive debate over insufficient consumer education, triggered, amongst other things, by reports from the FSA. In the public administration sector, employees went on strike to defend their final salary schemes, under attack from the government, especially with regard to

Welfare Markets in Old-Age Provision 59 the existing retirement age, which will rise for private sector workers in the future (up to 67 years). Industrial action also occurred within a number of private sector companies aiming at winding up or curtailing occupational pensions.126 Doubt was cast on the viability of the pension system as a whole, with ‘trust in all institutional and official provision (being) relatively low’ (Taylor-Gooby 2005, 223, emphasis added). Altogether, while one can say that the market rationale within the pension system was radicalized up to the mid-2000s—with personal saving plans and DC company schemes becoming standard vehicles—the wider public and the political elites were permanently busy discussing regulations to constrain these dynamics. The pension reform decided in 2006 is a clear expression of this. Seen from this perspective, the assertion that there is nothing to the British pension system but marketization has to be nuanced. Elderly Care From the 1990s to the mid-2000s, elderly care too was further exposed to market forces.127 First of all, ‘growth in provision has been left to the private market’ (Baldock 2003b, 120). Whereas, on the whole, elderly care remained a domain of family support, professional provision was expanding in both residential and domiciliary care, with the balance drifting towards commercial services. The New Labour government taking office in 1997 ‘did not reverse the trend of market development’ (Knapp et al. 2001, 285) so that the market share of the independent sector—mostly private business, as voluntary agencies became increasingly marginalized—continued to rise.128 Regarding domiciliary provision, there was an overall revival of user fees going alongside a ‘wide discretion over . . . home help charging strategies’ at the local authority level (Means et al. 2002, 30).129 Central government’s funding did not keep pace with the rapid growth in claimants so that subsidies were decreasing per capita. Spending was ever more concentrated on serious cases. Between the early 1990s and the beginning of the 2000s, the hours of services funded by local authorities had tripled, but the number of home care-receiving households diminished. The growing tendency towards rationing services tended to shift the care burden onto private individuals. Also, there was evidence of an expanding grey market for housekeeping services and intensive supervision of citizens affected by dementia. However, further attempts to market private long-term care insurance were not successful. Equity-release schemes ‘gained a bad reputation’ (Laing 1993, 74), and prefunded long-term care schemes saw a plunge in take-up and fast rising premiums. This was due, amongst other things, to the slackening stock market. Some operators withdrew their product from the market. There was debate about planholders being badly advised on their risks, and the FSA (see above) became mandated to regulate equity-release schemes.

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Altogether, public funding remained by far the dominant pattern of collectively financed care provision—while delivery was largely incumbent on the private sector. Regarding the latter, the state’s pledge of more (out-contracted) domiciliary provision stimulated a mushrooming of small agencies; thereafter, the sector saw a growing number of mergers and acquisitions.130 With regard to residential provision, the boom of the 1980s and early 1990s came to an end in the 2000s. This was due, amongst other things, to the public policies’ swing towards community care. The market had attracted many large-scale providers, with approximately four in five facilities in the residential sector being run by independent businesses at the time. Yet during the first years of the new millennium, small care home owners were reportedly fighting for survival. A number of homes were closing, with regional strains of the supply of residential services as a consequence. Although public expenses were rising, many homes were augmenting their fees; others operated a cross-subsidization between private clients (charged ever more) and residents paid for by the local authority.131 Moreover, the purchasers’ price policies tended to trim down the care homes’ profitability while engendering an increasing rivalry among suppliers, including nonprofit homes. New regulations (pertaining to skills and equipment) added to this. While the quasi-market approach as such was never called into question, the management of the care market proved multifaceted. For instance, purchasing strategies varied considerably. NHS agencies emphasized volume contracting, whereas social service departments frequently embarked on a user-focused spot purchasing process. Block contracts remained widespread in daycare, spot and call-off contracts, based on a predetermined price band set prior to purchase, became the preferred mode of commissioning in residential and domiciliary care. Governments were keen to streamline the administration of the care system.132 Financial penalties were imposed on social services departments unable to arrange care packages for patients medically fit for hospital discharge. Departments unable to stick to the predefined benchmarks were punished by fines.133 Importantly, the care system saw an overall ‘growth of inspection and regulation’ (Means et al. 2002, 73) from the end of the 1990s onwards. This concerned professional standards and the terms of quality control, becoming ever more substantial. A national quango, the Commission for Social Care Inspection, was entrusted with enforcing care home standards, including by mystery shopping and a publicly accessible star-rating system. Through a socalled National Service Framework for the Care of Older People, national standards covering the availability of services, service models and innovation tools were rolled out across the whole system.134 In addition, options for integrated care provision were created, for example, through the pooling of health and social care budgets. Moreover, single assessment involving social services and health professionals became mandatory. There was also an experimentation with so-called Care Trusts (different from PCTs) as agencies responsible for joined-up service provision. The residential sector

Welfare Markets in Old-Age Provision 61 was led to more diversification, notwithstanding that many independent providers refrained from running, for instance, intermediate care services. The tendency towards stronger public oversight echoed concerns over poor quality in service provision, widely expressed in the public sphere. Advocacy organizations, operating ever more as professionalized pressure groups, were campaigning for better regulations. Critics addressed a notorious lack, or excessive turnover, of skilled personnel. New domiciliary providers were blamed for employing low-skilled care workers. Equally, the issue of ‘market transparency’ was high on the campaigners’ (and government’s) agenda. Health authorities became obliged to run telephone hotlines providing advice on service supply. Although there was an ever greater commitment to user choice, critics argued that the respective options remained largely constrained, especially concerning nonresidential services. Also, there was evidence that frail senior citizens discharged from hospitals continued to be transferred to facilities regardless of their own preferences. To counteract these limits on choice, the Government envisaged a further extension of direct-payment schemes. Altogether, then, two tendencies concurred. The shift towards market care was radicalized in a number of ways, especially when regarding the consolidation of competitive bidding and private sector provision. At the same time, however, public regulations, responding to concerns over inadequate market mechanisms, set limits to a purely commercial approach to care provision. As with pensions, there was further marketization, albeit with nuance.

3.2.2 Canada: The Creeping End of Defined Utility Pensions Considering the recent evolution of the market rationale in the pension system, there are many similarities between Canada and Britain. Canada too saw an intensification of market-based retirement provision at both the individual and the corporate level.135 As to personal plans, Registered Retirement Saving Plans (RRSP)—held by 60 percent of all Canadian households as of the mid-2000s—proved quite dynamic. The total of tax-advantages ceded to private households in order to encourage these plans exceeded the total expenditure of the first tier of the public pension system (OAS). The financial services industry continued to remain an active market player, with numerous retail agencies offering free-of-charge seminars on RRSP investment and groupings of financial institutions advertising in the media. Statutory bodies produced orientation tools for individuals shopping around in the pension market.136 Some citizens were led to buy tax-advantaged pension plans by contracting debts, a propensity driven by legislation enabling plan holders to liquidate assets prior to the maturity of their contract.137

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Like in Britain, however, there were limits to market growth. While the interest rates promised to (insurance) plan holders had to be recalculated, the stock market crisis surfacing after the turn of the millennium entailed a drop in the demand for RRSPs. The occupational pension sector witnessed a trend towards DC plans even though DB schemes remained more robust in Canada than in Britain. As of the mid-2000s, roughly a quarter of all corporate pension plan members were covered by a DC scheme. Moreover, survey data showed that about 30 percent of all private companies with a DB scheme were about to shift their plan to the other formula. Like in Britain, sponsors carrying the responsibility for an investment shortfall were eager to disengage from their former pension policies and related market risks. An increasingly popular option was company-based group retirement saving plans on a DC basis. This development went alongside a growing quantity of lawsuits concerning claims of plan members who had left their enterprise and engaged in deferred graduated vesting. Equally, plan members took legal proceedings because they felt that lump sums paid by the employer had been undervalued related to the plan’s overall profitability or achieved surpluses.138 Similar to what was noted earlier for the case of Britain, an increasing number of retirement plans were heavily underfunded and came under the observation of the statutory watchdog. As of the mid-2000s, approximately half of DB (occupational) pension plans were assumed to carry deficits; also, the prevailing accounting techniques were reported to distort the true picture of a pension fund’s performance. Given the acceleration of welfare benefit plan costs as a percentage of employer’s gross payroll, many companies saw themselves obliged to top up their sponsoring, after having reduced their contributions during the stock market hype over the late 1990s. Some were also looking at reducing pension benefits and limiting early retirement options. Moreover, a range of severe ‘emergency situations’ occurred, with companies and their pension funds (in danger of) going bust. This was sometimes linked to harsh industrial action as unions felt a threat to their members’ pensions;139 during such conflicts, the government was requested to provide a lifeboat to underfunded schemes. Specialists attributed this crisis to poor investment performance and to failed strategies of portfolio diversification. Like elsewhere in the Western world, pension funds, having strongly invested in stocks, took a sharp hit from weak markets between 2000 and 2003. Yet the overall profitability of the funds had been dropping since the 1980s. Concerns over a fragile financial market also extended to public sector plans. Government borrowing from this treasure had for long been in good currency (for the purpose of financing public infrastructure), but the plans’ managers shifted investments to more speculative assets, namely stocks and short-term money funds.140 Following the decline of global stock prices, they had to partially revise this strategy. A further policy was investments in public–private partnerships which, materializing as a new pattern of financ-

Welfare Markets in Old-Age Provision 63 ing public infrastructure, promised high profitability at the expense of government budgets. This was however opposed by trade unions afraid of jobs being cut or of lower pay for public-sector workers as an outcome of such partnerships. In the same vein, the management of the (now) semifunded public pension pillar (CPP/RRQ) became a political issue. With booming stock markets, its portfolio was meant to include higher shares of riskier, and assumedly more lucrative assets, with the aim of having more than half of the capital invested in equities (against 5 percent by 2000). This ‘investment ideology’ (Cooke 2003, 129) produced mixed results, with losses and gains at short intervals. On the occasion of the CPP’s yearly public consultations, critics took issue with the scheme’s share holding in ugly industries; for instance, a conflict highly covered by the media arose from the CPP’s shareholding in the tobacco industry, a strategy contested by the Canadian Medical Association and other campaigners. The Quebec branch of the public pillar was equally blamed for unsound investment decisions. A further stumbling block was the role the nonstatutory pension funds in the governance of corporations of which they held shares. Like their counterparts in other Western countries, Canadian private pension funds had become key actors within the institutional sector of corporate finance and were assumed to own nearly half of Canadian publicly traded companies. The big pension funds were making demands on corporate governance or filing lawsuits against companies of which they were shareholders and which they blamed for mismanagement. Apparently, preserving retirement funds in harder times implied increasing pressure on corporations and their employees. The decreasing payoff of existing funded pension plans across the various pillars was subject to public debate. In addition, concerns were raised about the stagnation in the proliferation of nonpublic pension plans and the growing discrepancy in coverage.141 There were also preoccupations concerning the growing number of flexible workers and early job leavers facing the risk of a retirement without (private) pension. Moreover, since individuals were increasingly encouraged to self-manage their pension plan, observers bemoaned a flagrant lack of consumer education. Against this background, it is perhaps surprising that, concerning public policies on pensions until the mid-2000s, ‘(almost) nothing happened’ (Myles 2006, 66). The political elites appeared to hesitate to place a stronger emphasis on individual retirement saving. The dollar ceilings up to which investment in private pension plans are tax-exempted were not raised with inflation between 1990 and 2003; thereafter, it was increased only stepwise. At the same time, there was debate on how to secure corporate pensions in more insecure times. By 2005, the Government of Québec proposed a number of restrictions on the liberty of fund managers while the province of Ontario created an expert commission with a mandate to study problems related to underfunded occupational pension plans. On the other hand,

64 The Culture of Welfare Markets Ontario abolished existing provincial rules of mandatory retirement as fixed in many occupational pension plans and in some provincial jurisdictions.142 Proponents argued that workers with a low pension account might wish to continue to work to age 65 (thus far, the trend rather had been towards early retirement). Indirectly, this extended the scope for the individual management of retirement provision. Yet altogether, the public pillar remained strong, following a deliberate strategy of the political establishment and major stakeholders of the pension system. Having said this, it was obvious that—with the success story of personal pension plans and the (moderate) proliferation of DC plans at company level—the market rationale became more influential within the entire retirement system, even without notable institutional change. The tendency was towards a creeping reduction of predefined utility of private and corporate pension plans, with future cohorts of retirees being ‘much more exposed to adverse shocks to their lifetime saving plans’ (Osberg 2005, 418) than previous generations. Elderly Care Over the period under review, the Canadian elderly care system was subject to further marketization as well, albeit unequally so when regarding the different provinces.143 Although the bulk of services still was provided by family members, there was an overall increase in professional services including personal care. Nonetheless, the expenses incurred by private households were constantly rising, even as public subsidies per frail elderly person were cut back. Across Canada, moreover, nonprofit and charitable organizations, while continuing to fill the gaps left in public (or family-based) provision by organizing lay help, saw their scope of action restricted by governments curtailing their core funding. Overall, the care system remained heavily regulated by public bodies, yet the scope for market governance was widening. Regarding residential care, public funding and for-profit delivery continued to be the dominant pattern. As of the mid-2000s, the majority of those living in nursing homes were unable to afford the required fees and therefore relied on subsidies paid out of the provincial welfare budgets. In many parts of the country, waiting lists urged users to stay in hospitals or to recur to (inadequate) care by relatives. One reason given for this was a lack of (skilled) personnel. In some places, families privately engaged care workers looking after old people living in nursing homes. Yet provincial governments took decisions to boost the domiciliary care sector. In 2003, there was an explicit interfederal agreement in that sense. With soaring demand however, individuals were increasingly relying on private solutions including the employment of unskilled home helps. This made the market rationale gain momentum throughout the overall care system.

Welfare Markets in Old-Age Provision 65 Glancing at the evolution in Ontario and Québec, different dynamics can be singled out, though. Ontario saw an increase in care home places purchased from the private sector; at the same time, the caseload of home care agencies went up through pressures on hospitals to discharge their frail patients earlier than in the past.144 In the for-profit residential sector, the influence of large company chains was increasing. Concerning domiciliary care, the market share of the private sector was rising especially for personal care services. The case management agencies (CCAC) were led to modify their ‘provider portfolio,’ with a range of smaller (especially) nonprofit providers losing their contracts following the bidding process and the respective case load being transferred to larger-scale for-profit companies. In general, the sector exhibited a remarkable instability of contracts and high fluctuation of care workers.145 Moreover, many CCAC ceased to commission personal care. As supplementary community services such as housekeeping, meals on wheels, transport services, and social counselling were unequally available throughout the province, service supply became patchier. A range of social support services continued to be provided by local nonprofit organizations but were increasingly streamlined according to tough accountability norms. In both residential and domiciliary care, these organizations and their networks were eager to defend their cause, referring to possible shortcomings of ‘competitive contracting in a high-risk environment’ (Abelson et al. 2004, 369).146 The provincial government injected more money into the system and promised a review of the procurement scheme, with a report being commissioned in 2006. While new regulation of the scheme was envisaged, the quasi-market approach was not called into question. Concerning Québec, the focal agencies created in 2004 (the Health and Social Services Centres, CSSS) were mandated to develop integrated networks with other community and private-sector providers and to formalize their links with the latter by means of distinctive agreements and service protocols. They were meant to coexist with independent providers of nursing and personal care. As regards residential provision, the predominantly private care home sector was increasingly accommodating senior citizens with physical disabilities and paid for by the province. Concerning domiciliary services, tendencies towards the implicit marketization of the sector persisted. As the service package provided by the CSSS themselves was ever less able to cover the whole variety of care needs, the caseload of nonprofit organizations and social enterprises grew markedly. By 2004, a new home care policy stipulated that, with the exception of complex cases requiring resource-intensive care and short-term users, personal care had to be outsourced to independent providers. While some of these providers were ever more inclined to offer their clientele additional services on a private basis, others were facing difficulties sticking to their budget line, with a rising pressure to economize on time schedules and staff hours as a result. Private supply was also expanding in the field of domiciliary nursing. Moreover, the

66 The Culture of Welfare Markets grey sector, composed of mostly unskilled domestic workers, continued to flourish.147 In both provinces, then, there was some additional room left to the market rationale. This also pertains to the creeping blossoming of the private care insurance market. As of the mid-2000s, coverage was still low, yet it was large enough to rouse the attention of the public media, reporting on subscribers not receiving from their insurer what they thought they were entitled to. On the whole, however, governments and major stakeholders of the care system were not keen to deliberately privatize the care system by reducing public funding. Rather, marketization occurred implicitly, through the increase of unmet needs, the quasi-market regime in Ontario, and tendencies towards further rationing and contracting out (in Québec). Importantly, both provinces witnessed a debate over insufficient public funding and poor quality performance of the care system. This was most salient for residential provision, with experts blaming government(s) for insufficient quality inspection. In Ontario, this affected the (by far prevailing) private sector, which was accused of disregarding staffing norms set up by the provincial government. By 2004, the latter decided to increase the number of control visits and to fix new minimum care standards.148 In Québec, similar initiatives were taken after public nursing homes had come under scrutiny. Due to legislation enacted by 2003, each local centre had to apply for provincial accreditation. By 2006, a stronger regulation of quality standards was on the way. In addition, the instigation of public long-term care insurance was tentatively evoked at the provincial level. Against this background, the tendency towards marketization appeared to be entrenched in particular avenues. The overall system remained under statutory control—and on the whole more so than in Britain when considering publicly managed elderly care. Those in need of formal support not only continue to be channelled through public agencies that give advice and refer clients to services but also appear less affected by targeting policies. At the same time, however, marketization has gained momentum as public authorities have (slowly) been moving away from direct control of the infrastructure of elderly care, towards a more dispersed management of care provision. In this respect, Canada’s care system is affected by a tendency singled out above for the pension system as well: the creeping end of ‘defined utility.’

3.2.3 Germany: Slow But Thorough Pensions In Germany, the first years of the new pension landscape as sketched in the previous section saw a progressive settling of the modified welfare mix.149As of the mid-2000s, public provision still amounted to four-fifths of total pen-

Welfare Markets in Old-Age Provision 67 sion benefits; around one-third of the working population held (small) private pension entitlements. Nevertheless, the market rationale was effectively penetrating the German pension system. As opinion polls were illustrating, retirement provision came to be understood by major collective actors and by the population in a new way, with private saving viewed as a ‘must’ by many. Advertisement campaigns of the pension industry spread around, salespeople approached an increasing number of citizens, and trade unions sought to become a key broker of out-contracted corporate pension plans. The new agenda also materialized in product rankings conducted by consumer groups and popular magazines.150 The public subsidies for personal pension plans initially were less requested than expected by the government and by financial experts.150 Many of those embarking on new plans already had privately saved for old age long before. Also, relatively few women felt attracted by the new plans even though this began to change after a while.152 Sales went up in 2005, in part at the expense of traditional life insurance policies which, due to new legislation, had lost part of their tax advantages. At the time, only a minority (around 20 percent) of those entitled to the Riester pension had contracted saving products as offered by banks or insurance companies. Most contributions were small-scale; lower-wage workers often refrained from enrolling with private schemes. The bulk of savers preferred a rather safe vehicle (regulated life insurance; bond investment).153 Concomitantly, new competitors entered the life insurance market, which had been subject to strong deregulation throughout the 1990s. Foreign products with a higher share of equities in their portfolio promised a profitability outperforming products under the national regulation for Riester pension and protected life insurance—with a higher risk of asset devaluation as the downside.154 Following the recovery of the stock markets, retailers marketing these investment funds run public campaigns to entice citizens to rely on riskier saving plans. Overall, private saving based on equities grew more important; this was a speciality of banks and other retailers outside the traditional life insurance sector, with which they had arguments on who should run personal pension plans in the first instance. Having said this, it was the (adjusted) occupational pension plans, especially those providing low-risk plans on the basis of a salary sacrifice, that proved a popular alternative to personal pensions. Under the new regulation, numerous employers went for semi-DC schemes embracing different investment options. Where a collective agreement was found, they often, but not always, cosponsored salary sacrifice plans, as these were exempted from tax and social security contributions and involved comparatively low management costs. Especially, employees of bigger firms found an easy gateway to them. Schemes brokered by agencies under the control of social partners had a more limited success.155 A collective agreement in the metal industry, passed in 2002, stipulated that firms (if members of the employer association) had to suggest a variety of funded

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pension plans to their workers, including an investment fund overseen by a steering group run by the social partners.156 This group embarked on partnerships with life insurance companies which were entrusted with the marketing of the saving vehicle, beside their own financial products. This proved a tricky arrangement prone to hamper the market success of the steering group’s investment fund. The new welfare mix also extended to the pension scheme for civil servants, as it was decided to create a funded tier for a limited proportion (one fifth) of the scheme’s liabilities. At the same time, old-style occupational final-salary pensions (sponsored by employers) had completely ceased to be on offer for newly employed staff. Altogether, the private-pension sector saw a decline in DB arrangements and the rise of more market-dependent plans, even though pure DC schemes remained an exception. Some of the old DB plans ran into trouble since the financial reserves put aside by the companies for meeting their obligations proved too scarce. Several companies had moved their plans into schemes briefed to invest funds in stock markets and were hit by the poor performance of the latter especially between 2000 and 2003.157 Others had preferred to invest in the real estate market, which equally came under pressure after 2004. Estimations said that more than one-third of DB schemes were unable to meet liabilities for the time being. Problems were also reported from the occupational scheme in the public (service) sector, where the budget used for covering the scheme’s liabilities did not increase as expected.158 Regarding personal plans, the life insurance sector—the traditional core of private long-term saving in Germany—was affected by turbulences. Promises about return-on-investments, extending beyond the legal guarantees, were not supported by facts. As in other countries, major reasons for this were poor forecasts of demographic developments (which required a recalculation of the insurances’ asset value) and mistaken bets on a profityielding stock market. Reserves went astray throughout the entire sector;159 one huge supplier (Mannheimer Leben) even went bust. As a result, the sector voluntarily established a protection fund; moreover, it was granted an extraordinary tax relief by the then government. Thus, the settlement of this new pension mix was fraught with problems, which were widely referred to in the public sphere. Regarding occupational provision, concerns were raised over the portability of accrued benefits and enforced compensation payments charged in cases where employees had left, or intended to leave, a company ahead of the end of the guarantee period (five years). A further preoccupation was the opaque nature of the new pension market.160 Providers of personal plans were blamed for hiding key elements of the terms of business, especially those relating to their net profitability. At the same time, there were concerns over low-income earners foregoing the opportunity of the Riester subsidy.161 A further issue was that workers presenting ‘bad risks’ to private pension suppliers had few chances to have work incapacity benefits included in their plan package.

Welfare Markets in Old-Age Provision 69 Public policies continued to interfere. Measures enacted by 2004 brought a further shake-up of the regulatory framework. To begin with, the level of future pensions was cut back once again: A new calculation formula was introduced through which this level will automatically be reduced in line with the (growing) dependency ratio in the demographic structure inherent to the German population. Concomitantly, the state made all corporate pension benefits liable to health and long-term care insurance contributions. Moreover, the grand coalition government coming into office in 2005 decided to raise retirement age (sequentially, to 67 years from 2012 onwards). This revived a debate on old age poverty due to enforced job leaves of elderly workers—very common at the time; declining public pensions; and a poor take-up rate of the new retirement plans among lower social strata. Concerning private saving, the minimum interest rate guaranteed to holders of life insurance was reduced as well.162 This entailed a shift in the long-term savings market, in favour of the Riester pension. The government also introduced an additional monetary incentive for younger workers embarking on private retirement saving from 2007 onwards. Thus, the market rationale turned out to be further bolstered by both public policies and developments in the pension market; and notwithstanding the aforementioned difficulties, the new pension mix as such was barely called into question. In other words: The move towards more market governance in retirement provision proved slow but thorough. Elderly Care In the German care system, too, the influence of the market rationale was amplified slowly but noticeably after the turn of the millennium.163 True, more than two-thirds of those receiving benefits from long-term care insurance had chosen the cash option of the mid-2000s,164 and elderly care continued to be provided to a high extent within the family. Having said this, a number of elements contributed to a further marketization of the care system. To begin with, the proportion of those seeking professional support was increasing so that the rules of the new care market (rather than those governing family care) extended to a growing number of citizens.165 Moreover, frail senior citizens were spending ever more private resources on care. As the demand for care services continued to increase, the benefits granted by the long-term care insurance were falling per capita between 1995 and 2005.166 User fees were on the rise, because providers received ever less extra money for investments in facilities. Although legislation obliged the Länder and the municipalities to foster the care infrastructure, funds earmarked for this were cut in many places. The same holds for grants from the churches, which had previously topped up the budget of many nonprofit providers. Overall, competition became harsher. In the domiciliary sector, care recipients (or their relatives) became ever more accustomed selecting a service provider according to which care package the latter suggested to deliver

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for a given budget. The market share of private providers, insignificant prior to the introduction of long-term care insurance, achieved 55 percent as of the mid-2000s. Some of them settled in niche markets of well-paid special services (such as ventilation).167 The rhetoric of the frail elderly becoming customers of care agencies was proliferating rapidly. Consequently, even well-established nonprofit organizations underwent far-reaching business reengineering. They set up independent business units separated from their associational core, thus decoupling service provision from their civil-society-based rank and file. Regarding personal care, moreover, the supply of complementary services was getting ever more segmented, involving various organizations and being charged differently. Especially in the field of meals-on-wheels, the for-profit sector extended its market share markedly. Moreover, the grey market was booming, via a rising number of (frequently undeclared) immigrants employed as private carers. The market for residential care was developing at a similar pace.168 Some providers previously focusing on rehabilitation services (for the disabled, mainly) relabelled their institution a care home in order to benefit from the care insurance payments. The share of commercial suppliers was constantly growing. As of the mid-2000s, more than a third of old people’s homes were run by for-profit businesses, part of which was quoted on the equity market. For-profit providers rarely drew on industry-wide settlements on wages; rather, they tended to grant higher than settlementdefined remunerations to managers and lower salaries to care workers. Traditional nonprofit providers, initially reluctant to copy this practice, slowly adopted this policy. In many places, these providers remained embedded in local policy networks, but an increasing economic rivalry, including among nonprofit homes, surfaced elsewhere. It became commonplace for these homes to place adverts and to strive for surplus revenue, thus putting a strain on legal requirements to be met in order to qualify as a tax-advantaged charity. Competitive orientations were also prompted by new regulations, with care homes being allowed to be established without public authorization in a number of Länder. This provoked the creation of overcapacities and greater disparity between homes concerning the quality offered. Those who were able to afford larger user fees were ever more invited to seek best value for money on the care home market. Some providers suggested reduced charges where relatives participated in the provision of certain services on a regular basis. On the other hand, waiting lists for those seeking less expensive provision remained an issue, especially in large urban settings. As of the mid-2000s, more than one-third of those living in a retirement home were unable to afford charges. Relying on social assistance, many of them had to accept rather poor quality. Moreover, numerous senior citizens entering a residence did so through a direct transition from hospital rather than after careful consideration of alternative options. Obviously, free choice was hampered here.

Welfare Markets in Old-Age Provision 71 There was wide-reaching public debate about the consequences of the afore-sketched developments. Regarding domiciliary provision, especially newer and smaller agencies were blamed for employing low-skilled personnel and delivering their services at too fast a pace. Critics also tackled traditional nonprofit providers; these were often bound to generous collective agreements and particularly pressured to neglect clients with complex needs, who were barely covered by the reimbursed care packages. As regards residential care, similar problems surfaced. Overall, care homes had reduced the proportion of skilled workers among their personnel; many were understaffed. In addition, the industry was blamed for tolerating a modest state of health among residents. It was also accused of having passed inaccurate contracts with residents, for example, regarding fees for extra services. Finally, experts took issue with the existing advice schemes they deemed ineffective for the bulk of users. In reaction to this, public policies were designed to ensure better quality, especially through legislation passed in 2002. The new law imposed quality management systems and periodic inspections of care suppliers, to be conducted by the medical service departments of the sickness funds or by special independent agencies. Moreover, a small allowance to fund care attendance and related services was introduced, based on a scheme fostering the recourse to lay help or petty jobs in this field. In addition, steps were taken to make professional elderly services more diversified.169 There were also initiatives aimed at improving counselling services. The biggest German Land enacted a law stipulating that local authorities had to provide unbiased information to those seeking professional support. Subsequently, a number of municipal offices started to run local advice bureaus. Across Germany, a variety of networks entrusted with the coordination of the dispersed support schemes were established. However, most of these initiatives faced the problem that (federal) state money was only available to pushstart such an undertaking, so that a number of services had to be closed after a while. In addition, concerns were expressed that the advice provided by the aforementioned bureaus did not embrace information about (alleged or evidenced) quality differences between providers. The government coming into office by 2005 envisaged reinforcing family care—with employees being entitled to take unpaid holidays from work in order to care for relatives. More importantly, there was debate about the future of long-term care insurance. Contributions had remained stable over the years after the insurance’s inception, apart from a small supplement imposed on childless enrolees from 2005 onwards. Critics bemoaned that benefits had remained frozen at the level fixed in 1995. Although insurance coverage continued to be relatively far-reaching (at least if compared to Britain), the scheme’s generosity was increasingly felt to be shrinking, given that benefits had remained frozen at the level fixed in 1995. On the other hand, a number of politicians and experts, referring to foreseeable deficits in the balance sheet of the scheme, advocated the introduction of a second private tier,

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arguing that the already existing private plans, mandatory for those not covered by (quasi-public) health care insurance, had proven healthier economically. Others swore by the injection of tax revenue or the use of assets accrued in the private insurance sector to subsidize the underfunded public schemes, given that the sector covered younger and richer cohorts of the population. As of the mid-2000s, the funding system remained widely sheltered from market forces, but competitive service supply was in the habits of both regulators and citizens. Market regulation remained a permanent issue, yet the welfare mix having taken shape with the inception of long-term care insurance was barely called into question. What is more, a new direct payment scheme was tested from 2004 onwards, offering welfare recipients opportunities to use insurance benefits for purchasing services independently of the catalogue of services agreed between the long-term care funds and the provider associations. Overall, then, marketization was slow but thorough—in elderly care as well.

3.2.4 France: Ever MoreThrough the Back Door Pensions As noted earlier, the pension reform enacted in 2003 brought considerable change into the French landscape of retirement provision. The tendency towards a stepwise cutback of the first mandatory pillar was broadened, and saving vehicles typical of funded pension systems were introduced for the first time in the history of the French welfare state.170 Given the sharp drop in the wage-replacement rate scheduled for future cohorts of pensioners—an evolution also due to the deceasing generosity of the second mandatory pillar—the interest in more market-based patterns of retirement provision appeared to grow. Survey research showed that, as of the mid-2000s, more than a third of the (adult) French population was saving for old age on a private basis, besides the mandatory schemes. It also confirmed an increasing propensity to accrue private funds for old age. In the first years of the new millennium, the financial sector intensified its marketing for pension saving vehicles. Banks and insurance companies made manifold efforts to capture customers by marketing the new, lifelong saving contracts, for example, on websites inviting potential clients to calculate the return-on-investment of private pension plans.171 Moreover, all sorts of financial intermediaries approached companies that wished to develop their own corporate DC pension plan; in the past, only a small number of specialized banking institutions had been involved in this business. In addition, the life insurance sector created an agency with a remit to survey attitudes towards private saving for retirement on a regular basis. Altogether, the market for personal pension plans appeared quite fragmented even though leading financial intermediaries like the biggest saving

Welfare Markets in Old-Age Provision 73 cooperative (AFER) decided to remain outside the (new) pension plan business, arguing that traditional life insurance was a better solution for most citizens. Nevertheless, competition was harsh as evidenced by considerable differences in administration fees and contract terms. The new market dynamics also affected the long-standing funded schemes for civil servants, which the reform had granted the same advantages as those conferred to other personal pension plans (PERP). Overall, personal plans saw a notable increase in subscribers. This was indicative of dynamics typical of a (more) market-related retirement provision, striking in a country with a tradition of a strong mandatory (two-tiered) pay-as-you-go system. Even prior to the introduction of the new private pension plans, saving vehicles deemed to serve as a security for later life had proved quite dynamic. Between 1990 and 2000, the amount of money invested in the life insurance sector had quadrupled.172 With the new personal pension plans (PERP), the tax advantage of regulated saving increased markedly. Only three years after their inception in 2003, more than one million and a half individuals held such a plan. However, the impression of an overwhelming success warrants qualification as there were tendencies towards rapid market saturation; in many cases, moreover, saving products previously contracted under a different formula were just reconverted into the new schemes. Many suppliers recommended investments in assets, but the majority of new subscribers preferred small-scale investments in secure bonds. The typical, mostly lifestyled, plan did not offer much flexibility in deciding where to invest the money. Regarding governance, the organizational framework by which the state intended to protect savers, namely the one of the saving cooperative, led insurance companies to set up such cooperatives on their own initiative and co-opt fellows from their industry onto the supervisory boards. There also was some evolution in the field of occupational provision. While traditional DB plans (retraites chapeau) were losing ground, a growing (albeit still marginal) number of companies offered their employees a gateway to DC schemes.173 After 2003, there was a remarkable boom of the new tax-advantaged corporate pension plans (PERCO)174—even though the vast majority of enterprises did not have an occupational scheme at their disposal. Those covered by company-based long-term saving arrangements—the predecessors of the PERCO—often continued to fuel their old accounts. Notwithstanding the emergence of this novel third private pillar, the French pension industry was affected by trouble (as well). First of all, the returns-on-investment, which life insurance companies had promised to plan holders, markedly plummeted. On average, interest rates halved between 1990 and 2003, albeit within a broad range (rates differed between competing suppliers by up to 50 percent). Saving vehicles based on a mix of assets (the so-called multisupport life insurances) registered a significant drop in their value. Against this background, some savers took their insurance company to court, complaining over erroneous advice. One company was

74 The Culture of Welfare Markets condemned to grant compensation. Moreover, a scandal shattered public confidence in the biggest saving cooperative.175 Its presidents had benefited from hidden payments from the insurance company to which they had outcontracted their plan’s management. As regards occupational pensions, some traditional DB schemes had run into deficit. As of the mid-2000s, half of those firms offering a final salary plan were supposed to carry deficits, with some companies experiencing severe problems with unfunded commitments due to an excessive reliance on the stock market.176 It is noteworthy that the predecessors of the new company schemes, the occupational long-term saving plans, were equally hit by developments in the financial market. Some of these schemes lost 30 percent of accrued values.177 These developments did arouse some attention in the public sphere, although the political debate focused on the pension reform in 2003, which was heavily contested by part of the political establishment and major stakeholders in the retirement system, especially trade unions. The reform was attacked by massive strike movements and huge demonstrations throughout the whole country. French trade unions did not systematically reject arrangements for (collective) funded saving. They even embarked on the certification of ethical investment funds, deemed to provide fairer ways of occupational long-term saving. Many, however, refused private pension provision as a matter of principle. Following the reform, the debate continued to address the adequacy of the implemented overhaul. Some observers viewed the latter as insufficient; others advocated the withdrawal of the reform against the prospect of shrinking public pension provision for average retirees. Concerning the proliferation of the new saving schemes, some voices evoked their limited success whereas others predicted a more rosy future for them. There were also some concerns about mis-selling as low-income earners had been enticed by part of the financial services industry to purchase saving plans offering few or no tax incentives. Public policies continued to interfere. A highly controversial decree enacted in 2004 authorized tax-free withdrawals from saving plans in order to stimulate the economy.178 This appeared highly indicative of the very idea of private retirement provision not taking root even within the political establishment. Besides, there was debate on novel early retirement schemes deemed to undermine the philosophy of the pension reform. Political observers predicted a further overhaul of the system after the elections of 2007, as the mandatory schemes continued to carry deficits in spite of the cutbacks implemented in 1993 and 2003. Thus, the gradual privatization of these schemes remained on the political agenda. Importantly, however, the well-entrenched boundaries between private saving and retirement provision became increasingly blurred. From this perspective, it was ever more through the back door that market-based provision was entered into the French pension system—although in

Welfare Markets in Old-Age Provision 75 quantitative terms, the private pension market (still) remained limited in scope. Elderly Care In the French care system, the market rationale equally has gained importance over recent years, albeit from a comparatively low level.179 This materialized in a range of developments. To begin with, the market for private care insurance did not cease to grow. While collective provision via corporate social protection schemes was on the retreat, thirty insurance companies were marketing a long-term care plan in the early 2000s, including new formulas combining saving and insurance against the risk of dependence. Although some politicians called for public subsidies and tax breaks to endorse the proliferation of these plans, the state did not modify the respective legislation. Rather, it promoted the development of domiciliary (personal) care services, including from the for-profit sector. The industry as such was rapidly growing. The number of service hours increased by two-thirds between 2000 and 2004. While personal care provision remained largely resourced by the various (quasi-) public funds, the proportion of privately purchased services appeared to increase with new regulations reducing (by one-third) the threshold up to which care recipients were exempt from user fees.180 Regarding the ‘competitive distortion’ (Frossard et al. 2004, 241), introduced into personal care by the fostering of home help employment during the 1990s, the first years following the inception of the personal allowance saw a tendency towards a privileged use of service agencies, rather than home helps (at least for those with more serious incapacities). However, the sector had been opened to commercial agencies in 1996. Although private firms were for years reluctant to settle into it, the private sector embraced 500 personal care companies by 2005, with some of them also offering child care services.181 As all providers had to be licensed by the départements, they sometimes faced resistance among local politicians on good terms with the nonprofit sector. Overall, the latter remained the dominant player. The government, however, intensified its efforts to build a new mixed market for personal care services. The so-called Borloo Plan, enacted in 2005, amended the French way to direct payment as depicted above; in particular, the plan enhanced the tax credit and made the individual purchase of personal care services easier to manage.182 Also, a national regulation clarified the conditions under which private agencies had a right to be licensed by the départements. Irrespective of the success of this programme, uncertain for the time being, the sector exhibited tendencies towards increased supplier rivalry. While the predominantly nonprofit providers had for long not perceived themselves as fully fledged market actors, this appeared to change in the early 2000s. The national federations of personal home care providers invested in broader marketing activities, for instance, through opening service shops and call

76 The Culture of Welfare Markets centres meant to channel new clients to their corporate members. Often, such investments were realized through partnerships with businesses seeking cross-selling opportunities (especially insurance companies). In addition, there were slight tendencies towards quasi-market governance. A regulation passed in 2003 stipulated that home help providers were meant to be paid according to evidenced performance, agreed in providerspecific contracts. It abolished the monopoly of the previous funding model (which had commonly been based on a uniform fee-per-hour arrangement) and opened the door to more competitive contracting policies. Furthermore, a procedure for issuing quality labels was enacted by the end of the 1990s.183 Outpatient nursing continued to be governed through collective agreements between the health insurance funds and both the care centres (via block grants) and independent nurses (via fee-per-hour schemes). Given the scarcity in the available volume of nursing services and the agreed caps on the professionals’ caseloads, the market rationale remained rather constrained here. In the residential care sector, the weight of for-profit providers continued to grow, with a rate of growth approaching 300 percent since the mid-1980s.184 Some of these providers were traded on the stock market.185 A new ‘competitive environment’ (Frossard et al. 2004, 242) took shape, with commercial companies challenging the hitherto dominating nonprofit providers. In some places, such as Paris, only commercial homes were newly opened. Special guides were edited to give an orientation to those (higher income) users looking for a residence, given that market reviews did not find a clear association between the price charged and the quality offered. Furthermore, the public funding mechanism for residential care was changed. The new rule stipulated that the same amount of subsidies be granted for a given state of dependency, irrespective of the real expenses incurred by a care home.186 At the same time, concerns were being expressed in the public sphere over (alleged) structural insufficiencies of the French care system. Following reports on cases of mal-treatment in care homes, a national alert commission was created to take measures against this practice. Later on, the country witnessed a vigorous debate on what was perceived as a veritable crisis of the whole care system. This debate was triggered by the tragedy of frail senior citizens dying during the heat wave in 2003, (supposedly) in the absence of adequate protection. Thereafter, the state reinforced its regulatory functions. It injected additional public money into residential care in order to raise quality standards and to accelerate the renovation of facilities. Moreover, care homes now had to sign a quality agreement with the president of the département and regional representatives of the national sickness fund, with the homes’ achievements becoming subject to recurrent evaluation. Quality targets were established which every home was expected to meet in the future. While this was (theoretically) conducive to a national standardization of the terms of business regardless of the type of provider under contract, the new policy did not introduce a linkage between public funding and targets met.

Welfare Markets in Old-Age Provision 77 The domiciliary care sector, meant to be strengthened at the expense of residential provision, saw a surge in public subsidies as well.187 A new payroll levy was introduced in 2003; it was to be assumed solely by employers. However, the latter were compensated for this by the (very controversial) abolishment of a bank holiday which became an additional (unpaid) working day imposed on all employees. Though stronger public efforts to enhance the quality of elderly care were widely welcome, the method of funding was controversial and resulted in strikes and numerous public petitions. Altogether, the development of welfare markets in the French elderly care sector showed a mixed picture over the period under study. Voluntaristic public policies were blatant, alongside a relatively high, and growing, input of public resources into the care system. After all, marketization remained limited in scope. Yet, the boundaries between nonprofit and for-profit provision appeared to become increasingly blurred as there were new initiatives to foster private purchase of home help(ers). Seen in this light, the market rationale was acceding to the French care system ever more through the back door.

3.2.5 Welfare Market Dynamics Under Way—A Comparative Synopsis This chapter has provided basic insights into the role the market rationale is playing in care and pension systems internationally. In essence, it has shown that markets matter, albeit to a varying extent and in different forms. Market-based arrangements and routines have been identified as driving forces in Britain; in Canada, they appear as less intrusive, given that public pension pillars have remained strong(er) and for-profit delivery in elderly care turns out to be limited or, at least, quite controversial. In the continental European welfare states, these arrangements and routines have been introduced with some delay. They have proved quite successful in Germany, in the sense that they appear to have entered into the habits of most relevant collective stakeholders; France exhibits a situation where they have settled at the margins and sit uncomfortable with the welfare doctrine(s) endorsed by large sections of the sociopolitical establishment. Everywhere, however, welfare markets unfold their own complex dynamics, ranging from incremental radicalization to periodic containment. Market-based arrangements and routines of social welfare provision are firmly entrenched in Britain; but they do not include all citizens equally and have been subject to a series of regulations aimed at civilizing the market play through, for instance, quality inspection and the protection of pension plans. Canada has seen the creeping end of the postwar promise of pension and care schemes providing pre-defined collective benefits, either guaranteed by companies (for the bulk of the male workforce) or by public bodies. This movement however does not extend to basic pension provision; in addition, it appears inconsistent in the care system, as Ontario has embarked

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on true quasi-market governance and Québec has not. In Germany, (subsidized) welfare markets have taken root slowly but thoroughly within a comparatively close regulatory framework, guaranteeing, for example, the nominal value of accumulated pension plan contributions and nonmeanstested benefits to care recipients. In France, welfare markets are admitted at the margins and more implicitly; it appears, however, that the influence of the market rationale is growing in this country as well, for instance with respect to home helps working in personal care or to nonpublic pension plans being publicly subsidized for the first time in the history of the French welfare state. Looking at the evidence, it is possible to single out two general dynamics occurring across countries and organizational fields. Firstly, there appears to be a complex interplay between market-based processes, on the one hand, and their public regulation, on the other. Once welfare markets have been established, public and collective actors are requested to make them more transparent (by basic standards, advice agencies, hotlines, etc.), given that market-based provision tends to entail confusion among users. Moreover, all countries know situations where the state is challenged by market developments which are viewed as producing aberrations such as lost pension entitlements or miserable care services. The aforementioned interplay materializes in permanent (re-)regulation, addressing issues ranging from adjusting portability standards in retirement provision to ever more sophisticated inspection methods. Secondly, individual options concerning the mode and the range of available provision appear to become wider on the whole; yet both the regulation of welfare markets and the nature of market-based resource allocation entail a social bias excluding larger sections of the clientele from this choice. Comparing the dynamics of change in more detail, the evidence exhibits both a number of uniform transnational patterns and nation-specific elements (see Table 2, below). With respect to pensions, common patterns include the overall expansion of private saving for old age, the devaluation of assets managed by the pension industry, a crisis in (DB) corporate schemes, and turbulences (scandals) in at least some sections of the system. To this, add worldwide concerns over demographic change impacting (as well) on the viability of the public schemes and continuous campaigns from the private-pension industry asserting that public pillars are not sustainable, irrespective of the level of public provision in a given country. As for differences, it makes sense to reconsider the categories referred to in section 3.1.5. Regarding typical market dynamics as affecting average citizens,188 Britain saw, between the mid-1980s and the mid-2000s, a significant shift towards market-based provision. Canada was less affected by this development, given the consolidation of the public pillar, on the one hand, and the (relative!) robustness of the DB pension sector, on the other. In Germany, the market-based (albeit closely regulated) saving schemes were being firmly settled, although take-up was still limited. By contrast, such schemes were still in their infancy in the French system as of the mid-2000s.

Welfare Markets in Old-Age Provision 79 Regulatory dynamics occurring between the late 1990s and the mid2000s loosely connect with these developments. The British case presents a quite turbulent agenda of perpetual re-regulation amidst an overly deregulated pension landscape. Canada’s nonpublic pension pillars appeared as widely deregulated as well, but its regulatory dynamics were weaker. The evolution in the two continental European states, where market-based pension vehicles were introduced under a strong regulatory regime, differed in that Germany saw a permanent refinement of these vehicles whereas their introduction in France rather appeared as a one-shot political act. Germany focused on a postcorporatist approach to market-based pension provision involving companies, social partners, and the pension industry. Stakeholders and regulators of the French pension system, though timidly embarking on a similar undertaking, continued to be primarily concerned with the future design of the mandatory pillars. Although the four pension systems shared a number of concerns penetrating the public agenda, there were distinctive problems referred to in each of them. The difficult relation between means-tested basic pensions and personal plans, deemed to deter low-income citizens from saving privately, was a major issue in Britain, together with concerns over a shrinking coverage with nonpublic pensions and the threat of occupational entitlements being lost following a firm’s bankruptcy. The latter two preoccupations were salient in Canada as well; a distinctive stumbling block in that country however was the management of the funded public pension plan(s), viewed as being ‘unethical’ by many. Major concerns in Germany included a limited take-up of the subsidized personal pension plans and the shrinking generosity of the public pillar. The latter point received much attention in France as well; here, however, the new private plans were often viewed as fundamentally inappropriate for meeting the challenge of securing retirement provision. With respect to welfare markets in elderly care, one can again distinguish between transnational dynamics, on the one hand, and particular national developments, on the other. Common to all systems under review here were the expansion of for-profit delivery and of private (co-)payment, further (inconsistent) tendencies towards more managed competition, and, finally, public concerns over poor quality (especially in residential care and concerning senior citizens affected by dementia). To this, add the overall drive towards more quality inspection and accreditation programmes, the tendency of nonprofit agencies to become ever more entrepreneurial, and the overall work pressure on independent providers and/or their staff. Having said this, the market dynamics (as affecting average citizens) were not the same across the four countries. Britain saw a significant shift towards for-profit delivery which was not paralleled by a rise in private long-term insurance. Regarding Canada, for-profit delivery firmly settled in the Ontarian care system but developed at the margins in Québec. The drive towards for-profit delivery proved strong in Germany, too; however,

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the nonprofit sector appeared to remain a key player throughout the system. As in Canada, voluntary private insurance developed slowly. In France, where for-profit delivery began to take shape very late and at a low scale, the accentuation of the market rationale became apparent, above all, in the entrepreneurial spirit of nonprofit suppliers. It was also endorsed by the proliferation of (complementary) private long-term insurance, outstanding when compared to developments in the three other countries under review here. Glancing at the period running from the late 1990s to the mid-2000s, there was also considerable variety in regulatory dynamics. The British system was subject to strong regulatory activities, albeit within an uncontested quasi-market. In Ontario, the latter came under scrutiny. Overall, Canada saw moderate changes in the regulation of the care system. The move towards care provision purchased from, or subcontracted to, independent providers was underscored far and wide. Québec, however, set a counterpoint in strengthening the lead role of public agencies responsible for steering the entire care system without managed competition. In Germany, regulatory dynamics proved moderate within an ever more established welfare mix. The French system saw some stronger dynamics, with a greater public involvement in care provision following the heat wave in 2003. Regarding outstanding issues on the public agenda, it was the tendency towards the rationing of publicly managed service provision that appeared prominent in Britain and (to a lesser degree) in Canada. British observers were also preoccupied with rising user fees; a major issue in Ontario was the volatility of quasi-market-based home care. Germany saw a debate about the impact of capped budgets on long-term care insurance on the one hand and about (assumed) deficits in this scheme, on the other. Major stumbling blocks in France were a widely perceived unreliability of the care system and the (alleged) inequity of the funding regime, with powerful protests against imposing an extra working day on salaried citizens in order to fuel the national care budget. Altogether, many of the evolutions in regulatory dynamics and market developments are consistent with the relative importance of market rationale in each of the systems. Others, however, develop crosswise to the institutional logic inherent in each system. For instance, France knows a highly dynamic private long-term care insurance sector, although the care system appears under strong statutory control. This differs from the Anglo-Saxon systems where private care insurance proves marginal and public provision is on the retreat. Moreover, it is the rather different systems of Britain and France that see similarly turbulent regulatory dynamics (if compared to Germany and Canada). Concerning pensions, France, sharing with Germany a deeply entrenched tradition of social insurance, appears to remain rather immune to the doctrine of private retirement provision whereas its neighbour has ever more readily accepted this doctrine. Furthermore, the

Welfare Markets in Old-Age Provision 81 Table 2: Major dynamics in welfare markets for old-age provision Britain

CAN

G

F

Pensions Cross-country tendencies: expansion of private saving for old age, devaluation of assets, crisis in (DB) corporate schemes, market turbulence (scandals) Market dynamics (as affecting average citizens)

Strong drive towards market pensions

Moderate drive Creeping settletowards market ment of market pensions pensions

Settlement of market pensions at the margins

Regulation

Turbulent regulatory dynamics in a deregulated landscape

Limited regulatory dynamics in a deregulated landscape

Permanent refinement of (strong) regulations

One-shot (strong) regulation with weak dynamics

Shrinking coverage in the private sector & lost entitlements & ‘unethical’ pension fund management

Limited take-up of the subsidized plans & shrinking generosity of the public pillar

Inappropriateness of new private plans & shrinking generosity of the public pillar

Particular Disincentives to problems save privately perceived & shrinking coverage in the private sector & lost entitlements Care

Cross-country tendencies: expansion of for-profit delivery and private (co-)payment, more managed competition, concerns over poor quality Market dynamics (as affecting average citizens)

Strong drive Moderate drive towards fortowards forprofit delivery profit delivery & little pri& little private vate insurance insurance

Moderate drive Weak drive towards fortowards forprofit delivery profit delivery & entrepreneur- & entrepreneurial nonprofit ial nonprofit sector & quite sector & some strong private private insurinsurance ance

Regulation Strong regulatory dynamics within an uncontested quasi- market

Moderate regulaModerate tory dynamics regulatory in a settled dynamics & regime move towards independent provision

Strong regulatory dynamics towards more state involvement

Particular problems perceived

Rationing & volatile quasi-market governance

Equity of the funding regime

Rationing & user fees

Capped budgets & deficits in the long-term care insurance

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disincentive problem originating in means-testing and a strong reliance on private thrift appears to be referred to much more vigorously in Britain than in Canada, notwithstanding a comparable design of the overall pension system. A final lesson to be drawn from this comparative assessment is that (partial) marketization does not (necessarily) involve privatization in the sense that care and pensions provision end up as a mere private affair. Rather, welfare markets have remained a political issue far and wide. The introduction, or deepening, of market governance in old-age provision does not entail the end of collective sense-making.

4

The Role of (Welfare) Culture The State of the Art and an Analytical Grid

To date, ‘this shapeless, seething, and shifting thing that we call culture’ (Archer 1996, XXIV) has not been a key issue in the analysis of social welfare provision. Equally, apart from some strands of economic sociology, markets have not been considered primarily as a cultural phenomenon by the social sciences. The relative neglect of culture also extends to analyses of the institutional management of old age, with the notable exception of cultural gerontology (Powell 2001, Anderson 2003). Having said this, scattered references to the role of culture can be found for each of these fields of enquiry. Drawing on basic strands in culture-sensitive social theory and in literatures dealing with cultural aspects of welfare, of markets, and of oldage provision respectively, this chapter delineates the state of the art relevant to the theme of this book. This provides important clues to the building of a conceptual framework for the subsequent investigation; the framework is developed in the final section of this chapter.

4.1 THE CULTURE OF WELFARE, THE CULTURE OF THE MARKET Culture is ‘often used as a catch-all explanation for a wide range of phenomena’ (Joseph 1998, 8). This may be why the social sciences of the twentieth century have long dealt with this subject rather at the margins.1 Only more recently has the sociological relevance of culture significantly been rediscovered. This section will start by briefly discussing the role of culture in social theory before reviewing culture-sensitive approaches to social welfare provision, including with respect to international variety. A quick foray into theories elaborating on the culture of markets will follow. This will help when considering the case of old-age provision with regard to culture and marketization in the subsequent section.

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The Social Sciences and the ‘Cultural Struggle’ The social sciences have recently become quite sensitive to the theme of culture. There has been a growing interest in micro- and macrosociological dimensions, with the focus being set either on the interplay between culture and human action or on the role of institutions in moulding social relations (Wuthnow and Witten 1988). In the political sciences, culture meanwhile has become a key issue in the analysis of political systems and their distinct normative foundations internationally.2 Present-day philosophy, and strands of social theory relying on it, have also developed a renewed interest in the cultural making of the world, against the background of a (purported) postmodern age where questions of meaning are deemed to gain prevalence over hard social facts. Against this background, many refer to a ‘cultural turn’ affecting the social sciences (Ray and Sayer 1999; Nash 2001; Smart 2003). However, the role of culture has been a controversial issue from the very beginnings of the social sciences. Classical thinkers analysing society through the lens of (its) political economy saw culture as the epiphenomenon of the economic base of social life. Marx (for example 1973) is a case in point.3 From his perspective, the evolution of mankind operates via its material world in correspondence to distinct sets of social relations.4 Individuals and social classes make sense of this material world and these relations, but they do not construe them by recourse to the ‘power of ideas.’ Applied to current societal developments, this approach suggests straightforward dynamics of social change. It implies that the evolution of advanced capitalism and its inherent intensification of market exchange, both within a given society and internationally, entail automatic transformations in the meanings conferred upon social relations. The prevailing patterns of sense-making are expected, inter alia, to conform to the requirements of an intensified process of ‘creative destruction’5—that is, ever more (market) flexibility and spatial mobility imposed on human actors. In particular, short-term efficiency becomes a major value in each sphere of social life. Socioeconomic change determines cultural change. In the thinking of (other) early sociologists, there is less of a clear hierarchy between culture and socioeconomic relations. Rather, both are understood to coevolve. Durkheim (1984) makes the point of a ‘collective consciousness’ underlying social change and modernization, with ‘organic’ solidarity emerging as a set of representations through which human beings confer sense upon their state of interdependency. This occurs in a social order shaped by an increasing division of labour and by ever more anonymous regulation of human life. From Durkheim’s perspective, people need such collective representations to cope with modernization (an idea that corresponds to a functional explanation of culture6), but they also tend to further develop such representations (which leaves room for creative sense-making). One example is ‘contract morality,’ that is, a generalized expectation

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that contractors should abide by formal agreements even where cheating would go unnoticed. Taking this stance when analysing developments in current society would imply that a sense for the need of collective regulation is instilled in modern citizens but that changes to the social structure of that society—for instance, the division of labour following the decline of largescale industrial employment—has ‘profound implications for the organization of a society‘s cultural foundations’ (Baldock 2000, 125). In his seminal work on the ‘protestant ethic and the spirit of capitalism,’ Weber (1930) laid the ground for a further version of this assumption on coevolution. To put it briefly, he saw the transformation of religion, namely Protestantism, as a central trigger of capitalism in major Western nations (rather than elsewhere). In his eyes, the experience of disenchantment and the proliferation of a Calvinist ethos of seeking God’s mercy through profane and restless economic activity (asceticism) were major driving forces of capitalist development. Weber found that human beings created social reality by recourse to shared worldviews, even though he assumed valueoriented agency would become ever more exposed to bureaucratic rationalization throughout modernization (Weber 1949; 1968). Culture, he wrote, ‘is the endowment of a finite segment of the meaningless infinity of events in the world with meaning and significance from the standpoint of human beings’ (Weber 1949, 81). From this perspective, then, cultural representations are fundamental to any social order. Ideas and values become a reality sui generis, with the evolution of mankind being partially driven by these ideas and values.7 Applied to current developments in Western society, this approach implies that cultural factors—such as the sacredness of human life—impinge on institutional choice rather than being simply subordinated to economic change. In other words: Economic transformation does not fully explain societal change. At first glance, this nondeterminism in Weber’s approach to cultural development appears to have been evaporated by the functionalist turn in twentieth-century sociology as represented by the works of Parsons (see Archer 1996, 32–37). Parsons (1935, 293) maintained that, although cultural values were ‘ultimate ends’ in human action, individual behaviour, and social systems at large were basically governed by social norms generalized throughout society, including on the temporal scale.8 However, some sociologists have cast doubt on the widely disseminated assertion of Parsons’ approach being deterministic, especially with respect to his theory of social systems (e.g., Münch 1987, 137). There is indeed some truth in this objection. According to Parsons, modern society exhibits a ‘cultural subsystem’ characterized by particular functions. In a nutshell, this subsystem is built upon symbols encapsulating shared understandings and value commitments. With its role to construct and store socially binding meanings, this subsystem depends on the performance of complementary subsystems, especially the political and economic subsystems. A crucial characteristic of the subsystem is that its substance is relatively coherent

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but open to pragmatic recourse. In the terms of Parsons, minimum symbolic complexity goes alongside maximum contingency of action. The dynamics of the political and economic system, on the one hand, and the space left to a social (collective) actor’s pragmatic recourse to the subsystem’s symbols, on the other, allow for creeping cultural change despite the maintenance function of the cultural subsystem. For instance, (civic) religion is a universal cultural feature of human society, but its linkage to the state or the economic system is dynamic and open to variation. From this perspective, Weber’s nondeterminism is underpinned rather than ruled out by Parsons. There are more radical approaches to culture-based human agency, though. In his ‘theory of communicative action,’ Habermas (1984) has drawn on the legacy of both classical and functionalist sociology in order to build a theory of how human beings may be able to arrange and develop the social world according not only to their instrumental goals but also to shared ethical norms. Although Habermas contends contemporary society is subject to forces which impede human beings from (fully) operating in this way,9 he sets out the potential of modern society to govern itself through a dialogue among prudent citizens. In this dialogue, all kinds of value-commitments have their own right. Importantly, Habermas views the public sphere as a place even highly differentiated societies can use to organize communicative exchange about valuable and reasonable ways of life (Habermas 1989). According to Habermas, the public sphere as it has taken shape with ongoing modernization often precludes such communication. Yet, implicitly, Habermas’s theory reads as a model of how culture may develop (or does empirically develop) through deliberation on collective affairs—for instance, general prerequisites of a good life—in a given historical situation. Regarding developments in contemporary western society, his model addresses a space in which culture conditions societal evolution irrespective of economic circumstances, provided that people find avenues to an open dialogue within civil society, for instance. To some extent, this echoes the key ‘ideology’ of modernity as the latter was premised on the assumption that societal evolution follows the agenda of civilization, including the broadening of human rights and of democracy. More recently, this idea of advanced Western societies tending to create new spaces for social dialogue and value-based communications has been taken up by scholars postulating the advent of what they name ‘reflexive modernity’ (Beck et al. 1994). This body of thought contends Western societies have become aware of the limits of cognitive and technical rationalization, with growing sections of the population being condemned, but also eager, to remodel themselves as reflexive ‘risk managers.’ Options for human agency amplify considerably while simultaneously being burdened with rising uncertainty. As there are growing doubts on the expertise of professionals or statutory regulation, people become aware of being increasingly responsible for their own way of life. Consequently, all aspects of human existence become subject to discretion and arbitration, including in the public media.

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This does not imply that anything goes. Rather, proponents of this approach argue that individual or collective decisions, while being tricky to take, prove indispensable. From their narrative it can be inferred that current society faces an extension of cultural influences on the making of social order, as people are increasingly compelled to actively make sense of their way of living (together). To an extent, the aforementioned agenda of modernity is radicalized here. Individuals are urged to bring their new freedoms to bear, including through communicative action. Regarding the current stage of societal development, both the rise of individualism and the open-endedness of social negotiations on public action would be seen as exhibiting the evolutionary power of culture from this theoretical standpoint. Both the Habermasian ‘dialogue model’ and the vision of reflexive modernization sound fairly idealistic to the ears of a number of critics. Weberians and (post)Marxists stress the asymmetric character of societal development under the reign of unleashed capitalism and hyper-rationalized bureaucracies. For large parts of the population, they posit, a lack of economic resources or the dominance of bureaucratic elites set clear limits to reflexive human agency. Poststructuralists, too, cast doubt on the possibility of free dialogue and discretion. Drawing on Foucault (see, for instance, 1988), they contend that communications in the public sphere reflect the power structure prominent in a given society, with shared meaning being largely imposed on individuals from above. Culture, they argue, is instrumental rather than an expression of shared values—it appears as a manipulated societal consensus (see Archer 1996, 47–71). These critiques are substantial insofar as economic and political power should not be left out of the picture (see the elaboration on extrinsic cultural change below). However, it can hardly be denied that the modern public sphere is pluralistic. At the very least, with a growing space left to civic participation in most Western societies, a power-led control of the citizenry requires ‘culture governance’ (Bang 2004), in the sense that ruling bureaucracies must seek to steer public affairs despite more social dialogue. Also, there may be cultural resistance from below, expressed through street-level orientations, ritual, and myth, as the literature on cultural studies argues (Storey 1996). Seen in this light, cultural representations serve as a catalyst in struggles over social power and influence, regardless of the hierarchical and economic structures entrenched in a given society (Joseph 1998). That cultural factors have grown more fundamental to soci(et)al life over the recent past is also advanced by postmodernist theory. According to this (quite diversified) body of thought, contemporary society faces an endless richness of meaningful texts as well as an infinite range of possible readings, conducive to polyvocality within a society’s culture (Lyotard 1986). Wellestablished collective representations—such as the idea of continuing social progress—are collapsing and parallel worlds of social representations are paramount. The mass media construct ‘hyper-realities’ (fads and fashions) which do not (fully) correspond to the material world but contribute

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nonetheless to the formation of human identity. Social constructions triumph over rational reasoning; anything becomes negotiable. In a way, the postmodern narrative presents an exacerbated version of both the observation of an ever more ‘reflexive modernity’ and the idea that there is an indeterminate situation where ‘culture governance’ from above confronts (potential) cultural resistance from below. Though the postmodern narrative—querying any rationality that allows human beings to agree on what is real, right, and just—is certainly overstating the open-endedness of collective (inter)action in the existing welfare state settlement, social meanings associated with public regulations have become subject to broader and less prechannelled social negotiations. ‘With the state ethical monopoly . . . in abeyance’ (Bauman 1995, 5) and the ‘slow yet relentless dismantling or weakening of agencies which used to institutionalize the commonality of fate’ (Bauman 1995, 271), no collective reference can be taken for granted anymore. Rather, each reference becomes a subject of ‘cultural struggle’.

Making Culture a Workable Concept Sensitive to Change Cultural struggle is, to a considerable extent, addressing the institutional setup of a given society. Institutions are heavily infused with culture, and culture shapes institutions. An almost classical definition views institutions as ‘purposive, regulatory and consequently primary cultural configurations, formed unconsciously and/or deliberately, to satisfy individual wants and social needs’ (Hertzler 1946, 4).10 The idea of the ‘cultural loading’ of institutions is largely consistent with Weberian and Durkheimian sociology, which elucidated the morality inherent to institutions. Institutions rely on values, and these have a moral content (van Deth and Scarbrough 1995). This also pertains to the institutional ‘hardware’ of Western society, comprising law, public agencies, and governance bodies. True, it may be argued that social actors, including politicians, deal instrumentally with these values. From their point of view, institutions may just represent a ‘normative content . . . determining individual choice sets’ (Bromley 1989, 57). The fact remains that these actors’ social legitimacy depends on compliance with those codes, rules, and ideologies which are enshrined in particular institutions and often buttressed by mainstream public opinion. It is commonplace sociological wisdom that institutions ensure social stability. Hertzler (1946, 240), in his seminal work on the foundations of institutions, notes the tendency of the latter ‘to become inflexible, survivalistic and formalistic.’ In the same vein, a good deal of social theory suggests a narrow association between the expectation of continuity and the concept of culture (Thompson et al. 1990, 80). However, throughout the twentieth century, sociologists have elaborated on a dynamics fostering or triggering cultural change, including its impact on (formal) institutions. For hermeneutical purposes, a distinction between extrinsic and intrin-

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sic patterns of cultural change is suggested here. Intrinsic change resides in encompassing sociocultural and economic transformations; extrinsic dynamics are those which are produced by purposeful and strategic actions as enacted by influential social forces, including through ideological discourse. Only if the bulk of those addressed by these actions internalize related messages in a consistent way and in the long term do extrinsic factors become intrinsic. Major intrinsic dynamics of cultural change occur with societal modernization. First of all, the latter is seen by many to have laid the foundations for the extension of human rights. As Marshall (1992) argued in his seminal study on citizenship and social classes, Western societies saw remarkable development of their civic foundations, beginning with the establishment of economic and political rights and ending up with the promise of ‘social citizenship’ (see also Rummery 2002, 7–10). Polanyi (1944) had similar dynamics in mind when hinting at the potential of modernity to domesticate the realm of the market economy by institutional means. However, there is debate as to whether these dynamics continue. In particular, the domestication of the market seems to be reaching its limits (Smart 2003). Even as the power of international capitalism has grown, institutional spheres once protected from market forces have become subject to deregulation and ‘market based governance’ (Donahue and Nye 2002). Sociocultural change adds to this. As early as in the 1960s, modernization theory argued that the establishment of an ‘achieving society’ (McClelland 1961) went alongside growing individualism and a drift towards more selfdetermination among the rapidly expanding middle classes. Competitive orientations and the quest for more individual autonomy were seen as two sides of the same coin. In theories addressing the postmaterialist agenda of the late 1970s and 1980s, such orientations were given less emphasis; rather, hedonism and self-realization turned out as the prime references. Be that as it may, there is no doubt about the secular proliferation of values stressing human autonomy and choice (Inglehart and Welzel 2005). This appears to put a strain on the collectivistic norms underlying many of those institutions which were established throughout the twentieth century. This impression is underpinned by scholars arguing that a ‘risk society’ has taken shape from the late twentieth century onwards (Beck 1992; Taylor-Gooby and Zinn 2006). Linked to the afore-sketched approach to reflexive modernity, this approach identifies a new vogue of individualism which follows growing scepticism about collective solutions to major problems of today’s citizens. Basic features of this (alleged) new settlement are an ‘uncertainty over future outcomes and impacts’ and the ‘dissolution of traditional norms and social bonds’ (Kemshall 2002, 5). Established forms of political regulation are called into question, individual risk management is on the rise. Individualism is also fostered through the growing significance of a more strongly culturally inflected service economy, with services involving (more) intensive interpersonal communication and an increasing

90 The Culture of Welfare Markets range of consumer choice. As postmodernists argue, this operates alongside an enhanced role of consumption in the stylization of identity, and, more importantly, with ethical rules being ‘privatized and abandoned to the care of the marketplace’ (Bauman 1995, 5). There is certainly some truth in all this. However, both the narrative of the risk society and postmodernist reasoning tend to overlook that many of the new risks and uncertainties are produced by purposeful action and do not inexorably follow from processes inherent in (post)modernization. This hints at movements of extrinsic cultural change, materializing in strategic actions or communications which do not (yet) correspond to broadly shared (or internalized) cultural references. Such change may, for instance, occur with (de)regulations propagated or enacted by societal elites. A further (potential) case in point is economic forces investing in the ‘cultivation of needs’ with the focus set on new consumer pleasures and advertising and marketing media (Smart 2003, 47). Social power may be involved here as well; indeed, Bauman (1998) sees the new (postmodern) consumer culture as being reproduced through a combination of ‘seduction’ and ‘repression.’ Moreover, there is a huge body of literature which, drawing on Foucault, aims at illustrating how the new agenda of ‘risk taking’ and ‘individual responsibility’ is being discursively propagated and organizationally imposed on various social groups (see, for example, Barry et al. 1996). On the other hand, as noted earlier, ‘cultural resistance’ has not died out, and there are countries and places where the new risks and uncertainties are under critical scrutiny. This challenges an account postulating that a new authoritative ‘governmentality settlement’ is taking shape in Western societies. The fact remains that encompassing cultural change seems under way in Western society, whatever its scope and character. Such change is prone to trigger or foster the recasting of institutions. Given the obvious potential for extrinsic cultural change, this recasting may also create novel worldviews. Long-lasting institutional change may, however, have to be consonant with a deeply-entrenched, intrinsic change in dominant cultural representations. Short-lived political discourse or stylized commercial advertising may not suffice to change culture in a sustainable way—or, in other words, extrinsic cultural change may not be followed by consistent patterns of collective reasoning. This is why investigating processes of public sense-making promises insights into probable avenues to institutional change in the future. Whether or not sustainable cultural change occurs, and the form it takes, is open to empirical investigation. With regard to the subject of this study—namely, the proliferation of welfare markets in old-age provision—a key question is to what extent and with which consequences the risk agenda and other (alleged) symbolic innovations take centre stage in the cultural struggle over ideas and meanings essential to care and pension systems. After all, while raising questions rather than providing ultimate answers to them, the literature reviewed thus far helps build a workable concept of culture which is sensitive to movements of change. With Geertz (1973, 89),

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culture can be defined as ‘an historically transmitted pattern of meanings embodied in symbols, a system of inherited conceptions expressed in symbolic forms by means of which men communicate, perpetuate, and develop their knowledge about and attitudes towards life.’ Rooted in human knowledge, it comprises general cognitive frames within which particular representations, held by specific groups or typical of a given period of time, materialize. Moreover, culture binds people together even if the existence of collective cultural references does not (necessarily) imply high symbolic integration in a given society (Archer 1996, 1–24). For ‘although they are hardly ever constructed under egalitarian conditions, cultural phenomena must in some sense be shared, even if they are contested; they cannot simply be imposed. This is because the realm of meaning is at least dialogical’ (Ray and Sayer 1999, 5). However, interpretations of cultural norms ‘are always incomplete, contingent, and reflexive’ (Geertz 1973, 37). As culture is linked with social and economic structures, it is never immune to recalibration. Archer (1996, 16) rightly notes that modern society always exhibits ‘enough differentiation in the population to make interpretative innovations, to manipulate cultural loopholes, or to exploit inconsistencies.’11 This flexibility of culture also affects the design of institutions. Cultural phenomena include general values which (among other things) confer meaning to the institutional hardware of advanced societies, as institutions are, after all, ‘the embodiment of an idea’ (Hertzler, 1946, 51). At the same time, however, culture, including its institutionalized patterns, is bound up with a ‘struggle over meaning’ (Storey 1996, 3). While adopting the postmodernists’ understanding of culture as containing an infinite repertoire of (moral) ideas would rule out any serious investigation of this struggle, one can draw on postmodernist thinking insofar as the cultural universe of contemporary Western society consists of an ever broader and more dynamic range of different intertextual meanings and allusions, offering (more than ever before) choice of interpretations.12 In other words, cultural struggle grows more important in our times as an increasing leeway is left to individual and collective actors across various societal sectors when it comes to the interpretations of norms within encultured cognitive frames. This also applies to social welfare provision.

The Culture of Welfare Over decades, ‘the study of social policy . . . has paid little attention to the concept of culture’ (Baldock 2000, 122). This is amazing as social policy is strongly infused with ideational references. In particular, the institutional treatment of those considered unproductive or requiring social support— that is, those whose needs risk being ignored by the mainstream of market interactions—became a major moral concern of governments and various collective actors throughout the twentieth century. The provision of social welfare as materializing in public policies certainly goes back to various social

92 The Culture of Welfare Markets factors (labour market development, power structures, vested interests, and the like); yet there are good reasons to assume that these policies correspond to a distinctive culture of welfare. Generally speaking, welfare culture stands for ‘the relevant ideas in a given society surrounding the welfare state and the way it is embedded in society. It comprises the stock of knowledge, values and ideals to which the social actors, the institutions of the welfare state and concrete policy measures refer’ (Pfau-Effinger 2005a, 4). The design of welfare states was from their very beginnings informed by particular notions regarding social justice, gender stereotypes, or the role assigned to the modern individual (Rueschemeyer and Skopcol 1996; Zijderveld 1999, Chamberlayne et al. 1999; Arts and Verburg 2001). These ideas were often influenced by macrocultural factors, in particular religion. Indeed, many have emphasized the influence faith-based worldviews had on the building of distinctive welfare regimes. Following this account, Catholicism bolstered the idea that individuals were deserving of mercy regardless of their personal background; this provided strong support to norms of benevolence, including vis-à-vis strangers, and created fertile grounds for the proliferation of a generalized obligation of ‘helping the poor.’13 Conversely, the Calvinist ethos was found to imply that work was a prerequisite of deserving support from the collectivity (Kahl 2005). The Lutheran heritage favoured poor relief under the reign of public authorities, even as East Asian Confucianism impeded the establishment of an autonomous field for social policies (Rieger and Leibfried 2003).14 Besides Christian doctrines, further strands of political thought have influenced the culture of welfare in modern nations. The Fabian Society in Britain, French solidarisme and German republicanism are among the examples of more secular streams of normative influences. All these influences inform the ‘value choices’ (Titmuss 1974, 136) inherent to the policies of modern welfare states. As these choices are ‘collective phenomena’ (Blekesaune and Quadagno 2003, 415), many social scientists are keen to examine welfare state-related values by survey research (for many, see Borre and Scarborough 1995).15 However, the normative underpinnings of a given welfare state are not necessarily consistent with the ‘mass culture’ of a given society (Baldock 2000). Rather, they materialize in, and become effective through, the ‘institutional hardware’ of welfare states—namely, welfare bureaucracies, funding schemes, juridical codes, and production sites.16 Accordingly, it is the (organized) stakeholders in these institutions who take centre stage in the process underlying the formation of ‘welfare culture(s).’ These stakeholders, interacting with (further) societal elites and gatekeepers of the public sphere (experts, journalists), provide and interpret ideational references when (re)casting welfare state institutions and, more generally, ‘the moral logic of the welfare state’ (Rothstein 1998, 156; emphasis added). True, ‘values that have supported the practices of the welfare state emerged from the moral judgements of ordinary people’

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(Shionoya 2005, 237); but social policy is about institutional responses to societal problems, and this is why the aforementioned stakeholders matter. Yet, what are the ingredients of the moral agenda of Western welfare states? Intuitively, one thinks of elements widely associated with social progress, such as poverty relief; human empowerment; and the promotion of social equity or equal opportunities. Moreover, a clear sign of morality being encapsulated in the welfare state’s institutional setup is the rise of the concept of ‘social citizenship,’ one of the most fundamental expressions of the modern ideal of social welfare (Hewitt 1992, 22). The proliferation of this concept throughout the history of modernity, as demonstrated by the seminal work of Marshall (1992), bears witness to the ‘power of ideas’ behind institutionalized social welfare provision. The moral agenda associated with social policies is broader, though. According to Pfau-Effinger (2005a, 8–9), it embraces the relation to work, assumptions about redistributive justice, understandings of poverty, collective representations of a given welfare mix including the role of the family, and also—this is a crucial point for this study—‘ideas about the state-market relationship.’ Importantly, a given cultural system may embrace ‘divergent or even contradictory values and ideals’ (Pfau-Effinger 2005a, 6). Moreover, moral values may also restrict the scope of institutionalised welfare provision, or route it so as to disempower particular social groups. For example, one key issue in the debate about the moral agenda of welfare states has been the role of stigma in the treatment of welfare recipients (those depending on meanstesting, for example). Furthermore, adopting a Foucauldian lens on culture and its potential function to ensure social discipline, recent work on the issue of governmentality has drawn attention to the potential of welfare bureaucracies to police welfare recipients, especially those belonging to the underclass. Others have argued that recent welfare reform has aimed at implanting particular virtues into the citizenry, such as ‘economic rationality, planning and foresight, prudence and social/moral responsibility’ (Knights 1998, 224, with respect to saving). Such sense-making from above point to extrinsic cultural change as it has been labelled above; the moral agenda is encapsulated in discourses held by opinion leaders or governments—a phenomenon Joseph (1998, 12) terms the ‘politics of culture.’ Drawing on such discourses, most Western welfare states have, for example, invented welfare-to-work programmes, which some comprehend as a foundation of a ‘new culture of social assistance’ (Corbett 2002, 118; see also Levy 2004; Barbier and Ludwig-Mayerhofer 2004). Others observe an international propensity of political elites to eradicate ‘welfare dependency’ and to make citizens ‘active and discerning welfare consumers’ (Mann 2006; see also Baldock 2003a). Further elements in this agenda, largely consistent with what is commonly referred to as a ‘Third Way approach’ to welfare reform, are the ‘promotion of risk taking’ (Kemshall 2002, 31) and the reinterpretation of social citizenship in terms of people being enabled towards self-help and individual enterprise (Harris 1999, 46).

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However, discourses on welfare-state related issues are open to interpretation and resistance. For instance, referring to recent developments in Britain, Newman has stressed the leeway left to ‘managers, professionals, staff, user groups, and others . . . to appropriate parts of Labour’s own discourse in their pursuit of other interests and agendas’ (Newman 2001, 167). Also, social groups may come up with their own way of making sense of transformations in society and in the welfare state. This was, for example, the message of Galbraith (1992), who argued that middle classes benefiting from the welfare state developed a ‘culture of contentment’ which made them defend their own well-being against ideas to help the less well-off, conducive to more taxation. Others have argued that popular culture, that is, attitudes, practices, and feelings taking shape in the microworld of social communities, may have a corrosive influence on the impact of official discourses from above (Joseph 1998); this culture may stimulate citizens to rely on informal solidarities (nondeclared labour, etc.) instead of complying with legal norms. Moreover, social policies may deploy unintended cultural effects. An early version of this argument was provided by Lewis (1966), who made the case for a ‘culture of poverty’ originating in the ‘welfarization’ of underclass populations. The rather multifaceted influence cultural factors exert on the welfare state also is a theme of theories concerned with problems of legitimacy (Offe 1987). For instance, once benefits are defined as rights, it becomes difficult to revoke them—even when these rights come to sit uncomfortably with what the economic system or elites governing this system require. From this perspective, extrinsic cultural change may prove ephemeral. In the recent past, however, a range of scholars has alluded to more instrinsic evolutions towards a new culture of welfare. To begin with, there has been a revitalization of the concept of ‘moral hazard’ which suggests that (ever more) socially unbound individuals purposefully exploit the solidarity of the collectivity by claiming benefits instead of fulfilling their personal duties as citizens (prevention of illness, professional work, family support, and so forth) (see, for instance, Zijderveld 1999). Others have alluded to more encompassing changes in the culture of welfare as emanating from rising individualism in contemporary Western societies. Mainstream individuals, so the narrative goes, ‘have come to see a portfolio of property rights and command over their own earnings as better shields against exploitation and oppression than claims on the state’ (Jordan 2006, 145). In an age of growing uncertainty, with shrinking reliability of established institutions (including welfare state institutions) and an increasing set of life options, individuals are assumed to adhere to a morality of self-reliance and personal choice (Nettleton and Burrows 1998; Beck and Beck-Gernsheim 2002). This, to an extent, fits postmodern approaches to welfare state change (Leonard 1997). These approaches postulate the formation of a universe constituted by increasingly varied systems of representation of what are feasible and valuable

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modes of providing and consuming social welfare, which the individual has to negotiate. Such accounts appear to endorse intrinsic cultural dynamics as driving forces of change. Some scholars imply that these dynamics intersect with extrinsic processes. It is argued, for instance, that the aforementioned developments stem from changing representations of the (productive) relationship between the economic system and the moral foundations of the welfare state. Proponents of this account discern change in the judgements relating to social-welfare provision which gravitate ‘from essentially moral ones (i.e. it is morally right to provide the service) to economic ones,’ with value und utility being measured ‘in terms of price and outcome, not in terms of social justice or moral purpose’ (Kemshall 2002, 26). Others contend that this goes alongside a surrender of public responsibility and a ‘new cultural power of business’ (Gilbert 2002, 5). Welfare reform throughout the Western world has indeed pursued the aim of transforming ‘the spendthrift culture of the old-style bureau-political regime into a leaner, meaner managerial system,’ as Jordan (2004, 86) has put it for the case of Britain. This has led to ‘a new workplace culture’ (Langan 2000, 159) in welfare bureaucracies and to the rise of what Clarke and Newman (1997) have termed ‘new managerialism.’ Cost-efficiency, value for money, benchmarking, and competitive governance are seen as forming a novel ‘value set’ for the management of social welfare. This is also reflected by the new ‘enterprise culture’ proliferating in social work (Cannan 1995; Harris 2003). Altogether, it appears highly plausible that it is by the complex interplay between extrinsic and intrinsic dynamics of change that welfare culture develops. Obviously, the economic system (including its political regulation) and the sociocultural foundations characteristic of Western societies are coevolving. It is in the tension between the democratic state, an increasingly unleashed capitalist economy and a ‘culture of individualism’ (Smart 2003, 11) that new discourses and agendas find fertile grounds. Importantly, the room available for negotiating welfare state designs has expanded, and relating cultural representations may develop or persist independently of mainstream agendas. Moreover, given the symbolic power of institutions and the collective memory of welfare state citizens, it is unlikely that the culture of welfare as established throughout the twentieth century will vanish from tip to toe with (creeping) sociocultural evolution and economic pressures. Societal elites in favour of a new welfare culture will, to an extent, have to cope with the continuing and far-reaching popular support for present-day welfare state institutions (and the norms these institutions embody), confirmed by recent survey research (see, for example, Mau 2003; Blekesaune and Quadagno 2003; Taylor-Gooby 2004). Against this background, the culture of welfare remains ever more subject to a ‘struggle for interpretation’ (Pfau-Effinger 2005a, 13). Even though cultural patterns are interrelated with economic interests and social (power) structures, the architecture of welfare states will continue to depend largely

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on which interpretations of norms will prevail in the process of collective sense-making. New ideas may challenge older ones, and at times, they may come from outside a national settlement. Yet these ideas will always be valued against the cultural heritage of a given welfare state.

National Cultures Regarding welfare systems, the much-cited study by Esping-Andersen (1990) has shed light on the variety of national approaches throughout the Western world. His study made the case for different ‘worlds of welfare capitalism,’ or ‘welfare regimes’ exhibiting varying roles conferred to families, the market, ‘social partners’ and the state. The rich comparative work following Esping-Andersen, though offering different stories, has further deepened the understanding of cultural differences between welfare regimes (see, for example, Goodin et al. 1999, or Arts and Gelissen 2002).17 For instance, one factor referred to was international variety in the role of religion and the relationship between the Churches and the state (Kersbergen 1995). This connects with the findings of studies on political culture. According to the seminal work of Almond and Verba (1996), political systems are embedded in distinct collective orientations towards political institutions; these orientations give coherence to the entire political system and are grounded in a society’s social life. Notwithstanding the pitfalls of studies based on a small number of variables, this work has plainly elucidated the role national culture(s) play for a given jurisdiction.18 From a sociological point of view, one may argue that countries as such are not clear-cut categories for mapping cultural clusters, that is, sets of values and representations typical of distinct groups of citizen. However, a couple of studies have exposed that cultures do, above all, take shape at the level of nations. Hofstede (2001) has developed a model of ‚national cultures‘ characterized, inter alia, by different ways of handling social inequality, of dealing with authority, of perceiving relations between individuals and groups, and of managing uncertainty (see Hofstede, 29). In the same vein, Coughlin (1979) has argued that entire societies are dominated by mass ideologies, with a collectivistic pattern prevailing in continental Europe and an individualistic version being typical of the United States. These mass ideologies do generate national avenues of collective sense-making. What is more, collective forms of sense-making are bolstered by institutions which, concerning social welfare provision, are mostly established at national level. It is not difficult to show that the institutional setup of, say, the Anglo-American way of providing social welfare is grounded in ideas and concepts that differ from those prevailing in continental European welfare states.19 For instance, the protection of achieved social positions is a major characteristic of social-insurance-based welfare regimes, whereas social protection in the Anglo-American world is much more focused on supporting the deserving poor. Making social risks manageable over the life

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course by means of a redistributive collective insurance scheme does not sit comfortably with a culture shaped by economic liberalism (although the United States has developed a social security scheme for pensions). Conversely, the traditional American way of providing social welfare embraces high expectations on both charitable initiative and corporate responsibility for protecting workers (Levine 2001; Dobbin 2002) whereas such expectations are much less prominent in continental Europe. Cultural particularities at national level also materialize in different organizational landscapes. For instance, independent charities are big policy players in the Anglo-American world, but continental Europe exhibits the particularity of large quangos entrusted with the management of social-insurance schemes, with employer organizations and unions assuming not only administrative responsibility but also considerable political influence (see Bode 2003b, for the case of Germany). As the institutional setup of social welfare provision is nationally coloured, there is considerable scientific interest in comparing cultures of welfare between countries. The sustainability of cultural differences is subject to debate, though. The bedrock question is whether globalization does, or will in the near future, make cultural variation disappear (see, for example, Axtmann 1997). Indeed, many argue that ‘the traditional civilizations and nations are under growing pressure from various processes which diminish the relevance of cultures’ (Lane and Ersson 2005, 6). According to Meyer et al. (1994), a key driving force in this direction is the international proliferation of rationalized world views (in the sense of Max Weber). Others assume that national legacies will continue to operate since existing institutions pave themselves the way they are evolving. This assumption is held by what has become known under the label of ‘historical institutionalism’ (Thelen 1999). It is also an implicit foundation of current welfare regime typologies, according to which path dependency (in the development of public infrastructures, for example) will prevail over pressures for institutional harmonization. Regarding the subject of this book, it remains to be seen whether a transnational ‘culture of welfare markets’ has taken shape over the last years, or whether it makes sense to speak of varying ‘cultures of market welfare’ proliferating in the Western world. The Culture of the Market Markets are core institutions of Western societies; yet their social nature is too often ignored. ‘In most economic literature, the market assumes a deinstitutionalized form, as if it was the universal ether of all human interactions. It is assumed that when people get together in the name of selfinterest, then a market somehow always emerges in their midst’ (Abolafia 2005, IX). From this perspective, markets exist and function in a culturefree universe. They are about buying and selling, abstract price-making, and competition, with the participants’ self-interest in pursuit of material rewards and personal satisfactions as a key driving force. There seems to be

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some truth in this conceptualization. Operating in markets leads people to ignore prejudices against particular persons. Market-oriented human behaviour is guided by abstract symbols, such as prices. Social interaction often proceeds through one-stop encounters for exchanging goods and money. Within organizations busy in markets, moral questions seem to be ‘given short shrift in advance,’ not least because ‘there is no greater crime in the business world than the “underuse” of resources, letting some assets which “could” work and “bring results” lie fallow and rust’ (Bauman 1995, 262). Under these conditions, economic agency is released from concerns about what is a human right, the authenticity of expressed preferences, or external effects causing harm to third parties. And still, in various senses, there is a ‘culture of the market’ (Smart 2003, 80). First of all, market action relies on a ‘knowledge-creating and knowledgediffusing mechanism’ (Mantzavinos 2001, 164). In that basic sense, market action is encultured. People do expect distinct forms of behaviour and communication, and discard others, when participating in the market game. The functioning of a market depends on reflective views about what co-actors will do and what they will deem inappropriate—and this, after all, appears indispensable as ‘the ability to buy and sell freely creates a kind of social chaos ( . . . ). In the face of this chaos, self-interested actors propose to stabilize interactions by creating cultural understandings for themselves and others, and social links to one another’ (Fligstein 2001, 21).20 Thus, market relations are ‘embedded in webs of shared meaning that both constitute those relations and regulate them’ (Abolafia 2005, XIV, emphasis added). Moreover, the preferences expressed, the products traded, or the marketing practices21 developed all have a cultural loading in the sense that they are entrenched in distinctive values and customs. Seen in this light, economic structures arise from cultural phenomena inasmuch as the organization of economic life may influence culture. Correspondingly, to assert that markets are amoral in their very nature would be misleading (O’Neill 1998). Rather, markets are predicated upon particular shared moral assumptions; one can even make out a ‘moral property of markets’ (Shionoya 2005, 134). This moral property is, to some extent, in line with references originating in the Enlightenment project. Thus, the value of freedom and virtues such as diligence and prudence are often viewed as being fostered by modern market economies and as exemplifying ‘“civilizing effects” of market relations’ (Ray and Sayer 1999, 10). As already Weber (1978) had noted, the market knows no personal distinction. It tends to sidestep any existing status differences or value judgement relating to market participants—it ‘does not recognize ranks’ (Bauman 1990, 211). It even helps people moulding their personal material world—provided sufficient money is available and the desired items are on offer. In this sense, the market is a constitutive element of the culture of modernity.22 Furthermore, market transactions are often deployed within a cognitive frame based on moral rules, for example, the norm of trustworthiness. This norm may become a property accredited to a market actor who then

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enjoys a particular reputation. Under conditions of market-endemic uncertainty, this reputation provides orientation and may even end up in a fixed status order in which distinctive market actors are assigned a long-term social standing (Podolny 1993). Last but not least, moral considerations may themselves become subject to market agency, with the most obvious case being philanthropic organizations campaigning for donations. Competition here is influenced by perceptions on the perceived ‘moral character’ of these organizations.23 Having said all this, markets obviously have their moral downsides. Many values ‘people consider desirable for their well-being do not necessarily prosper in the market; indeed, the market is likely to destroy them’ (Shionoya 2005, 160). Thus, social arrangements relying on generalized reciprocity are barely compatible with market exchange based on calculations of measurable (individual) payoff. As markets are ‘the very exemplification’ of instrumental rationality (Weber 1978, 635), key elements endemic to innate human relations are frequently cut off from market-oriented agency. Shirking, misusing an information edge, playing with human feelings, or ignoring the social consequences of radical profit-seeking—all are strategies the market abets. And with these properties, ‘the market does not know how to restrain itself. Sources of restraint must originate elsewhere’ (Kuttner 1998, 57). Some of these destructive forces are tamed by generic social norms; others are tackled by deliberate (public) interventions. The culture of markets is indeed shaped by various informal and formal regulations meant to civilize the market game from outside. This is what economic sociologists refer to as the multifaceted embeddedness of markets. The concept goes back to Durkheim (1984), who stressed the importance of ‘non-contractual shared moral understandings’ informing market contracts. It also draws on Weber (1978), who saw market interactions enmeshed in a framework of rational legality and inviolable agreements, based on tradition, convention, and law. The message from the classics then is that markets operate via ‘shared expectations as well as the more explicit rules encoded in . . . legal structures’ (Slater and Tonkiss 2001, 108). This also matters regarding the array of items and actors inhabiting a market, because ‘what will survive in the process of the competitive struggle in a market crucially depends on the social institutions that constrain this market’ (Mantzavinos 2001, 167). The institutionalization of markets differs between societal sectors. As proponents of the new institutionalism in organization study argue, particular norm sets constitute organizational fields protected by impermeable boundaries from other societal sectors. Distinctive rules of exchange, specific informal and formal regulations, and a particular understanding of appropriate social practice settle in these fields which, in turn, tend to become ever more homogenous through isomorphistic pressures (DiMaggio and Powell 1983). These pressures may stem from professional groups or from political forces; they are prone to entail cultural homogeneity within classes of organizations.

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In addition, the institutionalization of a market is often driven by ‘public deliberation and education’ (O’Neill 1998, 48, see also Keat 1999). In a nutshell, markets are culturally and morally fashioned; their outcomes ‘can vary dramatically even for the same economic problems and technologies, if the social structure, institutional history, and collective action are different’ (Granovetter 1990, 106). Having said this, there are good reasons to assume that markets have expansionist tendencies; or put more bluntly, ‘the culture of the market respects no boundaries’ (Smart 2003, 113). This is a key theme in Marxist theory but also follows from Weber’s thesis on the triumphant progress of instrumental rationality across the Western world, pushed by the dynamics of bureaucracy. Such forecasts are consonant with the current proliferation of a highly economized day-to-day culture ‘in which emphasis is placed on the calculating, rational, self-interested subject and a commercialized competitive individualism’ (Smart 2003, 7). The marketization of social welfare provision, delineated in chapter 2 and explored in greater depth below, is but one example of these expansionist tendencies. It appears that ‘marketization spreads through inventive ways of commodifying things that are not normally viewed as alienable . . . , and by transforming into saleable objects social phenomena which were not previously framed in that manner’ (Slater and Tonkiss 2001, 24). One crucial feature of this process is the development of an ever wider ranging consumer culture. However, one should consider both sides of the story. All that has been said on culture in the preceding sections applies to market (institutions) as well. The apparently ever wider and deeper encroachment of the market sphere does not exclude, and may even provoke, the issue of market embeddedness becoming subject to cultural struggle and subsequent intensive negotiations in the public sphere. As the formation and functioning of modern markets is—in various ways and to a varying extent—predicated on market-embedding frameworks, it stands to reason that those spheres which get infused with the market rationale are prone to become embedded in their own normative frameworks, with the possible result of market transactions being restrained or channelled in a particular way. It may equally be the case that the moral property assigned to markets comes into play in novel ways when the market rationale extends into spheres previously sheltered from it. The consumer culture is a good example, since the culture of the market postulates the ‘equality of consumers, in their capacity as free choosers who themselves determine their social standing’ (Bauman 1990, 210). Freedom of choice thus may under certain circumstances turn out to be an avenue to personal empowerment. At least, this was the chief argument advanced by those who advocated and introduced quasi markets in welfare systems. While the ambivalence of the new consumer culture in social welfare provision has become a (novel) theme of social enquiry (see chapter 2), we still lack a more encompassing approach to the analysis of how the

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organizational fields (now) exposed to the market rationale are culturally embedded.

4.2 THE CASE OF OLD-AGE PROVISION This study considers two (organizational) fields of old-age provision: pensions and elderly care. Retirement income is a basic element of old-agerelated social security; the field of elderly care covers a broader set of aspects relevant to the well-being of the elderly, with personal (sociogerontological) care and paramedical services (nursing) forming its core. Addressing both retirement provision and elderly care therefore provides an encompassing perspective on how societies organize themselves in order to cope with biometrical social risks, that is, with the fact that its members become physically and/or economically dependent on others towards the last stage of their life. With this twin focus, this section links issues relevant to the culture of oldage provision, on the one hand, with a reflection about tendencies of marketization in and around that culture, on the other. In particular, it charts a picture of what is termed here the collectivistic model of old-age provision, crystallizing in the second half of the twentieth century; it also briefly discusses recent developments calling this model into question. Moreover, a metaconcept, the moral economy approach, is delineated and provides the theoretical context within which the analytical framework to be used for the empirical analysis of welfare markets will have to be developed (in the subsequent section).

The Age of Collectivism Up to the end of the twentieth century, a prime tendency of societal modernization was to treat old age as a collective social phenomenon. Prior to the industrial epoch, care of inactive elderly people had been incumbent upon families, charities, and workhouses. With ongoing modernization, biometrical risks successively became viewed as a predicament to be dealt with by society as a whole. Individuals were increasingly exempted from obligations to personally prearrange the circumstances of their later life. Although this certainly did not imply equal wealth for all senior citizens, old age became conceived of as a social condition and therefore requiring some pattern of uniform collective treatment. The consequences of ageing were (partially) socialized, and retirement became a taken-for-granted stage in one’s life course (Vincent 2003). Accordingly, old-age provision was conceived of ‘as an organizational problem for society’ (Victor 2005, 14). Critics have argued that this went alongside what has been labeled a welfarization of old age; they have hinted at an entire ‘history of efforts to control, supervise, and regulate older people’ (Powell 2001, 118), especially through professional social work. The potential for paternalism inherent to

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the collectivization of old-age provision can hardly be denied. It is fair to say, however, that the process of modernization also created a ‘new identity for older people built around the rights of citizenship associated with the institutional developments that accompanied the rise of the welfare state’ (Estes et al. 2003, 11). In particular, the experience of ageing was moulded by a ‘mass transition into retirement, collectively understood and embedded in formal, institutionalised arrangements’ (Vickerstaff and Cox 2005, 91). Staying inactive during the twilight years became acknowledged as an ordinary stage of life, a process perfectly epitomized by what Myles (2002, 130) has termed the ‘democratization of retirement.’ Western societies assigned older people a distinctive social status, with the welfare state as a major regulator of this status. In that sense, collectivism proved fundamental to the rationalization of old-age provision up to the late twentieth century. This is most obvious for pension systems. As Myles (1984, 1) long ago rightly argued, ‘state responsibility for the elderly’ became a ‘taken-forgranted part of everyday life.’ Retirement provision was—to a varying degree, it is true—seen as being subject to national regulation and redistributive policies. Many pension systems aimed at making older generations participate in the growth of a nation’s prosperity. Initially targeting selected groups, such as industrial workers, civil servants, or soldiers, they were extended to further sections of the population consecutively. Care systems underwent a similar, albeit less encompassing, development towards collectivism. During the twentieth century, most Western societies saw the rise of public services provided to the frail elderly, together with an inbuilt tendency towards professional diversification (see, for example, Victor 2005, 300–326). The proliferation of these services embraced residential care in the first instance; further modes of formal assistance added to this later on, including at the senior elderly persons’ home. Importantly, in most countries the aforementioned social status assigned to ‘modern’ seniors was further formalized by the (albeit often inconsistent) amalgamation of age- and health-related programmes under the label of elderly care. Having said this, there appears to be an important difference between income support and social care (or nursing). The provision of formal elderly care touches upon the personal sphere of the recipient and intimate social practices. As Anttonen et al. (2003, 183) have noted, ‘take-up of publicly provided or publicly funded social care services is accompanied by complex constructions of status and stigma,’ especially in the field of home care. Moreover, elderly care is embedded in a ‘complex mixture of social obligations . . . which govern the provision and receipt of care and assistance within and between family members’ (Victor 2005, 272). Also, personal care historically emanated from charities and municipal welfare, both of which were deeply infused with paternalistic attitudes. This paternalism was increasingly contested; yet as both charitable and municipal agency remained highly relevant to care systems throughout the twentieth century,

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the rationalization of social assistance through formal care was a less consistent tendency internationally. Nonetheless, major Western countries saw a ‘process of social care “going public”’ over this period of time, with many ‘services becoming available simply on the basis of individual citizenship’ (Anttonen et al. 2003, 171).24 Formal elderly care suffered from poor quality and undersupply in many places, but the tendency towards collectivism was undeniable, whatever the mode of organization prevailing in a given society. The ramifications of the collectivistic model were manifold. In contrast to past times, growing old as such no longer entailed a sharp plunge in the social status order, at least regarding the overwhelming majority of the (previously) salaried male workforce enrolled with public retirement schemes. This also affected cohorts covered by (final salary) occupational pension plans, very prominent in the Anglo-Saxon world. In some way, these plans represented a radicalized version of collectivistic retirement provision, as they guaranteed pensions based on the last stage of one’s career ladder—which for many of those belonging to the postwar workforce proved unidirectional. The prevention of extreme impoverishment was also due to the spread of minimum income provision, constitutive of state basic pension regimes but introduced as well in systems relying on contributive and earning-related schemes.25 Importantly, the overall model, though not covering the entire population, left but little scope for market capitalism to penetrate pension and care systems. To be sure, there is evidence that in Anglo-Saxon countries inequalities experienced during the life course were (and still are) ‘reflected in greater measure in an unequal old age’ (Vincent 2005, 585). This contrasts with socialinsurance-based pension systems where income differences between social groups were (slightly) reduced with the transition into retirement; pensions were calculated on one’s best years at a job and awarded credits for periods of unemployment, family care, professional education, or personal hardship.26 Altogether, one can say that while postwar Western retirement systems provided income security to most senior citizens, they preserved the social status as existing prior to retirement. In most countries, old age poverty fell considerably. As for care provision, growing old and frail often brought about a decline in one’s relative position in the overall income hierarchy. Yet many health and elderly care systems exhibited a tendency to charge the collectivity with the expenses incurring as a consequence of frailty. The instigation of municipal (public) care centres, of social service departments, and (later on) of national care allowances or longterm care insurance were strong signs in that direction. Together with this, there was a growing concern for professionalism in elderly care provision. In the postwar settlement, then, the energy household fuelling the development of care systems was nurtured by a collectivistic culture as well. It should be noted, however, that the age of collectivism was associated with a wide gender gap. This firstly pertains to retirement schemes, as women taking child- and elderly care responsibilities were widely excluded from

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full pension provision, with many of them depending on their husband’s or a widow’s pension (Ginn 2003). Secondly, depending on the ‘cultural images of care’ (Hochschild 1995, 338) and the ‘family culture’ (Pfau-Effinger 2005b) prevailing in a social class or throughout a whole nation, private households were only partially relieved from the care burden by institutionalized support schemes. Though collectivistic in many respects, systems of old-age provision left considerable responsibility, and corresponding material hardship, with women. In the remainder of this chapter, this particular dimension of the culture of old-age provision will (have to) be neglected as the emphasis lies on formally institutionalized patterns of old-age provision and on the (nowadays) dominant life course model based on long-term salaried work. Multiple Changes in the Culture of Old-Age Provision Major strands of current social theory and gerontology contend that considerable change is under way regarding how society is dealing with old age. A good deal of the phenomena under debate concern care and pension issues; many others, though linked to these issues in one way or another, are beyond the scope of this study. A quick foray into current ways of reasoning about the overall dynamics of ageing indicates an erosion of collectivism; concomitantly, it shows a puzzling tension between (seemingly) inconsistent diagnoses. On the one hand, there is ageism. Many argue that today’s ageing society seems to have put a strain on the ‘moral space which can resonate with the rights and needs of older people as a group’ (Phillipson 1998, 49). It is observed that, against the background of an ‘apocalyptic demography’ (Robertson 1997), major opinion leaders ‘describe the social condition of older people as a “burden”’ (Powell 2001, 118). Some even note tendencies towards an ‘ageist oppression’ as older people become identified ‘as a drain upon [the available] social resources’ of a given society (Estes et al. 2003, 29–30). On the other hand, new ‘models of the Third Age’ (Vincent 2005, 585) proliferate, with ‘ageing identity . . . becoming increasingly freed from the life stages and expectations formerly used to structure the process of adult ageing’ (Estes et al. 2003, 36). The narrative of ‘productive ageing’ (Hinterlong et al. 2001), further the assertion that contemporary older generations define themselves through consumption rather than a reference to their (past) working life (Featherstone and Hepworth 1998), and, finally, the discovery of older people as citizens ‘speaking for themselves’ (Walker 1998)—that is, ready to form social movements on their own behalf—all present a picture fairly different from what proponents of the ageism thesis contend. It is true that this double diagnosis appears less puzzling when regarding social divisions in the day-to-day social practice of senior citizens. For it may well be the case that the not-so-affluent elderly find themselves insecure and under pressure while their prosperous counterparts consume a broad array of goods and services and benefit from new opportunities including voicing their

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own concerns more actively (Powlika 2000). With regard to the culture of welfare, however, the overall configuration remains ambivalent. As argued earlier, cultural representations, though often being under controversial debate, carry a universal message internalized by major collective actors and encapsulated in national institutions. Thus, if there is both a devaluation of old age and rising individualism—or, as Robertson (1997, 436) has put it, a growing ‘symbolic power of the rhetoric of independence’—then clashing pictures of old age manifestly coexist as collective representations in contemporary society. It appears that the culture of old-age provision, while departing from collectivism, develops incoherently.27 In particular, collectivism and individualism get (re)mixed in complex ways. As set out at length in chapter 3, the retirement (provision) becomes subject to choice, personal planning, and self-management. Senior citizens face an ‘individualisation of retirement experiences’ (Vickerstaff and Cox 2005) and a ‘privatization of mandatory retirement income protection’ (Hyde et al. 2006). Given the ‘public erosion of retirement income’ (Gilbert 2002, 103), collective provision is being curtailed, sometimes substantially. Some have seen here the decay of the old generational contract, together with ‘a loss of legitimacy for arguments based on social need’ (Estes et al. 2003, 74). However, as public pensions are still the dominant mode of retirement provision in many countries, retirement systems appear to be remixed rather than privatized. It is often assumed that the so-called baby-boomers form a cohort aspiring to a whole range of generation-specific goods as well as consumer-tailored services and facilities. Following this movement, new public policies of empowerment have been proposed to older people in need of care services. Initiatives encouraging partnership with older service users imply a ‘changing culture of care in personal services’ (Evers 1997). Institutions are refashioned so as to ‘transform the meaning of ageing in this sphere from its association with passivity and dependency to one concerned with activity and interdependence‘ (Walker 2000, 307). This empowerment is backed by both the promise of publicly supported provision in the ‘community’ and by the vision of more ‘self-care’ (Kemshall 2002, 67; see also Ascoli and Ranci 2002). Moreover, the now widespread managerialist understanding of the respective roles of welfare bureaucracies and welfare recipients is said to exhibit an inbuilt tendency to rationalize care provision, with case managers ‘monitoring, assessing, and calculating older people’ (Powell and Biggs 2000, 10). The new configuration appears to entail the ‘simultaneous encouragement of consumerism and dependency’ (Powell 2001, 129; see also Clarke 2006). All in all then, the literature suggests that changes in the culture of old-age provision adopt a multifaceted, and often ambiguous, character.

The Culture of Markets in Old-Age Provision While the afore-sketched multiple dynamics of change suggest the simultaneity of seemingly incoherent developments, most of the latter operate

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alongside a new culture of the market infusing formal patterns of social support and income provision for the elderly. Internationally, the recasting of care systems, for instance, has often been predicated on ‘the promise of greater choice and autonomy for both welfare workers and service users through the introduction of market ethos into areas traditionally directly controlled and subsidized by central government’ (Powell and Biggs 2000, 4). In many Western pension systems, moreover, public pillars or final-salary occupational schemes are dwindling, and there is new a ‘pension individualism’ materializing in a boom of (stock- or insurance) market-based saving schemes, or, to put this another way, a new ‘cultural (political) economy’ of pensions (Langley 2004, 554). Taking up the argumentation advanced in the previous section, the culture of welfare markets must be inspected from two different sides, though. Although norms and values centring on free economic agency, consumer choice, and flexible management are all key ingredients of the market culture spreading over old-age provision, one also has to account for the embeddedness of the (new or newly stimulated) market transactions. Contemporary Western societies indeed ‘struggle’ with the assigned role of the market when it comes to the organization of old-age provision. As noted in chapter 3, the culture of the market has provoked, throughout the countries reviewed, a number of public concerns which in turn have brought the issue of market regulations repeatedly (back) to the fore. The evidence is telling. With regard to retirement provision, Britain has seen a remarkable decline of trust in the private-pension sector over the last decade. This has led the government to introduce new regulations and watchdogs, the impact of which, however, has been regarded sceptically by many. In Germany, the instigation of a second, fully funded tier in the pension system did not produce the desired results in terms of people being covered; therefore the initial reform rapidly became subject to public debate and regulatory revisions. In France, important social movements were counteracting pension reforms which tended to strengthen the significance of private pension provision. Interestingly, however, French trade unions have become eager to certify ethical saving funds, thus paving the way for a politically controlled transition to a more privately funded pension system. Canada has seen a vigorous pension debate in the 1990s followed by significant efforts to consolidate the public-pension sector; at the same time, discomfort has been expressed about occupational retirement plans being transformed little by little into defined contribution schemes, which left workers with the risk of losing pension entitlements. Similar tendencies have surfaced in care systems. Here as well, the culture of the market as exemplified by the rise of references such as consumer choice or ‘value for money’–purchase has gained momentum (Ascoli and Ranci 2002; Leichsenring 2004). Both the proliferation of private care insurance,28 and the transnational rise of what has been referred to as ‘care managerialism’ (Powell and Biggs 2000, 5)—that is, welfare bureaucracies involved in

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a purchaser–provider split—are strong signs towards the extension of the market rationale into publicly regulated elderly care. Although public bodies are still keen to manage care systems in most advanced Western nations, services have widely been out-contracted and are nowadays often being provided in a competitive landscape of care agencies. In Germany, Britain and some parts of Canada, for-profit firms have grown important as mainstream suppliers. To this, add the proliferation of direct payments.29 As a result, and across borders, it is now family, the state, and the market from which the normative references governing elderly care are derived.30 Again, however, the issue of market regulation deserves particular attention. Britain, for instance, has seen vigorous attempts to better inspect the quality as delivered by care providers, including by setting up new regulatory agencies. In Germany, the state has taken initiatives to improve the coordination of a highly dispersed (and competitive) service supply. In parts of Canada, there were harsh critique and subsequent regulatory revisions of the quasi-market regime underlying home care provision. With regard to France, the high number of old people dying during the unusually hot summer of 2003 engendered vivid discussions about the (allegedly) poor quality of the care system, with a series of statutory programmes aimed at improving service provision as a result. Altogether, then, the commercialization of care systems was paralleled by intense regulation. Thus, the culture of the market as taking shape in systems of old-age provision appears as a many-sided phenomenon. Often going alongside welfare state retrenchment, institutional change may also occur without any reduction in the amount of public resources outlaid for cash and services. Simply, the character of resource throughput may evolve, for example with major stakeholders welcoming tax revenue being poured into (subsidized) private saving rather than into collective retirement provision. Granted, the mainstream mantra of market economics stipulates that ‘services should be cut where they become a drain on the competitiveness of national capitalist systems’ (Estes et al. 2003, 87). Yet the extension of the market culture into welfare provision has further, and sometimes contradictory, implications. It goes alongside new sets of meaning conferred upon the design of old-age provision (by stressing the magnitude of personal involvement, for example), and it embraces questions concerning how to regulate, or to put it more sociologically, to embed market transactions where social security and decent care are directly at issue. The challenge, then, is to understand the logic inherent to this multifaceted process; for this logic to become accessible, a theoretical metaconcept is needed. A Moral Economy Approach One influential approach to study the cultural embeddedness of old-age provision is the concept of moral economy (Minkler and Cole 1981; Kohli 1987; Robertson 1997; Mau 2003; Estes et al. 2003; Béland and Myles

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2005). This approach has sometimes been used to discern the general moral dimensions essential to the societal treatment of old age, with the principal interest revolving around ‘generational concerns’ and relating ‘matters of obligation, interdependence, and reciprocity’ (Gordon and Longino 2000, 700). Elsewhere, the approach was employed to elucidate particular aspects of the societal organization of ageing, especially the issue of retirement provision. For this study, it appears useful as a metaconcept informing the analytical framework to be employed for the investigation on sense-making related to care and pension systems. The notion of moral economy draws on the works of Polanyi (1944) and Thompson (1971). Polanyi employed it to display the moral embeddedness of (traditional) economies as opposed to an increasingly and alienating economic system characterizing advanced modernity. Thompson, taking the example of food riots in the eighteenth century, argued that social action motivated by economic considerations can be driven by moral feelings blaming unfair behaviour. Economic agents, so the argument went, resorted to beliefs about what were acceptable and unreasonable forms of economic action, based on some sense of what individuals owe to the collectivities they belong to. Subsequently, the concept of moral economy was taken up by various studies; most of them were addressing norms and sentiments with regard to the social allocation of rights and responsibilities of individuals and institutions with respect to others (Sayer 2000). Proponents of this concept posit that any economic order is unavoidably embedded in a set of (possibly inconsistent) moral references.31 Basically, they are interested in the distinctive normative frameworks which various collective actors actualize when handling market-based and nonmarketbased transactions. Applied to elderly care and pensions, it is easy to see that the moral character of old-age provision is paramount in the public debate surrounding norms such as ‘intergenerational fairness, intragenerational solidarity and gender equality’ (Myles 2002, 134).32 Current systems of old-age provision are indeed clearly shaped by norms concerning who deserves what, which kind of need should entitle a person to free support,33 or up to which point there should be a guarantee of the quantity or quality of public investments into the citizen’s well-being. It appears crucial that both pension and care systems rest on economic transactions putting these norms into practice. The concept of moral economy accounts for the fundamental material interdependence between human beings over their life course. It places economic transactions between active and inactive sections of the population into a social context transcending the confines of mere market exchange. It is in this sense that the concept is referred to when scholars note the ‘privatization of responsibility’ (Rodger 2000, 3) for social welfare provision, or hint at attempts to provide legitimacy to revisions in the institutional setup of pension systems against the background of widely held notions of justice or fairness (Béland and Myles 2005).

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Employing the concept of moral economy implies that transactions in organizational fields of old-age provision are understood not just as an epiphenomenon of existing economic constraints or power structures— although these constraints and structures do impact on them. Rather, the concept emphasizes that all economic (trans)actions are encultured. Langley (2004, 541), for instance, is right when stating that the ‘cultural making of financialised capitalism’—which he argues proves the main trigger of marketized pension provision—is not only derived from mainstream academic economics, but also ‘includes the theory and practice of . . . management, accounting, advertising, marketing and insurance.’ Accordingly, retirement provision by the market is infiltrated by ideas (and corresponding symbols) about how to manage it appropriately. While taking hard economic facts into account, then, a moral economy approach to old-age provision would ‘reject the sole determinacy of economics’ (Estes et al. 2003, 21) and draw attention not only to the social construction of marketized welfare provision but also to the utmost importance of the normative universe whereby meaning is conferred upon economic transactions processed in a welfare state. In that sense, the welfare state as a whole should be conceived of as a (key) element of moral economy (Sayer 2000, 80). Social law, welfare schemes, and public administration can all indeed be viewed as composing ‘the institutional frame of the specific moral economy of modern market societies’ (Leitner and Lessenich 2003, 328). The moral quality of welfare states is at issue in many ways. Concerning the elderly, it may embrace the assignment of stigma, the ascription of a distinct recipient status, or earmarked rights to social citizenship (Anttonen et al. 2003, 167). It may also materialize in a particular rhetoric such as the afore-sketched narrative of ‘productive ageing’ which Estes et al. (2003, 72) deem ‘a child of the neoliberal moral economy of the Thatcher-Reagan years.’ As for pension and care systems and their creeping commercialization, the relevant moral dimensions are multifaceted, too. The new cultural patterns may well endorse the ‘development of agebased market structures’ (Gordon and Longino 2000, 702). At the same time, however, these structures are affected by the particular moral codes embedding the enacted commercial transactions, with the emergence of welfare markets as a result. The advantage of the moral economy concept is that it allows the focus to be set on the noneconomic underpinnings of these markets, and, more precisely, the way social meaning is conferred upon processes of both marketization and market regulation.

4.3 KEY MORAL ISSUES IN PENSION AND CARE SYSTEMS The rise of welfare markets challenges accustomed ways of understanding systems of old-age provision. As will be shown in what follows, pension and care systems were embedded in a distinctive ‘moral economy’ during

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the postwar settlement. With the diffusion of the market rationale into systems of social welfare provision, a recalibration of this settlement is likely to occur. Yet which is the new scenario, given the ambiguities discussed in the previous sections? And which are the lenses suitable for capturing it? At face value, the new settlement presents clear-cut characteristics. Exposed to the turbulences of financial markets, retirement provision (beyond minimum pensions) can no longer be understood as a guarantee assumed by the collectivity. Yet while the old collectivism may die out, public regulations persist as a key element of pension systems. The same holds for elderly care. When the basic orientations of those traditionally engaged with care services (the family, the community, welfare bureaucracies) are mixed up with the laws of the market, human need is no longer the leading collective reference. However, it persists as one reference among others. Thus, it appears problematic to presume simply that ‘market morals’ replace nonmarket morals. Moreover, as the previous sections have shown, ‘market morals’ have to be deconstructed to unveil their symbolic content in a given organizational field. Market transactions are always embedded in more or less complex value sets, the understanding of which is crucial when the task is to chart the (new) culture of the welfare market(s). Seen in this light, the moral economy approach as outlined in the previous section warrants clarification. Norms of reciprocity which lie at the heart of this approach are but one angle from which to analyse pension and care systems. This section argues that a number of further issues are germane to the organization of old-age provision and should be accounted for in the analysis of old-age-related welfare markets. It departs from the assumption that culture is made up of moral concerns. ‘All cultures include, or are based on, morals’ (Lane and Ersson 2005, 29). It accounts, however, for the multitude of values, norms, and beliefs essential to human and collective action at various levels and with varying consistency. Therefore, any study analysing culture requires a plain, and selective, focus. For the challenge is to develop an analytical grid appropriate for empirical investigation. With the intention of composing such a grid, this section commences with a thought experiment and introduces two basic distinctions useful for the classification of moral issues pertaining to the culture of welfare (markets); it then proceeds to a reflection about those interpretations of norms which were typical of the era of (premarket) collectivism. This reflection mainly draws on the literature dealing with social welfare provision at a theoretical level. It certainly is not immune to the objection of simplification; yet the analysis of the actual patterns of sense-making in organizational fields of old-age provision, as carried out in the remainder of this book, will demonstrate its overall utility.

A Thought Experiment and Inferable Distinctions Essential dimensions of the moral economy of old-age provision can be derived from a short thought experiment. Imagine a (modern) Western

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society involved in a debate on how to organize care and pension systems most appropriately. Old-age provision is acknowledged as an organizational problem; the question is how the latter is to be tackled. Against the value set emblematic of modern Western societies, a decent later life may be discussed in terms of rights. As ordinary citizens have worked hard through their lives— unless they have been prevented from this by unfortunate circumstances— they may be seen to deserve the support of those who benefited from their efforts, namely, the nation or younger generations inhabiting it. There may, however, exist concerns about to what point this recompense should mirror individual achievements, based, for example, on the assumption that better achievements over an individual’s life correspond to greater benefits to the collectivity. From this may be inferred that, in respect of the inviolable dignity of any human being, basic needs of the elderly should be met, albeit without putting all older people on equal footing. Consequently, the moral economy of old-age provision may be governed by norms evoking deservedness or human dignity, or both to a varying degree. Both are substantial issues as they address ‘end values.’ Irrespective of which substantial norm is given preference, procedural issues will come into play as well. There may indeed be a debate about who should be responsible for the substantial norms being fulfilled. Entitlements to benefits or services may be ensured by the collectivity or by individuals preparing (the circumstances of) their later life autonomously, with the help of assets accrued in that period or through an involvement in reciprocal solidarities (family support, for example). Habitually, this question will be combined with a reflection about the (most) effective organization of oldage provision. The query here is what mode of management does work best. Is individual thrift and personal involvement most effective, or are there problems encountered by those urged to invest in informal care networks or to prepare themselves for later life, due, for example, to structural uncertainty and coordination failure? As will be argued in greater depth below, one important moral dimension behind this question is revealed by controversies about what counts more at the end of the day: optimal outcomes on the whole or a guarantee of a given outcome granted to any citizen. In procedural terms, then, a moral economy of old-age provision connects with the issue of responsibility and with notions of what may be termed sound management. Put in other terms, substantial issues are at stake when people dwell on reasons why the elderly should receive support from pension or care systems, while procedural issues come into play when people interrogate themselves about how to organize these systems. The thought experiment suggests that, in modern society, deservedness, human dignity, responsibility, and sound management are four crucial issues relevant to the moral economy of old-age provision. In all probability, these issues are far from covering the whole spectre of meanings and representations commonly associated with retirement and elderly care. In addition, they may be further

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differentiated into subcategories. However, it will be shown below that key notions of the political debate on pension and care systems correspond to, or intersect with, (one of) these four issues. With regard to the distinction between substantial and procedural moral issues, it is important to see that, at some point, substantial values may be ruled out by procedural considerations and vice versa. For instance, social justice is, at least implicitly, a core value of Christian civilization.34 However, a smooth functioning of the economy is often deemed predicated on limits set on social justice, with public redistribution according to human need being opposed to the requirements of a competitive market system. With respect to retirement provision, for instance, paying comfortable pensions to all may be viewed as being reasonable but then ruled out because of concerns about alleged negative economic impacts. Moreover, the (two varieties and) four types of moral issues certainly overlap in the process of collective sense-making relating to old-age provision. Nonetheless, they stand for analytically distinguishable problems and mechanisms. To some extent, however, the four issues are empty shells. It can no doubt be argued that they correspond to basic and solid cornerstones in the culture of modernity, but one should remember here what has been expounded in the first section of this chapter. Therein, it was argued that interpretations of major cultural references are incomplete, contingent, and reflexive, and that a culture comprises general cognitive frames within which time- or group-specific representations occur. Therefore, it makes sense to differentiate between general cognitive frames constitutive of a given (welfare) culture on the one hand and particular interpretations of norms, operated within these frames, on the other. For an example of the difference between general frames and particular interpretations, consider the case of individual freedom. Freedom is a cognitive frame underlying the process of civilization across the Western world. Yet it is obvious that freedom means different things in the United States and in Northern Europe, for instance. In most parts of America, freedom is deeply associated with economic independence and self-reliance, and collective welfare provision is residualistic; in Northern Europe, it is the reliance on public services which is generally seen as a prerequisite of human self-realization. The thought experiment conducted above has elucidated a number of moral issues essential to the culture of old-age provision in advanced Western societies. As generic norms, they have grown and matured over the twentieth century, and they are still widely evoked in the public sphere of our times. In that sense, they prove steady references. Regarding pension systems, for instance, it appears that despite transformations in workforce composition and family structures, many of the same issues that concerned policymakers and other collective actors a century ago are still raised at present (Walker and Foster 2006, for the case of Britain). This pertains to questions of how to encourage and reward thrift, maintain financial viability, and eradicate poverty. Regarding elderly care, one should certainly take into account the overall shift from family-based care to more mixed arrangements. Yet looking at the past

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thirty years or so, it becomes obvious, here as well, that basic cognitive frames which were crystallizing decades ago continue to impact on current public debates. This, for instance, is reflected by a never ending ‘renegotiation of the balance of care responsibilities between the state and the citizen’ (Anttonen et al. 2003, 174). Whereas the cognitive frames informing reflections on old-age provision are rather inflexible, the prevailing interpretations of the moral issues under consideration here remain open to investigation, as they supposedly vary across periods of time, organizational fields, and national cultures. As noted earlier, it is, to a large extent, institutions that embody the morality of, and confer meaning upon, large-scale social welfare provision. This is why it appears particularly promising to examine the four issues under question at this level. To be sure, institutions may embrace numerous and contradictory moralities; yet for analytical purposes, it makes sense to select a number of aspects from the complex set of symbolic connotations associated with a given institution. On the basis of the afore-sketched analytical distinctions, the following discussion, which basically draws on the wider literature, allows us to recapitulate both the cognitive frames essential to the moral economy underlying the modern treatment of old age and those interpretations which appeared prominent during the postwar settlement. Importantly, the existence of dominant principles and interpretations does not imply a full realization of the norms at issue; rather, it is agued here that these norms (have) push(ed) care and pension systems towards increasing conformity with them. The argument runs for each issue and organizational field separately. The final part of the section touches upon recent tendencies of change, subject to further exploration in the remainder of the book. Deservedness and Duly Earned Entitlements In the modern welfare state, public policies have often centred on the norm of deservedness, and, over the twentieth century, a particular interpretation of this moral issue crystallized internationally. Retirement provision is a case in point. Pension arrangements largely followed the idea that the elderly, as they had contributed to the current society’s well-being through their lifelong efforts, deserved monetary entitlements after retirement (see Snell 1996, for the case of Canada). Postwar pension systems, in one way or another, reflected an institutional recognition of what the elderly had achieved as a generation.35 Arguably, these systems were not exclusively governed by this rationale. Yet there was a powerful collective representation according to which younger generations should support those who over their life spans had worked hard and thereby created collective prosperity of which they now deserved a fair share, together with a consideration of eventual individual hardship. This representation chimed with widely held values of equity and social justice. To be sure, this model did not apply to all pensioners. The selfemployed were often excluded from collective retirement provision; for

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many, the self-made (private) pension turned out to be the regular route to retirement. Also, women with incomplete work biographies were predominantly viewed as an appendage to a male’s pension scheme. Moreover, there were differences in the ideational connotations of guaranteed pensions. Bismarckian social security systems were based on insurance schemes which instilled into claimants a sense of individually accumulated rights, with a clear understanding of pensions as ‘a “fair” reward for individual contributions during one’s life’ (Clasen 1997, 80, for the case of Germany). State basic pension schemes in Anglo-Saxon countries, though limited in scope, relied on a ‘citizen’s-wage’ rationale corresponding to the idea of ‘generational deservedness’ (Myles 1984).36 Means-tested pensions served as a complement. Though they appeared to be in conflict with the ‘citizen’s wage’-rationale (because presupposing a humiliating control of the claimants’ private sphere), they more neatly conformed to this rationale where large cohorts of retirees considered them as taken for granted, with a high take-up rate as a result. In general, state-run systems, and their flat-rate defined benefit arrangements, echoed the idea of universal social citizenship (Mau 2003). It is noteworthy, however, that supplementary public insurance was introduced in the Anglo-Saxon world as well; hence the rhetoric of insurance worked here in a way similar to continental European countries. On the other hand, insurance schemes often became infused with the idea of a generational contract; the legitimacy of this idea was grounded in the concept of intergenerational solidarity, with the latter being operationalized through joint contributions of younger cohorts and collective entitlements for the elderly (Kohli 1987). This model was reinforced by a whole range of regulations addressing particular circumstances during the life course. Credit points awarded for temporary unemployment, parenthood, or longer periods of training were introduced into social insurance schemes, so that the logic of deservedness extended ever wider. In public retirement schemes, actuarial calculation was biased through rules introduced for the sake of social equity. Granted, individual meritocracy was an important issue. Recent social policies have exhibited an emphasis on ‘work ethic . . . used to justify differential rewards’ (Kemshall 2002, 34), but this ethic has long been deeply enshrined in Western pension systems. At the same time and to a varying extent, however, the postwar settlement conceived of the elderly as citizens having contributed to a nation’s development and therefore warranting compensation by society. Overall, the interpretation of deservedness taking shape throughout the twentieth century endorsed the idea of pensions being duly earned entitlements. One may object that this only pertains to countries with strong public pensions schemes. Elsewhere, however, the morality of earned entitlements applied to the majority of (male) breadwinners through the mechanism of occupational final salary provision. In Anglo-Saxon countries, firms and their employees were heavily encouraged by tax breaks to invest in

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company-based retirement provision. The leitmotiv was to corporatize social citizenship, as Dobbin (2002) has put it. The workers’ service at a job gained society-wide acknowledgment, reflected in generous public subsidies awarded to members of the typically defined-benefit schemes. This way of institutionalizing retirement provision certainly differed from the generational contract encapsulated in social insurance schemes. Yet it drew on a generalized social condition which is that of a (male) salaried employee. From this perspective, occupational pension schemes were an expression of the morality of earned entitlements as well. With respect to elderly care, the role of this morality is less obvious. Social care and nursing originated in charitable action and local antipoverty policies, both of which were shaped by paternalism rather than the acknowledgment of rights associated with people’s life-long achievements.37 Moreover, the prevailing moral expectation was family care. However, in some places, the incremental institutionalization of elderly care led into arrangements built on the model of social insurance (in Germany and implicitly in France). Elsewhere, the provision of elderly care became loosely coupled with the idea of social citizenship. This especially pertains to countries where statutory bodies were directly entrusted with the provision of social services on a broader scale from the 1970s onwards (this includes Britain and Canada). All this happened at a later stage of the postwar settlement. Whatever the route taken towards institutionalization, then, formal elderly care became part of the legal architecture of the (local) welfare state, at least as a tendency. Thus, it can be assumed that, regarding the question of moral foundations, an elective affinity crystallized between the care systems as taking shape from the 1970s onwards and further branches of the welfare state for which earned entitlements proved a crucial (though not exclusive) reference.38 This was most obvious where public health care authorities or sickness funds were mandated to finance care for the frail elderly; but it also materialized where elderly care tended to be comprehended in terms of statutory social services. Having said this, though the morality of earned entitlements may well have influenced care systems as an implicit rationale, one would overstate the case when claiming that it was a basic cornerstone of the postwar settlement. Dignity and Need-Based (Basic) Support A further cognitive frame relevant to Western systems of old-age provision is human dignity. From its very beginnings, modernity promoted ‘the sacralization of the human being’ (Zelizer 1978, 591) and placed high value on the respect for the infinite worth of individual personality, including where economic transactions were involved. This also mirrors the widespread ‘belief that it would be unfair to let individuals suffer from . . . accidents outside their control’ (Elster 1987, 96), a theme which is omnipresent in classical and contemporary political philosophy. Modern thinking indeed

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implies that risks and uncertainties ‘such as disease, handicaps, poverty, unemployment, homelessness, old age, and long-term care,’ caused by social and natural arbitrariness, require a ‘fair system of cooperation’ to cope with them (Shionoya 2005, 73).39 This idea corresponds to the widespread support for statutory responses to those risks which individuals are not able to manage successfully (Taylor-Gooby 2004). Up to the present day, social policies echo, to some extent at least, this concern for protecting human dignity (Chan and Bowpitt 2005). This also pertains to old-age provision. Again, particular interpretations of this moral issue informed the development of the relevant organizational field throughout the twentieth century. Programmes for medical and (to a lesser degree) personal care were justified by evoking sentiments of (empathetic) solidarity, especially where ‘family failure’ was at issue (Arts and Verburg 2001). Historically, social and medical care is rooted in organized charity, that is, a cultural sphere highly influenced by the language of human dignity. Formal elderly care (including nursing) mostly developed as a ‘little sister’ of health care where this language emanated from a fundamental professional ethos (Brandt and Rozin 1997). In the postwar settlement, the prevailing interpretation of what human dignity implied for the provision of care was that evidenced human need justified access to a society’s collective assets. To be sure, the definition of needs was never straightforward in the practice of social or community care; the realization of rights to care remained incumbent on ‘front-line practitioners . . . acting as street-level bureaucrats’ (Rummery 2002, 29). Nevertheless, the dominating moral claim governing elderly care provision over the last decades of the twentieth century centred on a distinctive interpretation of human dignity, that is, a rationale suggesting initiatives to ensure need-based (basic) support. This particular interpretation of human dignity became, if slowly and patchily, entrenched in postwar care systems.40 Dignity is also an issue relevant to pension systems although it proves difficult to draw a demarcation line between the afore-sketched reference to generational deservedness, on the one hand, and a rationale of retirement provision based on individual human dignity, on the other. Having said this, poor older people have often appeared to advanced Western societies as a human scandal awaiting institutional responses. This was one key background of the (more or less) encompassing antipoverty orientation of pension policies, in postwar Canada and France, for instance. Elsewhere, the misery of (especially) female pensioners was a recurrent topic in the public sphere: Germany, for example, saw major reforms in the 1980s and 1990s in favour of retirees who had assumed family and care responsibilities.41 The pervasive imagery of the poor widow was indicative of an interpretation of human dignity that contributed to the collective plea for need-based basic pension provision. The relevance of the norm of dignity to pension and care systems extends beyond this, even though more implicitly. As Shionoya (2005, 217) argues, ‘opportunities for self-realization constitute the core of the conception of social security.’ Self-realization chimes with human dignity but is a fuzzy

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term which warrants conceptual clarification. Dealing with the financial autonomy of older people, Craig (2004, 107–109) has discussed dimensions of social citizenship grounded in options for self-realization. These dimensions were ‘psychological sense of independence or autonomy,’ ‘choice’ (concerning the way of life), ‘social participation,’ and ‘self-respect,’ which extends to options to reciprocate in social relations. Although Craig reserves the notion of dignity for this latter dimension, it can also be argued that all the dimensions he recapitulates are germane to human dignity. This is consistent with Woolhead et al. (2004), who have derived an old-age-related concept of dignity from findings of an empirical study on the attitudes of British senior citizens. The authors conclude that human dignity is a ‘multifaceted concept’ (Woolhead, 168) and embraces self-esteem, human rights (including choice), and autonomy (in the sense of independence and selfcontrol). Employing this broader concept, it becomes obvious that the postwar settlement gave rise to social care policies which aimed at improving the conditions of self-realization of elderly people (besides others which went in the opposite direction). Put at its extreme, creating conditions for full selfrealization implies ‘not to discriminate between citizens’ (Rothstein 1998, 157), through intrusive means-testing and stigmatisation, for example. Even though Western welfare systems never achieved such a state of nondiscrimination, they nonetheless opened space for initiatives following an agenda of ‘social empowerment.’ This notion, promulgated by theories of social intervention (see, for example, Eriksson et al. 2003), became a cornerstone of a professional ethos emerging in the social welfare sector from the 1960s onwards. The central idea was interactive social support which was meant to overcome the tradition of paternalism and to enable welfare recipients to live more independently (Starkey 2003, 278–79). At that time, the empowerment perspective appeared as one of the ‘“core” values of social work’ (Rummery 2002, 35). It has meanwhile become associated more and more with the enhancement of choice options available to welfare and care recipients (see also Baldock 2003; Jordan 2006). Irrespective of this, the interpretation of dignity gaining prominence in the second half of the twentieth century also affected the encounter between citizens and welfare-providing agencies. Responsibility and Statutory Enactment One procedural moral issue deeply seated in modern culture is responsibility. In modern thought, questions about who should be accountable for what kind of action are fundamental to rational decision making. Answers provided to these questions carry a moral dimension insofar as they affect conceptions of ‘the good.’ Enlightenment thought made purposive and consequentialist action a collective virtue, with individuals becoming viewed as secular architects of their own fate. Sociologists and social movements

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taking centre stage from the mid-nineteenth century onwards did not discount this idea but saw the necessity for public action to enable individuals to act as responsible citizens. This necessity was sometimes contested by liberal forces, yet the very idea that collective responsibility was required to enhance a society’s well-being became ever more influential during the twentieth century. The modern welfare state has evolved as a major trigger of this idea; through its agency, ‘individual responsibility has become social responsibility’ (Shionoya 2005, 279). The concern with accountability led into a debate about how individual action was to connect with public intervention. Major public policies followed what Goodin (1995, 31) has termed a ‘moral division of labour.’ The emerging welfare state was authorized to enforce various kinds of economic transactions on behalf of its citizens, whereas the latter were (ideally) supposed to have democratic choice about the purpose and the range of these transactions. Essential to this handling of responsibility issues were, among other things, debates on ‘general fairness’ and ‘the just distribution of burdens’ (Rothstein 1998, 157, 163). Whatever the retained solution, the responsibility for a large (and increasing) number of welfare-related arrangements increasingly fell on collectivities such as the central state, municipalities, or nonpublic bodies enjoying a quasi-public status (for example, voluntary agencies or social insurance funds). This was a major prerequisite of what Gilbert (2002, 4) has referred to as ‘policies framed by a universal approach to publicly delivered benefits.’ Yet it would be misleading to assert that, during the heyday of the welfare state, all responsibility for social welfare provision lay with public(ly sheltered) organizations—an imaginary state of affairs sometimes suggested by recent work on shifts in the responsibility for providing care or benefits in Western welfare states. The recent transnational ‘emphasis on responsibilities over rights’ (Gilbert, 61) and the powerful discourse about ‘the responsibilized citizen’ informing current social policies (Clarke 2005, 451) arguably point to a major trend in social policy internationally; however, Western welfare states always did set (more or less far-reaching) limits to public responsibility with regard to the enhancement of their citizen’s social welfare. This comes clearly to the fore when regarding the case of old-age provision. As noted earlier, even after the creation of public agencies entrusted with the organization of elderly care, there was continuous negotiation about the respective role of families and professional services. Also, third parties proved crucial. In many places, civil-society-anchored organizations such as charities or nonprofit service providers developed into key players of the field (Salamon 1995). While they often became perceived as publicly liable service managers, the state often refrained from taking over the full responsibility in economic and professional respects. This configuration, commonly referred to as a ‘welfare mix,’ was not only multifaceted but also exhibited flexible boundaries with regard to the roles of the parties involved

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(Evers 1993; Ascoli and Ranci 2002; Graefe 2004). Having said this, twentieth century welfare states increasingly put elderly care services under the control of (local) public bodies and recurred ever more to (often centralized) patterns of statutory funding. Seen in this light, the interpretation of responsibility as crystallizing in the postwar settlement implied an ever stronger statutory enactment of care provision. The recent history of pension systems in part resembles developments in elderly care. As set out earlier, notions of self-help and self-reliance played an important role in the (welfare) culture of modernity. Especially in the AngloSaxon world, individual thrift remained an important issue although there was a net tendency towards collective retirement provision here as well.42 In some countries, the day-to-day management of pension systems was handed over to nonstatutory agencies run by stakeholders such as trade unions or employer associations. In this case of ‘“social partner” provision’ (Hyde et al. 2003, 190), representatives of these stakeholders also participate in negotiations about the contents of regulations. In the French complementary pension scheme, such stakeholders even settle on the rules under which contributions are raised and benefits granted. The fact remains that retirement provision ubiquitously became subject to (more or less) encompassing public regulation in the course of the twentieth century. In Anglo-Saxon countries, various forms of corporate ‘(social) pension responsibility’ surfaced. As argued above, occupational final salary schemes, typical of the pension system of these countries, were based on public rules (such as tax breaks) and followed the widely held view according to which the provision of retirement income was largely incumbent on employers. While, in juridical terms, such schemes were usually ‘based on employers‘ voluntarism’ (Bridgen and Meyer 2005, 770), they corresponded to a (not always realistic) popular expectation. Moreover, even where public retirement provision remained limited in scope, there was a tendency to extend the level of public responsibility, for example, in the British social security system (Lowe 2005,135–172) or in Canada’s public-pension sector (Snell 1986). In the case of pensions as well, statutory enactment turned out to be the dominant interpretation of the responsibility issue. With a given level of welfare provision considered as legitimate, the state and involved third parties were expected to ensure that decent pensions became available for the bulk of the (male) working population. Sound Management and Institutionalized Security The discussion about responsibility connects with a further moral dimension which should nonetheless be considered separately. In modern society, the interest in organizing properly transactions for the sake of public welfare is associated with a concern over efficiency and effectiveness, two notions between which the following will not differentiate further. The

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moral property of the issue resides in what kind of effectiveness is valued most highly, and consequently, in the meaning conferred upon what may be termed the sound management of (public) welfare provision. The question also pertains to assumed side effects of particular governance modes, for example, with regard to wider distributive objectives.43 The cognitive frame relevant to this moral issue is universal, as evidenced by the worldwide proliferation of formal rationality as a key norm in the mind map of mainstream public and private organizations (Meyer et al. 1994). However, different interpretations of rationality involve different modes of governance. Thus, a given mode of managing social welfare may be deemed valuable because it is expected to yield best value for money for a majority of people, and yet another management approach may be preferred because it entails a guaranteed (but perhaps not optimal) payoff to everybody. As well known from (welfare) state theory, the public regulation of welfare provision was long understood as a response to market failure, with the latter being perceived as a problem endemic to capitalist economies (van Crefeld 1999, 360–364; Slater and Tonkiss 2001, 117–137). The institutional regulation of old-age provision was affected by this as well, as the elderly were meant to be guaranteed a certain level of income whatever the social, political, or economic circumstances at the time of their retirement. The idea was to institutionalize social security, apart from the market sphere. To be sure, there was transnational variation in which type of regulation was conceived of as most appropriate in that respect (and also considerable disparity in the extent to which deviation from the general rule was tolerated). For instance, funded saving plans under the control of social partners or tax-advantaged corporate pension schemes were deemed to serve most adequately the need of old-age income security in a number of countries. Elsewhere, central-state provision was seen as the best way to guarantee social security (at least to the poor). In the Bismarckian world of welfare, it was pay-as-you-go schemes overseen by the state and co-managed by major interest groups that were considered most effective. The idea of awarding institutionally guaranteed (decent) pensions was universal, though. As regards eldercare, the aforementioned difference in governance modes was equally obvious. While in some countries, statutory services became seen as ensuring sound management most effectively, third-party-government—that is, the running of public private partnerships involving public bodies and nonprofit organizations—was given preference elsewhere. The inclination towards third-party-government followed the idea that actors bound to local communities, and (in part) independent of public bureaucracy, were most sensitive to old people’s needs. Leaving aside these differences (which certainly had significant consequences), one can, however, single out a general procedural norm crystallizing in care systems over the last decades of the twentieth century. This norm stipulated that service provision was soundest when agencies held out permanent and publicly backed service facilities in order to meet needs which were unforeseeable and not

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met elsewhere. As with pensions, institutional securities came to be considered valuable as a matter of principle, notwithstanding that actual efforts and outcomes proved quite variable between countries and also between local settings. Ideas about what is sound management were obviously interwoven with the ‘culture of safety’ (Furedi 1997) materializing in twentieth century societies. Major societal institutions were designed for guarding against accidents of life, as human beings were deemed in a state of permanent vulnerability. In a sense, social policies including those relating to old-age provision were also affected by this as they were meant to ensure reliability in the first instance. That public management is the appropriate institutional strategy was seen to follow from ‘efficiency issues due to imperfect information and asymmetry’ (Shionoya 2005, 222). As individuals were deemed to dispose of limited capacities to fully control the process of managing welfare provision (for example, when deciding over saving for retirement or receiving social care services), the state appeared as a guarantor of social security (in a broad sense). From this perspective, sound management chimed with bureaucratic public agency, provided that the norms of ‘procedural justice’ (Rothstein 1998, 160) were respected, namely norms ensuring the prevention of fraud, waste, or abuse of power.

Towards a New Moral Economy of Old-Age Provision? Do the interpretations of those moral issues that were underlying care and pension systems in the postwar settlement (see the synopsis in Figure 1 above) survive contemporary sociocultural and economic change? Thus far, much empirical research on the moral rationales prominent in systems of old-age provision has focused on attitudes towards state-run or collectivistic welfare.44 This research provides evidence of persisting collective support for (re-)distributive state interventionism (see, for example, Taylor-Gooby 2004). It may be inferred from this that approaches to the old moral economy in the pension and care systems remain highly instructive. However, it appears uncertain whether they tell us the full story when assessing the contemporary culture of old-age provision. Indeed, the recent literature on social welfare provision highlights significant change concerning some of the moral issues fundamental to it. The respective accounts are widely dis-

Substantial norms Procedural norms

cognitive frames

prevailing interpretations

deservedness

(duly) earned entitlements

dignity

need-oriented (basic) support

responsibility

statutory enactment

sound management

institutionalized (social) security

Figure 1. The moral economy of old-age provision in the twentieth century

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persed and have hardly been subject to more systematic scrutiny thus far, yet they provide some clues to the analysis of the changing moral economy of old-age provision. In essence, the debate explicitly concerned with moral questions centres on two of the four issues discussed above. Referring to the diagnosis of a looming ‘risk society,’ various scholars observe that, in contemporary welfare states, ‘collective responses are delegitimated’ (Kemshall 2002, 8), and ‘social policy is increasingly pursuing approaches to risk which pose the individual as responsible for his or her own risk management’ (Kemshall, 23). Others have labelled this the ‘privatization of responsibility’ (Rodgers 2000, 3). A second issue under debate is the dignity of the recipient of welfare provision, especially in the field of social services. The rise of the consumer society is seen here to generate a growing appreciation of choice, with the latter being viewed as means against the (assumed) paternalism of public welfare provision (Blomqvist 2004; Rostgaard 2006; Clarke et al. 2006). Consumer empowerment is becoming a key value. More implicitly, the literature alludes to tendencies calling the morality of earned entitlements into question. The debate about overconsuming ‘baby boomers,’ mentioned earlier, points to doubts about the viability of the generational contract which ensures collective compensation for the lifelong efforts of the elderly. Also, the statutory enactment of welfare provision has become seen as an unjustified ‘burden’ borne by private production (see Galbraith 1963). Concepts originating in the New Public Management movement suggest that social welfare provision can be handled more efficiently by (loose) context steering rather than statutory enactment (Le Grand 2003). The interpretation of what is sound management shifts towards (quasi-)market solutions, with an ever higher value being assigned to maximum return on public investment. In the field of pensions, this goes alongside a growing propensity to ‘sacrifice security for speculative gain’ (Sayer 2000, 80). Payoff achievable through using the dynamics of financial markets to the advantage of larger cohorts of successful savers appears to become the primary reference. These developments, suggesting new moral conceptions in the field of old-age provision, will be considered in greater detail by the subsequent empirical investigation. However, the literature also suggests that these developments operate far from consistently. This, for instance, is stressed by critical assessments of the new consumer culture in both the society as a whole and the social welfare sector. With the establishment of consumption as the pivotal medium for the expression and experience of freedom, there are forms of social regulation which, on the one hand, ‘seduce’ welfare recipients but, on the other, generate insecurity and doubts. As to retirement income, there is mistrust not only in statutory provision but also in private insurance schemes emblematic of the new choice agenda (see, for example, Taylor-Gooby 1999 or 2005). Also, the logic of statutory enactment is

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still perceivable, notwithstanding governments seeking to ‘shift responsibility onto individuals and private pension providers’ (Mann 2006, 79, again for the case of Britain). Public regulation has remained an important issue, when it comes to private pensions schemes, for instance (Hyde et al. 2006). As Mann (2006, 92) concedes, ‘legislators accept they have a responsibility for those who have lost pension savings through no fault of their own.’ Even in liberal regimes, older people still feel that ‘their portfolios for later life should have elements from both their individual contributions and from collective welfare’ (Kemp and Denton 2003, 754). Concerning elderly care, ‘inherent tensions between choice, user empowerment, cost-effectiveness and the avoidance of costly residential care’ have been observed (Kemshall 2002, 76, see also Rostgaard 2006). More generally, there remains, up to the present, ‘cultural resistance to including certain items in the social order—namely, those related to human life, death, and emotions—in a market type of exchange’ (Zelizer 1978, 593). Against this background, the new moral economy of old-age provision warrants closer inspection.

5

Sense-making of Welfare Markets for Old-Age

This chapter constitutes the empirical body of this book. It presents major findings of an encompassing press review conducted to find out which patterns of public sense-making go alongside the proliferation of welfare markets in old-age provision. The first section sets out the methods applied for the empirical investigation and discusses their limitations. The second section provides a structured account of the public debate in the four countries under study, focusing on comments from journalists, experts, and collective actors with a stake, or an interest, in pension and care provision. The final section proceeds to a comparative synopsis and a theoretical interpretation of the compiled communications, in order to develop a synthesis of what can be termed the new moral economy of old-age provision.

5.1 THE STUDY: THE GENERAL APPROACH, RESEARCH DESIGN, AND METHODOLOGICAL QUESTIONS As noted in the introduction to this book, the empirical investigation of the cultural embeddedness of welfare markets in old-age provision conducted for this study draws on a review of the quality press. This section will discuss the rationale behind this approach. It will also elaborate on the way the empirical investigation has been conducted and the technique used for presenting its findings. At the same time, it will address a number of limitations inherent in this design.

The General Approach Culture can be analysed in many ways. However, the investigation conducted for this study rests on a number of basic assumptions which constrain the range of available research designs. Firstly, analysing collective meaning conferred upon social phenomena implies looking beyond their outward manifestations (for example a statement on the purposes of a given regulation as expounded by official textbooks or technical notes). The challenge is to understand how social actors refer to the symbolic message

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such an outward message carries or is deemed to carry: ‘Whether internally, or externally in relation to other institutions, culture in general and the life-world of communities—we have need of interpretation, of Verstehen’ (Münch 1987, 132). Secondly, concerning the actors of particular interest, (organized) stakeholders in welfare state institutions and ‘gatekeepers’ of public opinion are considered the most influential carriers of ‘welfare culture(s)’ (as noted in chapter 4). Thirdly, as the aim of this study is to capture unknown patterns of sense-making relating to institutions of oldage provision, some methods commonly employed in the study of culture, such as surveys on attitudes or ethnographic enquiry, do not appear helpful here. Rather, the research must use a catalyst of information that discloses processes of collective sense-making around a given institution(al setup) or of the actualization of cognitive elements associated with it. This is why this study embarks on the analysis of media communication. In modern society, public media fulfil the role of generalized communication between citizens who— while being prevented from directly exchanging their perceptions with most of their fellow citizens—are nonetheless interrelated through ‘organic solidarity’ (in the sense of Durkheim 1984). In modern society, social spaces transcending the boundaries of individual lifeworlds, as well as ever more far-reaching functional differentiation, thwart any attempt to handle social relations by direct encounters. Societal integration, as far as necessary, is ensured by a system of collective representations which is fundamental to political governance and, to a notable extent, works via mass media communication. Major theories of the public sphere have illuminated this process (see, for example, Habermas 1989; Mayhew 1997; Street 2001; Benson 2004). Many of them have also shed light on its shortcomings, originating for instance in procedural limitations (content overload) or power asymmetries (rooted, for instance, in the political economy of society). In particular, the uneven distribution of economic resources in Western society is assumed to influence the catalyst role of the mass media, with some groupings being more capable than others of influencing the way the media portray their messages (Thrall 2006; see also Boogs 2000). At the same time, however, there is debate as to whether media deploy an autonomous power in the structuration of societal or social relations. Many hold that this power tends to be overestimated because media influences are often ‘diluted, deflected or even destroyed by more powerful influences that mediate the media by intervening between them and their effects on wider society’ (Newton 2006, 225). On the other hand, the legitimacy of public media is widely premised on demonstrative neutrality. Without engaging with the vast debate about mass media and their role in society, this book is based on the conjecture that quality newspapers represent those patterns of collective sense-making that impinge on the building of societal institutions. This does not exclude manipulation or biased opinion building. Quite the reverse, the design of institutions is partial in Western societies, presumably very much in line with biases in media communications.

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It follows major streams of what is termed here the official culture of a given society and is understood as an ensemble of representations taking centre stage in a theatre, the architecture of which is moulded according to the social stratification typical of Western countries. Quality newspapers are a focal ‘political institution’ (Cook 2006) in Western nations as they process communications of elites interested in, and often responsible for, institution building. They also reflect major political challenges from below, as far as these have found access to public arenas. Thus, the official culture, however biased it may appear, is crucial for society as it provides interpretations to those seeking to understand why institutions persist or change. After all, it is obvious that ‘however media texts are understood, their content matters because it is assumed that we believe what we see or read,’ and that ‘the consumers of newspapers . . . have come to treat these media sources as the basis on which to think and act in the world’ (Street 2001, 4, 7). The structure of the public sphere, that is the degree to which it allows democratic opinion-building based on free reasoning, depends on historical situations and the nature of the issue under debate. While public spheres are varied (Marx Ferree et al. 2002), mass media always accompany and give shape to the process of societal integration. They ensure the formation of collective representations essential to the design and reform of institutions. As they serve as a filter of communications accessing the public arena, they give a floor to experts or pressure groups that appears as representative of a wider spectrum of views and attitudes. Public communications in quality newspapers reflect both existing institutional ideologies and their reinterpretations. ‘Institutional ideology’ embraces the ‘official presentation of an institution’s history, the generally accepted statement of its philosophy and purposes and the justification of its existence, often around a ‘flattering mythology’ (Hertzler 1946, 56). As set out in the preceding chapter, however, the symbolic frames typical of modern society are subject to reinterpretation, and this also applies to ‘institutional ideologies.’ The relevant set of institutions includes markets and their regulation. Thus, an essential question for this study is how collective meaning associated with welfare markets is blended with ‘institutional ideologies’ of the postwar welfare state, knowing that moral ideas constitutive of the market order, such as consumer empowerment, have ‘served to legitimate an extension of market principles into spheres that formerly have been exempted’ (Smart 2003, 100).

Design and Methodology In correspondence to the theoretical reflection undertaken in chapter 4, the empirical investigation conducted in this chapter is structured by the four moral issues identified earlier as key categories for assessing the cultural foundations of the fields under study. This reflection suggested that the culture of old-age provision embraces a multilevel morality concerned with

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questions of deservedness, dignity, responsibility, and sound management. With this analytical grid, the following investigation will review public communications of experts, journalists, and major collective actors as appearing in a range of quality newspapers. This investigation will refer to various problems and events, as moral reasoning is linked to social facts and perceived problems. The chief challenge is to search for the moral element in a given communication and to disentangle it from the material content of the communication in an unbiased way. The data base of the analysis consists of compilations of articles accessed by multiple keyword research within newspaper archives or by the help of specialized press review services.1 With regard to the newspapers selected, the analysis concentrates on moderately liberal and centre-left organs. The rationale behind this decision has been that, for instance, media with an extraordinary leftist profile as well as fully fledged business organs may not carry much reliable information on the focus of collective sense-making relating to issues of social welfare provision. As national media landscapes vary, the choice of the newspapers is not congruent throughout the countries under review.2 However, regional media are included in the sample because one of the two organizational fields under study, namely elderly care, proves a highly localized arena. With very few exceptions, the extraction covers four years, ranging from 2002 to 2005. This window of observation appeared sufficiently large to grasp relevant lines of debate, including controversies typical of the country, field, and period under study. A first reading-round served to build a general panorama of the lines of communications at issue, the aim being to sharpen the view on what matters at all with respect to the culture of welfare (markets) in old-age provision. On the one hand, this helped draw a picture of those actors actually involved in the organizational field under study, checking thereby the profile of the organizational landscapes as discussed in chapter 2. On the other hand, this first assessment contributed to the identification of the four aforementioned categories and to the reflection on their symbolic substructure. Thus, the four categories developed in chapter 4 do not originate exclusively in the thought experiment presented there; rather, they matured in a dialectical cross-check of theoretical considerations and empirical impressions gathered through the unfiltered enquiry into mass media communication. One further outcome of this first round of data review has been that, contrary to what is common to many other studies on social welfare provision, spokespersons from governments and political parties should not be given too much attention in an investigation of processes of collective sensemaking. In fact, these actors are frequently driven by tactical considerations as they have to find solutions that work in the short term. This is consistent with an argument of DiMaggio (2002, 93), who has drawn attention to ‘the capacity of political actors to speak in multiple registers, invoking varying orders of value . . . in the hope of building coalitions.’ The investigation will take this problematic into account and widely disregard communications

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from active politicians. Exceptionally, very typical statements from state or party officials as well as viewpoints of politicians without a current stake in the subjects at issue will be included in the review. On the whole, however, the focus is set on other types of actors. A first category is academic experts as these both appear as carriers of what is accepted as collective knowledge and have a capacity for critical assessment. A second category is journalists as these are both mediators of public communication and bird’s-eye commentators on current debates. In addition, they can be assumed a helping hand to the opinion building of their readership.3 A third relevant group of actors is think tanks, which may fulfil the roles of experts and journalists but, at the same time, are frequently linked to pressure and lobby groups. Think tanks are nowadays seen as a new and powerful type of public actor in Western society (McGann et al. 2006)—an observation which will be confirmed by the following investigation. A final, and important, category is the whole range of (collective) actors more directly involved in the organizational fields under consideration (see chapter 2). Though the organizational landscapes differ across the four countries under study, most of these actors fall into a number of functionally equivalent categories. To give an example, the role and architecture of trade unions, pensioner groups, or charities is particular to each of these countries; yet, they have plenty of things in common: Trade unions often attempt to represent both public concerns and their members’ interests, and charities frequently embody a dualistic mission, which is engaging with practical help on the one hand and with political campaigning on the other. These groups, and many others, are collective stakeholders in the care and pension system; as they present themselves, and also publicly appear, as adepts of these systems, they extensively confer meaning to, and reinterpret the meaning of, institutions in which they have a stake. The second-round investigation was conducted with the aim of a more systematic qualitative content analysis. The approach used for this analysis was explorative insofar as it was not intended to provide statistically representative findings as this would have gone far beyond what qualitative comparative research can deliver. Nor did this study embark on a fully fledged hermeneutical content analysis (let alone discourse analysis), impossible for the range of sources under consideration. Rather, the objective was to scan major communications which reflect patterns of sense-making typical among the involved speakers. Reading through the articles, numerous statements and comments were marked and assembled in thematic clusters which then were grouped according to actor-types. Thereafter, the multitude of retrieved articles was reconsidered through a selective screen in order to filter out communications which stand for more widespread patterns of sense-making. It is these communications that are recapitulated in the following sections. For the sake of readability, they are portrayed in an essayistic manner. The focus on actor-types will be selective: Each comment is assigned to a distinctive type of author, but its origin will matter for the

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comparative synopsis at the end of the chapter only in case it proves outstanding or counterintuitive. On the whole, the portrayals should be comprehended as condensed accounts, with the comments and statements mentioned or quoted reflecting the mainstream of relevant communication flows. In most cases, the account given on a particular issue stands for communications found in more than one newspaper or communication stream.4 Given this way of presenting the evidence, readers ultimately have to put their faith in the accuracy of the filtering method applied. The selected research design and methodology has a number of limitations which should not remain concealed here. First of all, for the sake of simplicity, the genre of the reviewed articles is not systematically retraced by the filtering system. No particular indication is given of whether articles are taken from the business section or the political news pages. If the statements stem from an editorial, this is only indicated by referring to journalists as speakers. If they exhibit the character of readership advice, such as tips for good investments in the business section, this is implicitly signalled by terming the commentator a financial expert, for example. Articles directly referring to local events are taken into consideration for those elements that contain a general message. Secondly, a number of elements are not retraced by the applied methodology. To begin with, communications are taken as they stand, without considering their potential ideological character, evidenced, for example, by contradictions inherent in an argumentation. Moreover, subtexts colouring the communications are not explicitly taken into account. Granted, each argumentation relies on a cascade of meanings and assumptions that would have to be elucidated to access its full substance. This, however, would imply elaborating comprehensively on each statement so that the investigation could not embrace a larger set of communications. Thirdly, and in the same vein, a fully fledged discourse analysis would allow the de-construction of the postulations endemic to a given argumentation. The method employed for the following investigation, however, focuses on the final message and understands it as emblematic of a pattern of actual sense-making, whatever its wider background. Hence such a background may appear underexposed. This, for instance, pertains to the role of economic power in the entire process of producing communication. In fact, particular actors may be eager to buy articles in the press, for example, columns in the business section, where they provide advice to people looking for a sound insurance plan. Moreover, journalists often depend on specialists with vested interests (a given industry, for instance). However, the press review has to exclude adverts and cannot proceed to an enquiry into the way an article is related to such backgrounds (not least because such an enquiry is tricky to undertake). More generally, a qualitative enquiry extending to a long series of statements can only go halfway towards a hermeneutic reconstruction of the kind of communications under review. For instance, any comment on the moral economy of old-age provision rests on assumptions as to how an economy is

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working. Thus, the economics of retirement provision are based on theories about the interplay between saving and consumption, between supply-side and demand-side dynamics, or between human character and economic agency. To give a second example, mandatory transfers into a given pool of resources may be interpreted differently by certain groups or certain nations. Thus, payroll contributions may be defined as deferred individual reward or as lost taxes. The analysis conducted for this study does not, however, systematically unveil these hidden assumptions. Such interpretations will be awarded attention only if they are explicit. Fourthly, nonissues in media communication carry symbolic implications as well. In this study, this is only controlled for by the (albeit quite effective) instrument of cross-country comparison; differences between policies of news dissemination deployed by the media within a single country are not given methodical attention. For instance, centre-right media such as The Times in Britain may appear to assign pension security much less importance than centre-left papers such as the Guardian. In this case, no particular mention is made throughout the analysis. However, if the issue is not relevant to either of them, but appears overly prominent as in France, for example, then this is perfectly reflected by the comparative assessment at the end of the chapter. Furthermore, variety in the extensity of newspaper coverage is not systematically pictured, be it within one country or between two different countries. A final limitation pertains to the intensity of moral feelings expressed with respect to a given issue. The approach used for this study does not allow a full assessment of this, even though it provides emblematic signals by referring to typical wordings in the debate over a given issue. A second series of possible caveats relates to the way of exploiting the material once it has been filtered out in the way sketched thus far. The classification of communications alongside one of the four moral issues implies artificially dissociating a possible nexus between them. The moral message of a communication may sometimes fall into more than one category, or it may be particular in that it inherently interlinks two of them. Again, whereas in-depth hermeneutic analysis would have to pay scrupulous attention to such linkages, the intention of this study to map larger series of communications sets clear limits to this. The same limits apply to the problem of ambiguity being encapsulated in moral argumentation, as the latter is often addressed to several audiences or with multiple intentions, implying that the precise direction of a moral argument remains opaque or equivocal. For the sake of simplicity, the presentation of the material will sidestep communications of this kind rather than try to engage with an interpretation of these ambiguities. Moreover, a given account does not provide the full story behind the communications or statements. These sometimes refer to a particular political agenda (a law being under debate) or to specific events (for instance, industrial action). While it stands to reason that the context of each communication has to be provided, this contextualization will be confined to what is deemed necessary to understand the immediate background of a comment. The purpose

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of the analysis, indeed, is to figure out which issues are dealt with in the public sphere, without systematically retracing the concrete outcomes of agendas and events. Insights into these dynamics and developments have, however, been used to complete the portrayals provided by chapter 3. Last but not least, any cultural analysis is fraught with the problem of language. A given notion, if translated into another language, may exhibit a different meaning cross-culturally. Again, this study sidesteps this problem rather than embarking on its systematic penetration. It concentrates on notions assumed to belong to a code of symbolic understandings roughly shared among Western countries, irrespective of remaining subtleties that make a (potentially interesting) difference.5 To sum up, the overall aim of the following sections is to provide insights into interpretations conferred upon the four moral issues deemed essential to old-age provision in advanced Western societies, under conditions of creeping marketization. The bedrock question is whether, and in which mixtures, new specifications of the general cognitive frameworks, considered above as being emblematic of modern thinking about old-age provision, take centre stage in the public sphere, and with which national particularities. The conclusion will provide a synthesis of the various patterns of sense-making informing the contemporary culture of (welfare markets in) old-age provision and then allow the completion of the column left unfilled in chapter 4 (see figure 2).

5.2 SENSE-MAKING IN PUBLIC DEBATE AND THE MEDIA This section reviews lines of communications running through the quality press in order to assess how the four moral issues as presented above are addressed in the public sphere. The analysis will proceed as follows: For each country and organizational field under study, those subjects which, principles

current interpretations (to be assessed through empirical enquiry)

substantial norms

deservedness

?

procedural norms

responsibility

dignity ?

sound management

Figure 2. Moral dimensions of old-age provision in the era of marketization

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following their extraction from the database, have been found most relevant to the national debate are presented and assigned typical comments or statements for the four categories successively. These comments and statements are summarized and, if useful, exemplified by quotations.

5.2.1 Britain Pensions Britain saw a vivid pension debate during the period under study here (2002– 2005), as it was heading towards a pension reform designed shortly after that. Accordingly, the issue of pensions has found considerable coverage in the British press.6 Many articles address the issue of deservedness. With regard to public pensions, major commentators firstly blame the system for doing injustice to women with career breaks and years spent taking on care responsibilities. Given the low level of their pensions, organizations representing welfare recipients (charities, pensioner groups, and trade unions) unanimously state ‘women’s pensions are a scandal.’ Representatives of the pension industry and many journalists endorse this standpoint.7 The implicit message here is that women deserve better pensions, because they contribute to the population’s well-being through efforts other than salaried work. A similar point is the hardship of blue-collar workers exposed to particular health risks. This subject is discussed with regard to plans to raise the retirement age. Although many observers and experts endorse this suggestion, a key consultant of the government argues that this might be ‘unfair on lower socio-economic groups, whose life expectancy is generally lower.’ Trade unions express a similar concern.8 Furthermore, there is debate about which social group ought to be given priority when it comes to public support. A number of commentators take issue with (rising) tax breaks for savers earning high incomes. Pensioner groups and charities brand these advantages as ‘tax giveaways for the rich’; some journalists agree.9 By contrast, experts from the financial service sector and business representatives are reported to have campaigned against a cap on pension investment tax relief introduced by the government. Implicitly at least, this debate represents a controversy about who deserves public support for saving. This debate also extends to the provision of public sector employees who enjoy special treatment (final salary schemes, lower retirement age) when leaving their jobs. Business representatives and a range of scientific experts warn against the ‘soaring cost of public sector pensions’ and deplore that taxpayers have to pay the bill.10 Unions contend special treatment is justified because of comparatively low earnings of public sector employees. In their eyes, changing the schemes means ‘unravelling the fabric of the moral contract between government and our members who have served the public with dedication, loyalty and

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professionalism.’11 Norms of deservedness are paramount, yet they prove controversial. Regarding the private-pension sector, the issue of retirement entitlements lost through a bankruptcy of a company finds enormous press coverage over the period reviewed. The debate concentrates on workers not sheltered by the Protection Fund set up by 2004. Unions say ‘workers are being betrayed’ by both companies having plundered final salary schemes to bolster their finances and by governments refraining from providing help. Associations of the victims claim that any ‘pension should be deemed to be personal property under the Human Rights Act.’ Representatives from business equally deplore that ‘innocent victims . . . be deprived of years of their saving.’12 Journalists criticize restrictions set on the amount of compensation granted to the victims.13 Losses of earned entitlements obviously raise emotions among those taking a stance in the press. The debate about earned entitlements also touches upon the shake-up of the corporate pension sector. Unions protest against directors ‘awarding themselves generous final salary pension schemes while forcing their workers into riskier money purchase arrangements’; they claim ‘decent pensions for all, not just the few.’14 A similar message comes from (academic) experts. Some journalists agree, arguing that ‘the state pension should be paid to all’ because ‘everyone deserves to benefit from this insurance against misfortune.’ Others, however, regret that ‘pension promises have, over years, been turned into pension “rights”’ and claim that individuals must ‘come to terms with the idea that “pension rights” are, in reality, not much more than pension “privilege”.’15 This discourse, endorsed by representatives of the financial service sector, is in fact stipulating the end of earned entitlements. When regarding the second moral issue under investigation in this study, namely, the issue of dignity, one can see that the notion as such is mostly used in comments on what most speakers refer to as the ‘shocking extent of pensioner poverty.’ Journalists for example, argue that this poverty ‘undermines the dignity everyone should enjoy in retirement.’16 Pensioner groups and charities share this concern. In particular, they advocate a decent state pension and claim to ‘release people from the indignity of asking for what’s theirs by rights.’ Representatives of the pension industry and the insurance sector agree to this demand, advancing similar arguments. Unions bemoan that retirees are obliged to start to work again to avoid poverty.17 A debate about means-testing connects with this. Charities and pensioner groups complain about the scandal of low-income earners missing out on the Pension Credit and hint at the ‘stigma attached to claiming benefits.’ A pensioner group reports that retirees ‘feel interrogated on the phone when they try to apply for the Pension Credit.’18 Some journalists argue in the same vein whereas others maintain that ‘priority has to be the poorest’ in the public-pension sector, a standpoint endorsed by academic experts.19 Whether means-testing is undermining the claimants’ dignity is apparently a controversial issue.

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Dignity comes into play in another respect, too, namely in comments about pension plan holders being humiliated by salespeople. Representatives of actuarial firms deplore that savers are misled by ‘unscrupulous advisers,’ while journalists argue many ‘scheme members are vulnerable to bungling managers and to fraudsters.’ The Pension Regulator blames advisers for bad advice on risks associated with pension unlocking, arguing that the saver’s ‘hard-earned pension contributions benefited the firm rather than the consumer.’20 Consumer associations criticize the whole advice process, including a ‘second pension mis-selling scandal’ which consisted in false information given to citizens contracting their rights out of the S2P scheme.21 Representatives of the insurance industry and employer associations, however, defend the liberty of the financial sector. Taking issue with plans to establish a compulsory regime in the private-pension sector (under debate during the period under review here), the latter argue such a regime would ‘restrict the freedom of individuals’ who may feel ‘being forced to save breaches their human rights.’22 Hence the dignity of consumers is an important issue referred to with different conclusions. The role of the consumer is also in question when regarding the (moral) issue of responsibility. Numerous communications touch upon this issue. Some commentators accentuate the very responsibility of the individual when it comes to pension provision. A journalist contends ‘the days when governments and employers alone can bear the actuarial risk of our ever longer lives are past. In the long term individuals will have to take on more of that risk themselves.’ Others bemoan that ‘pensioners . . . are not shopping around for the best annuity deal’ or contend ‘pensions need personal, not state, initiative.’23 The pension industry, commenting on negative return of investments incurred to those who have contracted out of the S2P scheme, urges especially younger savers to ‘accept some investment risks.’24 Financial experts argue there are wide-ranging options for avoiding capital devaluation. However, there are many sceptical voices as to the capacity of individuals to save for their retirement appropriately. Financial consultants deplore ‘pensions are a difficult and dangerous thing which people tend to steer clear of.’ Among journalists, concerns are raised over ‘short-sighted workers (who) don’t realise how valuable a good pension is.’ More generally, a widely held national culture of instant gratification is blamed for citizens saving too little. 25 Trade unions espouse a pension system providing individuals with incentives to save. Although this does echo the overall emphasis on individual responsibility, unions generally argue that ‘responsibility for decent pensions must be shared between employees and employers.’26 This is also endorsed by statements of the Pension Regulator. Indeed, the employer-(co)sponsored corporate pension sector is largely seen as a key vehicle towards decent retirement income. Employers and pension fund managers are frequently addressed when the debate turns to shortcomings of the current retirement system; in particular,

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they are made accountable for problems with corporate provision. Referring to the underfunding of many corporate schemes, the pension industry criticizes its membership when addressing the ‘herd behaviour . . . in the knee-jerk lurch by some from final salary to pure money purchase.’ It also underlines corporate social responsibility.27 Equally, representatives of the financial sector take issue with (past) decisions of many pension funds to maintain a high exposure to equities. This is echoed by the Pension Ombudsman, who finds that ‘too many fund managers read their remit very narrowly.’ 28 Employers are often blamed for having abandoned their final salary schemes. Critique firstly comes from their own ranks. An ‘Employer taskforce on occupational tensions’ states that many companies are ‘apathetic to cynical about setting up occupational pension schemes.’ This is endorsed by an employer association pleading for compulsory sponsoring. The national umbrella concedes that employers will have to raise pension contributions; yet it refuses any compulsion and contends companies already ‘are trying hard to keep pensions going.’29 However, tackling the closure of final salary schemes, journalists deplore that solvent companies are stealing away from their obligations by abuse of insolvency law. They also blame actuaries for having given ‘the appearance of certainty to an industry . . . subject to extreme uncertainties,’ with the result of a ‘graveyard of false expectations and broken promises.’30 While representatives of the insurance sector hint at changes in the economic environment eroding the potential benefits of personal pension plans, a think tank holds that the problem lies with financial service companies that ‘shoehorn everyone into a pension,’ whether this makes sense or not.31 Many communications about the pension crisis focus on the state, though. Business organizations, think tanks, and financial experts take centre stage here. Employer associations contend corporate pensions are suffering from protection rules and the tax regime.32 The financial industry deplores the price cap imposed on Stakeholder Pensions as retailers cannot afford to market them because of tight margins. Many business representatives champion new tax breaks, the curtailing of public sector pensions, and an ‘awareness campaign to educate the public.’33 Their analysis is in part endorsed by the already mentioned government consultant, who argues that successive governments have unduly ‘increased the costs of pension saving.’34 More generally, representatives of the biggest employer association argue that there is (also) ‘“very little faith” in the government as a provider of pensions.’35 In their eyes, it is inefficient public regulation of the pension market that is to blame for modest outcomes. This regulation, it is argued, has a negative macroeconomic impact in terms of jobs, growth, and confidence in British companies. In particular, firms are forced into bankruptcy through devolving the burden of protecting corporate pensions on employers. This opinion is shared by the pension industry, which posits that ‘deregulation would bring down costs.’36 Journalists often agree with this, with one maintaining that ‘anything that governments do to interfere

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with the mechanics of the savings market is doomed to failure.’ Others deem it ‘inefficient and ineffective for the government to shoulder the responsibility for making people save’ through regulations or compulsion. In a less radical vein, an expert of a think tank holds that private pensions ‘only stand a chance of flourishing if they can be placed on a secure foundation.’37 Trade unions equally blame the government for erroneous policies. They argue means-testing has discouraged saving and advocate compulsory corporate pensions as the only way to solve the pension crisis. Advocacy groups that defend workers affected by bankrupt pension funds attack the state for not having provided security and information, arguing that Government has encouraged workers to switch to such schemes but it now refuses to compensate victims—ending up with the question: ‘How can we, as a society, just turn our backs on them?’38 From this perspective, the state embodies the entirety of citizens expected to take collective responsibility. It is also exhorted to make the pension market work better. For example, journalists argue for better financial education and urge the state to oversee the pension industry more effectively as ‘crimes that cost people their life savings are too often treated leniently.’ Others plead for compulsion in the corporate pension sector. Overall, as the state is tackled from different sides, and with different arguments, there seems to be a broad, albeit vague, consensus that ‘the state will have to take the ultimate responsibility for providing for its older people.’39 A final moral issue under consideration here is ‘sound management.’ Altogether, there is debate about the sustainability of the system as has existed as of the mid-2000s. Representatives of corporate business maintain that ‘private pensions have helped millions of individuals save successfully for their retirement and will do so in the future.’40 Experts from the financial sector hold a similar view. Irrespective of some shortcomings attributed to excessive public regulation (see below), they see the pension market offering excellent returns on investments, provided plan holders, or plan managers, take wise decisions such as buying into hedge funds or diversifying the asset portfolio. Further, they recommend that savers ‘ride out any stock market volatility.’41 Regarding deceptions about expected profits, an expert linked to the pension industry holds ‘the only “pension crisis” was in workers’ hopes of their future income,’ and some journalists maintain that difficulties in the corporate pension sector affect only a comparatively small proportion of the population.42 Following these comments, the invisible hand of the market provides the best achievable outcomes for the majority of savers, while the decline of schemes guaranteeing final-salary-related pensions is unavoidable, given (amongst other things) the overall ‘enhanced competition between businesses.’43 More sceptical voices, however, are raised as well. Many journalists cast doubts upon an overall revival of the stock market and express concerns over excessive risks associated with the widespread propensity of investors to rely on assets in hedge funds or residential property. More generally, most

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commentators agree on the pension system being overly complex, if not ‘chaotic.’44 Referring to the functioning of the market, the aforementioned government consultant deplores that, in the existing pension landscape, ‘the cost of advice, and of regulations ensuring that it is good advice, in itself significantly reduces the return on saving.’ Trade unions, consumer associations, and advocacy groups even put forward that the pension industry is ‘simply not fit for the purpose of meeting the nation’s pension needs.’ Pensions, it is said with irony, have come to rely on a ‘pray-as-you-go system,’ given their increasing dependence on volatile stock markets.45 Employer associations concede that retirement provision contingent on the dynamics of financial markets may prove unfair. Journalists hint at the widespread fear among savers about stock market volatility and evoke the danger of a dramatic slump in retirement provision. They state that many money purchase (DC) schemes are in negative territory, and black holes are prominent in corporate pension provision. Many suggest a ‘general lack of trust in the insurance industry,’ an opinion widely shared by consumer organizations and charities.46 The protection scheme instigated by 2004 is reported to be under strain, and pensioner groups cast general doubt on the system when maintaining that ‘the private pension industry has been dogged by corruption, scandal and mismanagement’ and that ‘even the solid rock of occupational pensions . . . has been hit by a landslide.’47 Ineffective regulations are also a concern for critics of the public tier, especially its means-tested Pension Credit. For example, a charity argues that means-testing is an inefficient mechanism as it ‘costs 10 times as much to administer as the basic state pension.’ Such assessments imply that the major aim of public pension policies is to provide a guaranteed retirement income to all citizens, which would prove realistic if an efficient mode of benefit delivery was applied. While representatives of corporate business remain sceptical, claims for a more generous basic state pension are endorsed by representatives of various organizations and by many journalists. Few dare to present precise figures, yet some argue that all depends on the political will of the nation. According to an expert representing a reputable think tank, ‘if we are willing to pay for it, then anything is affordable.’48 Elderly Care Compared with pensions, elderly care is less topical in the public debate throughout the period under consideration. Nonetheless, developments in the care system provoke various comments from many sides. Regarding the issue of deservedness, these comments revolve around the question of free care for all. Charities, think tanks, academic experts, and journalists participate in this debate. Charities are campaigning strongly against fees on personal care, which they see being imposed on users arbitrarily and with the danger of excluding citizens from services. ‘Fairness requires nothing less than the abolition of charges,’ so the argument goes. Branding the assess-

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ment and charging procedure as incoherent, charities assert ‘it’s criminal how many people fall through the net.’49 This is at times endorsed by think tanks and academic experts. While the former hint at risks associated with biased decisions on fees, an editorial written by a professor of health policy asserts that elderly care has been inappropriately withdrawn from the remit of the NHS, which, as a matter of principle, is free for all. Some journalists agree with this, arguing that the present NHS ‘discriminates against older people with chronic and long-term illness’; in their eyes, a universal care system, giving all citizens ‘freedom from fear and a new security in old age,’ would be justified as senior citizens duly ‘contribute to their care as pensions . . . are absorbed.’50 A further interesting statement comes from a representative of the Conservative Party who argues that the middle classes rightly expect to be eligible for free care ‘after a lifetime of paying taxes.’51 Such statements suggest that influential voices deem frail elderly citizens entitled to a guarantee of care irrespective of their personal situation. Although these voices do not refer per se to the older generation deserving societal support, they do allude to the virtues of universal health care as part of the cultural heritage of Britain. However, other standpoints come out as well and more vigorously. They are reflected in comments that chime much more with a further rationale underlying the British welfare state: A journalist, for instance, argues it is inappropriate ‘to protect the assets of the better off at the end of their lives so that their fortunate children can inherit them intact,’ as this would run ‘against the interest of the poorer majority.’52 From his perspective, it is the poorest that deserve public support, not the elder generation as a whole. This is consistent with suggestions according to which the risk of frailty should be met by private insurance, with the implicit consequence that only those embarked on a private plan deserve full care provision (see below). On the whole, the notion of deservedness is addressed only implicitly and at the margins. By contrast, the issue of dignity appears essential to the public debate. A prominent—and controversial—topic is improper treatment of elderly people. In home care, a journalist argues, senior citizens are ‘distressed by fleeting, unfamiliar low-paid agency faces, never staying long enough to know the people they care for.’ There are numerous press reports on poor care in residential homes. Many frail elderly people, these reports suggest, suffer from discrimination, lack of respect, and abuse, ‘namely, bullying, neglect, humiliation, and the infliction of petty indignity.’53 The problem is widely acknowledged: Provider and professional associations admit there are problems due to low-skilled staff, and think tanks criticize a society-wide prevailing ‘deficit model of old age.’54 Consumer associations assert that frail senior citizens lack accessible and reliable information and are ‘frequently misled by complicated contracts’ when entering into residential care. The press presents an official report that found ‘the information and advice from care homes and local authorities lacked consistency and clarity.’55 This affects the question of dignity

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in relation to the roles of both (potential) welfare recipients and care consumers. Regarding the former, journalists take issue with restrictive rules imposed on elderly people choosing direct payments and with unjustifiable charges on residents of care homes, given that long-term nursing care is free. Many users, it is argued, are ‘wrongly forced to sell their home, or wrongly denied benefits’ and ‘many do not even know that they have been cheated.’ Experts such as the Health Ombudsman appear to agree with this.56 Charities advance a similar point, deploring that ‘older people are being treated as commodities.’57 These statements address the role of users in the care market. Critics hold that, after all, the elderly are denied true choice by public care managers, especially following hospital discharge.58 Others are less sceptical. For instance, an association of for-profit providers argues that many citizens are able to make informed choices about quality; a representative of a social service department expects that the customers of the sector will soon become ‘co-architects of care.’ A minister concludes: ‘Independence equals dignity.’59 Consumer rights are also at issue with respect to long-term care insurance. Consumer groups and journalists express concerns over possible mis-selling scandals in this business, run by ‘commission-hungry salesmen’ who ‘fool vulnerable pensioners, raising unrealistic hopes and glossing over the risks.’60 Consumer dignity is an issue, although its interpretation proves varied. This connects with the moral issue of responsibility, which finds large press coverage in debates over elderly care. Very often, society as a whole is blamed for being indifferent towards the frail elderly. Journalists attribute this to a culture which ‘stuffs old people far from view, and rams them to the bottom of their list of priorities.’ While some refer to problems experienced by the socalled sandwich generation caring for both children and frail senior citizens, there is a general plea for greater societal recognition for family carers and volunteers. This is endorsed by major charities.61 However, comments addressing the responsibility of government are more frequent, with the state often being assigned a lead role within the care system. Charities, trade unions, and consumer associations deplore the underfunding of care services, and associations of (for-profit) providers urge the government to inject more money to attract better staff.62 Journalists blame public policies for aiming at ‘saving money, cutting corners, squeezing and downsizing with a cheaper service that pays its staff less.’63 These beliefs extend to incorrect assessments conducted by social service departments which are also accused of creaming off money from their elderly care budget for diverting to other purposes. From this, claims for national eligibility criteria and assessment guidance are inferred. Regarding alternatives to the lack of funds, one suggestion is to resort to more fiscal revenue. A journalist argues that ‘if inheritance tax were raised by enough to cover the cost of universal free care, it would pool the risk and ensure the burden fell fairly on the heaviest shoulders.’64 Others, however, advocate greater individual responsibility, including for funding elderly care (see below).

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A further controversy is about over- versus underregulation. An academic expert argues that local authorities have passed the ‘problem of lack of money to the independent sector by negotiating tight contracts, which, in turn, affected terms and conditions of service for employees.’65 Provider associations, including nonprofit networks, take a similar stance when complaining about overly restrictive standards imposed on their corporate members. They deem ‘rigid regulation’ responsible for the pressure on quality, and for the care home owners ‘struggling to maintain’ their services. This is at times endorsed by journalists.66 These complain about ‘shoddy supervision’ of the elderly care market; some even lament ‘unhealthy friendships . . . between inspectors of homes and home owners.’67 In the same vein, charities contend ‘regulators still don’t have a wide enough range of enforcement powers.’68 This echoes concerns over irresponsible behaviour of home care providers in the private sector. Charities call it a scandal that ‘homes are closing because owners are selling them off to property developers or finding better ways to make money.’ At the same time, journalists observe ‘those who got rich in the privatization goldrush of the eighties now arguing that the state does not put enough money into residential care.’ This is endorsed by a campaigning group consisting of workers who previously worked for a private care company: ‘It‘s all geared towards profit, which produces a conveyor-belt of misery.’69 By contrast, provider associations see themselves as responsible businesses and victims of mistaken government policies. There are also communications putting the onus on individuals and their way of coping with the risk of care dependency. On the one hand, volunteering is highly valued in the press. Journalists enthusiastically present organizations making lay people participate in the care process, hinting at the ‘“added value” aspects of voluntary-service provision’ and the ‘vital role in home care, with volunteers running [for example] errands for home bound people.’70 A further article praises a charitable trust with its ‘network of volunteers across the country’ demonstrating that improving the quality of life of older people should not be confined to health and social care. In the same vein, newspapers launch charity awards for lay initiatives, including those for the benefit of the frail elderly.71 On the other hand, journalists blame citizens who ‘bury their head in the sand in the hope that it won’t happen to them.’ They present private long-term insurance or ‘impaired life’ annuities as a reasonable solution: ‘With an annuity in place, you should be able to rest assured that your fees will be met and you won’t have to move home at any stage.’ Financial advisers recommend readers to shop around for the best deal, arguing that ‘it is a myth that we live in a cradle-to-grave welfare state. The reality is that the majority of people will be responsible for their own care funding.’72 A think tank, however, deplores the ‘dearth of financial products that consumers could use.’73 Many call for the government to improve elderly

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care provision, but the option of private insurance as a way to meet future demands remains under debate. The use of private insurance relates to the issue of sound management. Market governance in elderly care is one subject under debate. As noted above, a range of commentators deems private insurance a suitable mechanism for regulating entitlements to long-term care. This is also the implicit message of the aforementioned financial advisers’ recommendations. However, journalists report insurance plans being closed due to plunging stock markets and slackening sales. They also hint at the problem of widely varying, and sharply increasing, premiums and argue that ‘most financial advisers are not qualified to advise on this area.’74 Overall, the issue is not very salient. Rather, the discussion of market principles relevant to the management of the care system centres on the functioning of quasi markets. As noted earlier, care recipients are often seen as discerning welfare consumers. An association of for-profit providers, for instance, argues that ‘a large proportion of the population in need of care and support services will be able to make informed choices.’ Some journalists explicitly welcome private care provision and maintain that ‘private care homes must make money to survive.’75 A representative of the nursing home industry contends that it makes sense to him ‘to beat private competitors on price’ but refuses a system based on private insurance (which he sees prevailing in the U.S.), as such a system is ‘wasteful and over-medicated.’ In line with this statement, charities bidding for contracts on quasi markets stress their particular contribution to the well-being of frail senior citizens.76 The market, then, is viewed by many as a means of ensuring ‘good care.’ Less enthusiastic comments on market governance in elderly care come up as well, however. Competitive elderly care provision is sometimes deemed a ‘business to make a quick buck rather than to provide a social benefit.’ A critical journalist puts it like this: ‘You can‘t run places which rely on human interaction . . . with customers who can be extremely demanding and difficult to a set of pre-agreed targets.’ Consumer Associations are not far from this when they brand the care homes market ‘dysfunctional,’ while a think tank contends that it is a ‘market that is failing and needs to be improved.’77 One important stumbling block is governance through tools inferred from New Public Management. Journalists report on malpractice of local authorities in performance measurement while associations of care providers blame them for ‘financially driven assessments.’78 Furthermore, a much debated issue is fines on social service departments causing delays in hospital discharges. These fines are deemed counterproductive by representatives of local governments, trade unions, and journalists. An academic expert holds that ‘fines could undermine the rights of older people to choose their care home.’79 Added to which, market regulations are deemed by many to work insufficiently. There are concerns over ‘ineffective’ inspection procedures

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(based on a mere tick-box approach) and ‘wrecked’ norms imposed on providers concerning the training of their staff and other minimum standards. For instance, a journalist holds that the national inspection body ‘remains strangely ineffective’ and that it is ‘well-meaning but weak and inconsistent,’ due to problems handling its existing workload.80 Altogether, while some argue market regulations meet the interest of welfare consumers and provide adequate outcomes, others take issue with (possible) collateral effects such as home closures and insufficient control over quality. Implicitly, choice for many and guarantees for all appear as concurring priorities. As with pensions, the overall picture disseminated is of a system in crisis and affected by ‘inconsistency in both the cost and availability of care services’—services deemed at the same time to be not ‘sufficiently reliable and flexible.’81

5.2.2 Canada Pensions In Canada, press coverage of subjects concerning the pension system over the period under examination appears quite patchy.82 Nonetheless, a wide range of communications addresses the moral issues of interest here. It is noteworthy that these are at times influenced by provincial particularities concerning the viewpoints of the actors involved and incidents prompting their comments. Thus, the following analysis pertains to discussions at both the federal and the provincial level, with a focus on Québec and Ontario. Although the notion of deservedness is barely employed in the (recent) pension debate, it is implicitly addressed in reports on the corporate and private pension pillar. First of all, financial experts comment on what will happen to accrued assets in times of turbulent financial markets, a subject of particular interest given the importance of funded schemes in the Canadian pension system. Many of them firmly assert that, irrespective of volatile financial markets, investments in private pension plans (will) prove sustainable (see the elaboration on ‘sound management’ below). Implicitly, this appears as a signal sent to those who understand pensions as earned entitlements but worry about a drop in asset value. Some, however, cast doubt on this outlook. For instance, a representative of a public pension fund argues that ‘even though having worked hard . . . those who retire in the next years will have to accept a living standard inferior to the one of those who went ahead. Life is full of injustices, and that is one of them.’83 This chimes with a second line of argument. The press reports on the findings of a think tank studying current corporate pension plan management, summing up that ‘workers delude themselves when thinking that they don’t take any risk.’84 The underlying bedrock question is the future of defined benefit plans. Some financial experts frankly predict the end these schemes;

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others suggest that they will continue to provide deferred wages. Most of them, however, contend that pension provision will depend more heavily on the performance of capital investments. Following these suggestions, the loss of (faith in) retirement income based on one’s professional career has to be compensated by risky pension investments. Having said this, the preservation of earned entitlements remains an issue. For instance, there is concern over inequities between those with life-long employment and those leaving a job after a few years and losing accrued savings. Moreover, some experts are calling for clarification concerning the use of surpluses accrued by corporate pension funds, as the latter are assumed to have pocketed profits in the past.85 Referring to lawsuits brought by workers complaining about that, journalists report on management experts getting ‘nervous that we, or our government, will require employers to pour in all of the extra money needed to make up stock market losses and low interest rates, then give to us any surplus funds that could appear should things improve.’86 Furthermore, the press reports on initiatives of workers claiming surplus control, with support from pensioner groups and trade unions. According to the latter and their political allies, citizens should receive ‘decent pensions so that they don’t have to work until their heart stops beating.’ Moreover, unions oppose plans to postpone retirement age as this is understood as a denial of the overall pension promise: ‘It’s not just about money . . . it’s about reciprocating the loyalty of people who worked long hours for their company.’87 This connects with reports on industrial action for better pensions, and often against the transformation of DB into DC schemes.88 Journalists seem to understand these concerns as they take issue with plan closure or a sponsor’s bankruptcy, implying in some cases that retirees are ‘bereft of a third of their pension.’89 It appears, then, that there is pressure on the corporate pension pillar to ensure accrued savings in line with the workers’ achievement. Regarding the public-pension sector, the debate concentrates on the contributory scheme’s investment strategies. Against the background of a volatile financial market—on which the second pension pillar largely depends—representatives of public pension funds stress that state pensions will continue to guarantee basic retirement provision to elder Canadians. Plan managers are denoting losses in the fund’s assets as ‘episodic,’ but some journalists have a critical eye on the public schemes by pedantically reporting on their balance sheet, mostly negative in the years under review here.90 Obviously, the guarantee of paid contributions is an essential issue—in other words: earned entitlements matter. As regards the issue of dignity, several aspects appear crucial. First, there is concern over poverty among the elderly or future retirees. Trade unions and campaigning groups take centre stage here. For instance, they deplore that welfare claimants (in Ontario) must eat up their savings for old age, thus turning ‘a setback into a disaster.’ A further worry is the proliferation of part-time and seasonal work as this means, according to a trade unionist: ‘no

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pension plan.’91 Moreover, a deputy is reported to have supported retirees in a lawsuit against the public pension scheme, accusing the latter of having left them in ignorance over their minimum pension entitlements. As a result, the (then) party in government felt urged to increase basic pensions. In addition, there are reports on pensioners’ groups engaged in a further lawsuit, this time against an employer having frozen his pension commitments for ten years, with a representative of these groups declaring that ‘this rally is about justice and this rally is about dignity.’92 Speakers express indignation about corporate pension entitlement being withheld. On the other hand, the question of dignity touches upon the selling of saving products. On this point, journalists deplore that citizens in quest of sound saving vehicles are being misled by the pension industry during what is termed the ‘hunting season’ of the business.93 Furthermore, a think tank, commenting on the industry’s practice of cajoling low-income earners into saving plans, speaks of ‘misleading advertisement’ and ‘betrayal.’ In the same vein, a financial expert concludes that ‘a majority of Canadians has been badly advised on this stock market during the 1990s.’94 Apparently, the biased treatment of those privately saving for retirement is being discussed in moral terms. Consumer dignity turns out to be a notable issue. Having said this, it is the subject of responsibility that raises most attention in the public debate. A first case in point is political actors and pensioner’s organizations calling for greater individual freedom when it comes to the preparation of retirement. This especially pertains to the abolition of mandatory retirement, at issue in Ontario. An official presiding over human rights commission, elaborating on the rationale behind this measure and related consequences for choices on retirement and pension planning, holds that this measure at last enables ‘individuals to make these decisions for themselves.’ While trade unions object ‘that the elimination of mandatory retirement simply lets the government off the hook when it comes to ensuring that people have adequate pensions,’95 journalists argue that citizens should have the possibility to top up poor pensions in the case of insufficient retirement savings or incomplete careers, maintaining for instance that ‘many baby-boomers . . . will be staring down retirement with children still in college or in university. And a comfortable retirement has become a pipe dream for many people who lost their savings in the stock market bust.’96 Secondly, the financial services industry takes centre stage with comments on the average citizen’s strategies for saving. Referring to survey data showing a reluctance of women to invest in the stock market, one expert deplores that ‘women see money as a pool that can only be depleted . . . . Women expect a high rate of return earned with less risk. . . . It’s unrealistic.’97 Overall, citizens are invited to purchase financial products courageously and then made accountable for the retirement income finally achieved: ‘Bye bye retirement . . . because of a bad strategy.’98 Employees, it is argued, ‘should

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take a more entrepreneurial approach to their pension money and think of it as a real business.’ A further expert maintains individual investors have learnt their lessons after the stock market crisis and are now ‘less gourmand and more prudent.’ Journalists often adhere to this reading and recommend that savers ‘allot a large section of his or her assets to stocks.’99 In these statements, the chief responsibility appears to rest upon the individual. At the same time, however, there are concerns as to whether ordinary citizens are in a position to meet this challenge, with many lacking the required financial education. A financial expert infers from this that ‘the state, intermediary groups and all remaining agencies that support the elderly must rapidly improve the present and future retirees’ skills.’ Others argue that financial services agents have their duties as well: ‘I invite financial advisers to make themselves responsible . . . . An important job of education has to be done concerning what pensions may bring and how their retirement should be prepared.’100 Journalists blame the pension industry for having neglected this responsibility, putting the onus on financial advisers ‘who should have known better, but who encouraged their clients to try to ride the bubble in the sky.’101 Apparently, it is widely acknowledged that individual responsibility must be set in context. A further subject is the responsibility of pension fund managers. Critics especially tackle their investment strategies during the stock-market mania: ‘CEOs to blame for pension fund crisis.’102 Other articles draw attention to the prime minister (in office at the time), who is blamed for the ‘collapse of a pension plan for workers at a bus company he half-owned’—a political scandal, it is said. Moreover, the press reports on Greenpeace campaigning to make the investment strategies of pensions funds more ‘socially responsible.’103 A further issue is the investment policies of the public pension scheme (the CPP) which holds shares, for example, in the tobacco industry. This, a journalist argues, ‘imposes massive costs on our health care system and cuts into national productivity because smokers tend to be sick more often and miss more work. These huge costs to society, moreover, far outweigh any extra return that the CPP makes on its tobacco investments.’104 The public regulator replies that the ‘legal mandate which is to make the CPP’s funds bear fruits as best as possible’ at times implies ‘considerable social issues which arguably go beyond our possibilities.’105 Thus, the accountability of those who hold the public pension pillar in trust proves a controversial issue as well. The press also addresses the responsibility for a sound oversight over corporate retirement schemes. The regulator is reported to have committed himself to a more ‘activist and interventionist’ strategy against the background of corporate pension funds running into deficits. Journalists inform about various initiatives supposed to make the sector’s regulation sounder.106 This is paralleled by trade unions and their political allies calling for public intervention in cases where corporate pension plans are running aground. Centre-left politicians campaign for the instigation of a guarantee fund and

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a law ensuring the indexing of corporate pensions to inflation. Moreover, articles about industrial action for more (public) protection of pension entitlements are prevalent. According to these comments, the state ought to be an active player in corporate retirement provision. This connects with questions on sound management. A first subject at issue here is the future of the public pension pillar. Trade unions see the CPP as an effective means of securing pensions, as do politicians stressing that this is ‘the most safe and most stable source of revenues for the majority.’ The preference for schemes providing guarantees to all is obvious here. It is argued, however, that, given the patchy coverage with private provision, public provision needs new impetus as the objective is to maintain living standards for all after retirement. Unionists fear that ‘many Canadians are worried about how they’ll pay the bills and buy food once they pass age 65.’107 Such concerns also embrace doubts about the management performance of the public schemes. Journalists report on investments of the Québec pension fund having come under scrutiny, with this entailing new legislation about the fund’s governance.108 Furthermore, the press reports about a right-wing think tank saying that Canadians work half of the year just to pay their taxes, the latter including contributions to the Canadian (and Québec) Pension Plan; the implicit message is that they pay a lot without getting a great deal. Another think tank warns that younger Canadians ‘are not confident the CPP will be available when they retire.’ In the same article, a journalist, however, maintains that ‘saving in a registered retirement savings plan to replace government benefits would be costly.’ Overall, many hold the view that ‘Canada Pension plus Old Age Security are not going to guarantee a worry-free retirement.’109 Representatives of the pension fund admit ‘the risk of the plan’s manager has grown.’ It is argued that, as ‘the Canada Pension Plan continues to shift towards riskier—and potentially more lucrative—investments, Canadians shouldn’t worry that their nest eggs are in jeopardy . . . despite what the people selling private retirement funds might want to make them believe.’110 However, this does not seem to dispel the aforementioned concerns. Having said this, private pension provision is often considered to be managed unsoundly as well. Financial experts and journalists warn against corporate pension plans being heavily underfunded, with company schemes prone to ‘create a false sense of security.’ While some see few chances that stock markets help re-equilibrate the balance sheet, others argue that the stock market will yield satisfying results for pension schemes in the long run—provided that public regulation leaves scope for this. Thus, it is argued that the aforementioned ‘ongoing debate around surplus ownership creates disincentives for plan sponsors in fear that surpluses will be apportioned to members while deficits are generally viewed as the sponsor’s responsibility to correct.’111 One expert considers pension plan underfunding as an ‘aberration that will neutralize as the market comes back,’ and a colleague

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of his holds that ‘markets don’t always just go up—they zig sideways . . . so people shouldn’t be concerned by that whatsoever.’112 Overall, the financial services industry expresses confidence in the investment policies of pension funds, with the latter being seen as ‘independent players who aren’t going to get into anything stupid because they have to be able to pay pensions.’ It is also argued that, following the stock bubble, plan managers ‘have done their homework and found a new safe haven,’ for example, through focusing investments on public infrastructure.113 Some financial experts, however, hold that citizens should not rely exclusively on the established ways of retirement provision. They argue only risky investments yield the outcome required for maintaining living standards after retirement. Journalists explain the rules of the game. ‘For those who might have wanted to save . . . aggressively,’ one of them argues, ‘the recent plunge in stock markets made things worse.’ On the other hand, those with ‘good pension planning,’ for instance investors taking an immediate lump-sum payment after a job change, ‘give themselves a fighting chance to better their retirement prospects. . . . Although it is by no means a certainty, they may be smart enough or lucky enough to earn superior investment returns.’ 114 Thus, sound management here equals a system offering the best chances of delivering profits. Elderly Care Developments in elderly care find considerable press coverage across Canada. Concerning the moral issue of deservedness, the notion is alluded to mainly in two ways. Firstly, elderly care is often understood as being engrained in a generational contract (like pensions). The comment of a care worker on ill-treatment in residential provision is emblematic of this: ‘We wouldn’t allow that to happen to our children; we have to stop letting it happen to our parents.’115 Secondly, the press provides several accounts of public communications centring on the question as to which extent elderly care should be seen as an integral part of the health care system and its normative codex—which is largely consonant with a social rights approach. Having said this, the issue of dignity is much more prominent. It sometimes overlaps with the aforementioned social rights approach, as exemplified by a journalist positing that frail senior citizens ‘deserve dignity not pity.’116 A crucial subject in the public debate is dreadful treatment in residential and (less frequently) in home care. Outcries are loudest when it comes to mistreatment in nursing homes. One newspaper dedicates a long series of articles to this subject, presenting data and stories providing insights into existing problems and grievances in the province of Ontario. In Québec, too, neglect of nursing home residents makes the headlines. Although the main subject is shortage of staff, some see in the maltreatment of the frail elderly an expression of society-wide ‘ageism.’117

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In this debate, comments of both trade unions and nonprofit provider organizations are given considerable attention in the press. A union campaign in Ontario is presented to run under the headline: ‘Dignity is a minimum standard,’ with unionists calling for better funding and better inspection of care services.118 Nonprofit provider networks largely support this proposition, disapproving of the quasi-market regime and the devolution of contracts to for-profit-agencies. By contrast, associations of commercial care agencies, although agreeing that more funding is needed, contend that they do not see this regime constituting a threat to the dignity of care recipients. Politicians reply to these queries by maintaining that senior citizens must be enabled to look forward to living out their final days in ‘quality and dignity,’ with widespread ‘disruption to patients and staff at home-care agencies’ as a primary concern.119 In a similar vein, newspapers in Québec report on government promises to ‘examine the situation of the elderly’ in order to assess if they ‘live in dignity.’ Officials working in public administration share this conviction; thus, the ‘protector of users’, kind of ombudsman appointed by the government of Québec, is calling for a tougher inspection system in residential care.120 Apparently, the dignity of care recipients, in their quality as citizens in need of human attention, is at the heart of the public debate about elderly care in both provinces under study here. Taking the example of domiciliary provision, a journalist from Québec deplores that ‘the respect and the will of a person losing its autonomy is constantly compromised’ because home care services are underfunded. The result, he argues, is little choice over the way home care is provided. This connects with the issue of consumer dignity which, on the whole, is addressed by the press more implicitly. The issue is briefly raised in the debate over the virtues of private long-term insurance. A journalist reporting on experiences of plan holders, for example, raises ‘concerns about the company’s slow handling of claims and the ultimate value of the policy.’121 A further point is critique expressed of care providers from the for-profit sector. For instance, the press reports on the case of residents being ‘shaken’ by a care home director’s decision to raise rents for accommodation in line with the increase of public subsidies earmarked for housekeeping support.122 Moreover, critics of the quasi-market regime in Ontario hint at the lack of choice within this system. Altogether, consumer dignity matters—without being topical, though. This is very different in the case of questions relating to responsibility, raised by innumerable communications. A key subject is the role of the state. Trade unions blame the government of Quebec for a ‘smooth privatization’ of the care sector, due to its refusal to inject more money into public services. A similar point of view is expressed by a network of lobby groups campaigning against the ‘heavy responsibility’ imposed on families. Moreover, the ‘Association des CLSC,’ the provincial federation of the public care agencies, accuses the government of reneging on the promise of stronger public investments in elderly care. An academic expert working for the city

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of Montreal asserts that the home care sector in Québec is in a situation between ‘the deplorable and the catastrophic’ and calls for additional public efforts. The article concludes by claiming that ‘the government cannot denounce solidarity with these populations.’123 Moreover, a social worker commenting on current problems in the care sector of Québec holds that, at times, ‘vulnerable persons are required to get along on their own and to take an initiative for making their home care feasible’—without automatically being able to do so. All these statements suggest that the provincial government is widely seen as a lead agency in the care system of Québec. The situation in Ontario appears more complex. Commenting on bad practices in residential care, officials of the province argue that providing change ‘is a responsibility that we share, as a government, with long-term care providers and community members.’ Joint responsibility, rather than a lead role of government, is the message here. Associations of commercial care providers agree to this vision of a limited state responsibility. As a reaction to the aforementioned reports on maltreatment, they, however, welcome ‘accountability reforms which we think will strengthen the public perception.’124 They also advocate more transparent procurement policies in the home care sector. At the same time, quasi-market-based contracting-out policies in the home care sector are assumed by many to ignore the particular needs of vulnerable elderly people. Charities and user groups demand a stronger commitment of the provincial government in order to ‘make a home a much better home.’125 Nonprofit home care providers accuse public authorities of ‘clearly rigging’ the competitive process in favour of large provider organizations and of ‘cutting out locally based agencies.’ From their perspective, the public-private partnership is profoundly biased. In a similar vein, centreleft politicians express critical views on the quasi-market regime, terming it a ‘full frontal assault of privatization in home health care.’126 Some journalists and experts share these concerns. A journalist refers to frail elderly people ‘weeping about a lost lifeline’ because their home care provider lost its contract.127 In such statements, the state is unequivocally requested to reconsider its policies. Frequently, though, the debate concentrates on the range of state involvement rather than about governance issues. An article devoted to the topic of ‘Why Canada should focus more on home care’ argues that public authorities will have to intervene much more extensively in the future, given that thus far they assume less than 10 percent of the care load. This resonates, in both provinces, with worries about too great a burden being imposed on natural carers, that is families and especially women. A manager of an Ontarian family association maintains that he sees ‘caregivers hospitalized, while their parents get better.’128 In the same article, relatives of older persons are advised to search for private solutions in good time, including ‘discussing financial resources for future care.’ This is consistent with academic experts challenging families to review their overall saving budget in order

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to plan for a potential care dependency in the future. The question one of them views as essential when discussing the future with elder relatives reads: ‘How much money do you have, how will I support you in old age?’129 This connects with the issue of private-long-term care insurance, raised in a number of press communications. Several articles set out how such schemes are working and why they may be of interest. A representative of the insurance industry of Québec declares the latter is ‘ready to take over the government’s place’ when it comes to the funding of home care. In addition, there are voices pleading for the generalization of direct payments. In an article titled ‘About Responsibility,’ an expert rooted in economics enthusiastically presents a United States-American model of direct payments through which frail senior citizens (allegedly) become masters of their own caring plan.130 Thus, ideas on greater individual responsibility matter in the media debate, with critical voices being prevalent, however. Importantly, moreover, the issue of volunteering is raised by a range of articles. For instance, journalists portray a number of lay initiatives in Ontario. These include traditional (benevolent) charities, lobby groups campaigning for better care, and municipal agencies working with volunteers. One article presents the case of an old people’s home providing both ‘an astonishing array of professionally programmed . . . services’ and scope for the participation of lay helpers.131 In Québec, the particular role of the self-managed ‘social economy’ in the field of elderly care is mentioned in an article titled ‘Utopia against fatalism.’ In Ontario, the press also reports on a controversy over the role of volunteers which many consider as being overemphasized by a government seeking economic solutions for residential care.132 This leads to the issue of sound management. Most speakers show little interest in private long-term insurance plans as a means of ensuring a sounder management of the care system. Though such plans are occasionally presented as an alternative to public provision, the privatization of the funding regime is not a big issue in the public debate. The status of care providers, and the related mode of governance, is of far greater importance. A number of commentators take issue with elderly care delivered by commercial firms. This firstly holds for commentators rooted in the care industry. Employees of care homes argue that ‘long-term care should be operated by non-profit facilities because no one should be making a profit on vulnerable citizens.’ In the same vein, a (nonprofit) care home manager asserts that ‘the mandate of for-profit organizations is to operate profitably—care of clients will not be their priority.’133 In Québec, a charity (the Alzheimer’s Society) advances a similar point of view: ‘Private homes, their raison d’être, that’s making money, and not ensuring optimal care.’ Moreover, a network of nonprofit providers in Ontario argues that ‘for-profit nursing homes cost [the] province more.’ The same voices complain about a ‘destructive competitive bidding process’ in the home care sector. Some journalists underline this reading. If the government in Ontario has favoured private service provision

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in the past, one of them argues, this was due to the political sponsoring of huge long-term care companies, causing the ‘fundamental scandal of big corporate money used to skew public policies.’134 This contrasts with the opinion of an academic expert on health, according to whom ‘the private sector can play a major role for the maintenance of our health system,’ including elderly care in the residential sector.135 Others advance similar arguments. Referring to concerns over competitive bidding, one journalist challenges the viewpoint according to which the latter is destructive per se, advocating, however, ‘innovative ways to bring more stability in the system.’ Closer inspection is welcomed as well, since ‘enforcement works.’136 A related question is addressed in statements about the public-sector-dominated care system in Québec. Commenting on the promise of the provincial government to inject more money into this sector, one journalist warns against wasting public resources by a simple increase in the sector’s budget. Instead, he vows ‘performance first’ through a series of measures including internal contracts and indicator-based evaluations. Others refer to quasi-market regulations as an effective means of meeting the demands of users, arguing that they will ‘empower consumers of long-term care services’ much better than new public interventions or inspections.137 With regard to the quality crisis in the residential care sector, moreover, several articles refer to United States-American experiences with nursing home rating which is publicly accessible. Private provider organizations and their federation, commenting on the quasi-market regime introduced in Ontario, argue that ‘the new system is more transparent and rigorous, more accountable, and has led to clearer standards . . . and expanded and more flexible hours.’ Moreover, the federation posits that the province ‘needs a transparent, open and fair purchasing process to choose home care providers who are able to deliver the best quality care at a responsible cost for the public.’138 The private sector draws on hopes of the widely shared interest in containing public funding, but a number of articles report on extraordinary profits realized by stock-marked-traded companies busy in the elderly care sector. Some admit that the management agenda is infused with trade-offs. Thus, a journalist concedes that ‘no one likes the idea of forcing citizens to move against their will. However, if Canada’s health-care system is to survive, this is the sort of tough and rational decision that must be made.’139 Referring to the quality of residential care homes, a politician, minister at the time, asks ‘why are some able to give good care with that [available, I.B.] money, while others are not’; his successor, however, argues that ‘lowest cost does not necessarily equal the very best care.’140 This debate reflects different perceptions concerning trade-offs to be made. Even though there are many critical voices on the collateral damage caused by market governance, hopes are raised that the latter can deliver, on the whole, acceptable value for less money,

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5.2.3 Germany Pensions Over the period under investigation, the issue of pensions was high on the agenda of the German press.141 Regarding the moral issues under study here, deservedness is alluded to in many communications even though the notion rarely occurs explicitly. A key subject is the future of the public pension system (the social insurance sector) against the background of an (assumed) lack of resources to meet impending liabilities. Moreover, with part of the system being privatized by the Riester-Reform, the implementation of the latter, as well as the future of company-based or individual funded pension plans, is frequently referred to in the print media. Representatives of the semipublic (nongovernmental) pension funds are given particular attention. Even as their style of arguing appears apolitical and infused with administrative jargon, they basically argue pension levels should not be reduced further as this might undermine the overall legitimacy of the social insurance system. ‘Retirees paid contributions for decades, and now they expect to get a pay-off.’142 This view is endorsed by trade unions, civic associations (representing pensioners), and also by some prominent politicians. Trade unions claim that the level of public pensions should be maintained. This especially refers to low-income earners deemed to ‘have the right to get a pension after a long working life.’143 Pensioner groups share this opinion: ‘Pensions are no bread of charity, but a right.’144 A leading member of the Green party (which had backed the Riester-Reform) concedes: ‘Many pensioners experience reforms as . . . a denial of their life-long performance.’ Some journalists agree, contending that ‘it is within the senior’s rights . . . to live on his hard-earned money.’145 Apparently, the logic of earned entitlements has a strong hold among these commentators. Others take a different stance, though. Considering cuts in the public pensions system as inevitable, they hold the public-pension sector will be unable to grant income to the retirees at the same level as previously. Academic and financial experts endorse this standpoint. A government consultant, professor in economic sciences, is repeatedly quoted for his sceptical view on the viability of public pensions. The latter, he argues, persist as a ‘basic guarantee’ whereas private saving will soon make up for a third of a retiree’s income. This appears as a widespread opinion. In a feature written for the most important German weekly journal (Die Zeit), the president of a prestigious institute of economics maintains that uncertainty about future pensions proves ‘inescapable.’ A similar discourse is held by think tanks.146 Some financial experts are even more radical when talking about how citizens should individually feather their nests regarding retirement (see below). The implicit message is that, whatever senior citizens deserve, they must accept considerably lower guarantees in the future and abandon the vision

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of earned entitlements: ‘Farewell to pensions securing our standard of living.’147 The question, however, is how this relates to communications concerning the private-pension sector. As this sector was marginal until the end of the 1990s, this discussion is still in its infancy in the period under review here. One point in the debate is that of jobless citizens being compelled to run down their savings before claiming unemployment benefits. Journalists pour critical scorn on this, arguing ironically: ‘Should you have saved, this is your own fault.’148 Implicitly, this echoes indignation at earned entitlements being withdrawn by the state. This point is also raised by communications on corporate retirement provision, widely deemed to fill the gaps produced by cuts in public pensions. There are reports on corporate saving plans being recast, with semi-DC plans replacing DB arrangements and employers withdrawing their (voluntary) contributions. Journalists argue that this makes corporate pension plans ‘luxuries’149 in the sense that most workers are no longer able to afford them. Moreover, representatives of a network of corporate pension plans take issue with taxes imposed on corporate pension benefits and argue that, under these conditions, private retirement provision might not generate the payoff required to compensate for the cuts in public pensions. Some (ex-) politicians contend a fully funded pension regime will endanger the indispensable ‘generational contract,’ because earned assets might ‘melt down’ on the capital market.150 These worries are, however, downplayed by financial experts asserting that risks are manageable (see below). Overall, there is concern over earned entitlements being jeopardized, with many viewing this as unavoidable, however. Regarding dignity, the second moral issue under consideration here, three different topics come to the fore. The first one pertains to the aforementioned reduction of public pensions. While some journalists state that currently ‘the highest risk of being poor is not taken by the elderly, but by the young,’ academic experts warn against future poverty risks and claim private saving should become mandatory.151 Trade unions take issue with the ‘scandal of poverty’ among future pensioners. This is backed by pensioner groups deploring that the bulk of future pensioners will fall back on (means-tested) welfare: ‘Meanwhile, we move towards social assistance.’152 A second point in case is the (alleged) ‘generational conflict.’ In the period under review here, German print media widely echo a number of popular essays published on this issue. When a young politician of the Conservative Party advocates special medical treatment to be withdrawn from the over 85s, the general reaction is broad indignation. In the eyes of a journalist, the overall debate engenders, among the elderly, ‘anger’ and ‘a latent feeling of being undesired and cumbersome.’153 A third topic is the treatment of savers by the new financial services sector. Journalists bemoan that many financial retail agents are reluctant to sell the Riester (funded pension) plan even though the latter proves advantageous for many low-income savers; they express disapproval of salesmen

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favouring a clientele ready to purchase more risky stock-market-based saving plans. Furthermore, presenting evidence of a series of incidents, they note a ‘danger of consumer manipulation,’ with customers being ‘the dupe.’ Life insurance companies are considered a major offender. They are blamed for mismanagement154 and for attracting savers by flawed interest rate calculations and by concealing the full amount of contract charges. A consumer association engaged in a lawsuit is branding the practice of life insurance companies as ‘legal betrayal.’155 What is at issue here is the dignity of the consumer, violated by businesses accused of disorienting investors. This connects with the issue of responsibility, particularly crucial for the public debate in Germany. Large sections of the media preach a novel mentality towards pensions, echoing statements from the financial sector and a range of think tanks. These actors enjoy considerable press coverage with general statements on the future of pensions. Contending that ‘”enforced solidarity” no longer works’, they present alternatives provided by the private sector. According to these voices, ‘people have to become familiar with the fact that they have options in retirement saving and that it is finally their own responsibility to see how their retirement will be financed.’156 Concomitantly, it is maintained that individuals should settle on how and how much they are personally willing to save for old age. Given the ‘maturity’ of today’s citizens, the argument goes, ‘everybody should do what fits best with his or her personal situation.’157 In addition, academic experts suggest that childless citizens have a special ‘obligation’ to accrue more private savings because, otherwise, they do not sustain the generational contract sufficiently. Others, however, express concern over the limited propensity of the population to invest in private saving plans. They also draw attention to problems citizens may face when embarking on private saving. ‘Our greatest concern is that the Riester-pension is sidestepped precisely by those for whom it would be of utmost importance.’158 Doubts are cast on the capacity of individuals to act as wise consumers, including by think tanks in support of partial privatization. The latter, while in favour of (more) individual responsibility, consider financial education as a core mission of schools and other public institutions.159 Many journalists are calling for better information on Riester plans, laconically stating that ‘we are all financial illiterates.’160 Frequently, corporate pension plans are seen as the perfect solution. This follows the discourse of major trade unions. These accept public pensions being partially replaced by funded saving plans, but they criticize policies that make corporate pensions liable to additional charges and, thereby, less attractive compared to individual saving plans. On this point, they are backed by employer associations deeming corporate plans subject to ‘discrimination.’161 Altogether, a system mix—which implies shared responsibility—is deemed to be the silver bullet to secure pensions.162 Implicitly, however, representatives of the public pension funds plead for leaving major responsibilities to

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the public-pension sector. Asked about how to ensure financial solidity, they prefer a rise in the retirement age over further steps towards privatization. The abolition of mandatory retirement is also endorsed by academic experts who argue that ‘it is individuals who can choose, with a funded pattern of old age saving which grants them liberty.’163 Although both public regulation and the dose of self-reliance imposed on citizens are subject to controversy, the principle of shared responsibility is widely being considered as a fair solution. A final category to be dealt with here is sound management. On this point as well, representatives of the public pension funds take centre stage. They contend that the public-pension sector continues to be run properly, ensuring the viability of this DB scheme: ‘There is no reason for sounding the alarm’; conversely, they do not consider private saving plans as a structural alternative since these schemes yield uncertain outcomes. A prominent politician (the former minister mentioned earlier), holds that ‘good old social insurance performs better’ than funded pension plans, alluding to the crisis of funded pension plans across the Western world.164 Some journalists seem to agree when shattering illusions about personal pensions: ‘Private saving plans are heavily praised. Yet premiums rise and pay-offs decrease’; they add that those who promise universal protection through private provision spread ‘untruth about pensions.’165 Such comments suggest that ‘sound management’ stands for a system that guarantees social security. Many others, however, view the public-pension sector as in the medium term being unable to maintain the existing level of retirement provision: ‘Pensions can ever less be provided collectively,’ a journalist argues, adding that ‘no doubt private saving is required to an increasing extent, given the obvious demographic development.’ The point here is the general payoff to be expected from a given pension scheme, with ‘private management’ being (at least implicitly) considered to work better. Most statements in that direction are more nuanced, though: ‘More private saving is urgently required. (Yet) Those who claim that private saving is better and safer than public pensions spread illusions. The truth is: several pillars are necessary.’166 In such comments, sound management stands for a compromise between reasonable payoff and basic security. The same spectrum of opinions surfaces among academics and financial experts. There are voices arguing that even the current mix will not work in the longer term so that those ‘who want security in old age . . . have to save on their own.’ It is said that public provision ‘will markedly fall’ and that conservative saving will not suffice to fill the gap. Pensions, the argument goes on, will unavoidably ebb and flow, with the result that ‘what finally comes out depends on the development of capital markets and of the fund manager’s skills.’167 According to this narrative, however, everyone has a chance to make money by wise investments in mixed bunches of assets, for example.168 The conclusion is that a public–private mix will yield sufficient security for pensioners.

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Many commentators, however, put the emphasis on an intermediate mode of pension governance. They consider the handling of private retirement provision as being sound only if consumer protection is strengthened and if plans are primarily managed at the company level. Even though corporate schemes are sometimes reported to be in trouble, the overall tendency is confidence in the firms’ capacity to cope with this, for example, through refraining from over-risky investments on asset markets. In particular, trade unions and employer associations deem corporate pensions to be the best solution to the pension crisis, even if these are remodelled according to a defined contribution rationale.169 Overall, then, there is a strong pledge for a middle way between collective guarantees and market reliance as the soundest way of managing the German pension system. Elderly Care During the period under review here, problems related to the German care system find enormous press coverage as well. Even though the moral issue of deservedness is rarely referred to explicitly, it appears highly relevant where questions about the viability of long-term care insurance are raised. Some experts and journalists cast doubt on the robustness of the insurance fund (see below); others defend the institution on normative grounds. Pensioner groups argue that sacrificing universal entitlements by an encompassing means-testing scheme would be a ‘sin against those who are dependent’; they also suggest that long-term care insurance should be completely wrapped up in the sickness funds. Some politicians and representatives of public bodies involved in the administration of the care system equally stress the insurance logic of the scheme.170 For instance, a leading representative of the German sickness funds highlights the ‘solidaric protection role’ of long-term care insurance, which he (nevertheless) sees based on ‘property rights.’ A colleague of his adds that ‘the very nature of insurance schemes is to provide protection against the occurrence of pre-defined events.’171 In such statements, entitlements to social insurance benefits are understood as rights, earned through personal contributions but embedded in a wider generational contract. This is consonant with the social insurance doctrine prominent in other pillars of the German welfare state, even though this doctrine is challenged by proponents of (additional) private insurance solutions to the funding crisis affecting these pillars (see below). Having said this, the notion of dignity is much more prominent in the print media. There is broad debate over current regulations and practices deemed to disregard human needs, especially in residential care, where reports on mistreatment and poor care quality are prevalent. Associations of nonprofit providers and pensioner groups take centre stage here. The former are reported as campaigning for new regulations combating what they label the ‘care disaster’; a slogan frequently used in this discourse is ‘Caring with dignity.’172 Pensioner groups blame public policies for underfunding

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services, leading to practices that ‘violate human dignity.’173 A major stumbling block is shortages of staff and the tightly earmarked time schedule agreed between the long-term care insurers and the provider federations. Trade union activists share this concern, arguing that the objective of longterm care insurance is to avoid ‘dependency leading into poverty’ but that it has failed in this respect.174 Journalists blame the system for letting frail citizens ‘mentally starve’ and for tolerating ‘shocking irregularities’ in nursing homes. Some also deplore that personal care increasingly has to be purchased privately.175 One observer comments: ‘Where human beings are categorized according to bands of dependence, and where care is evaluated with respect to mere costs, the achievement principle has triumphed over humanity.’176 Think tanks conclude that, on the whole, the frail elderly are cared for poorly. Academic experts assert there is ‘no need-oriented justice’ in the system. Drawing on these widely shared assessments, the president of a prestigious national research centre (for gerontology) espouses a ‘society-wide debate on the value of human life.’177 Altogether, then, the neglect of human dignity in the care system is a big issue, with widely shared concerns over the maltreatment of the vulnerable elderly. The dignity issue comes into play in a further sense as well. Pensioner groups advocate better quality assessments in the care sector, arguing that ‘care dependent people and their relatives have a right to learn about which home is adequately managed.’178 A manager of a nursing home owned by a faith-based voluntary organization holds that residential institutions nowadays face ‘self-confident customers’ who want ‘loving care but no patronizing attitudes’ towards them. This resonates with the opinion of a politician, a former minister of health arguing that quality markers, ‘commonly acknowledged in the field of consumer goods,’ are now also needed for social services.179 In the same vein, a number of articles report on initiatives aimed at introducing quality labels to enable users to make good choices among care providers. Apparently, the dignity of the consumer has become an issue in the German debate over elderly care (as well). This connects with questions concerning the issue of responsibility. Again, the discussion centres on the future of long-term care insurance. Representatives of the sickness funds argue that the long-term care insurance should not be expected to cover all the expenses incurring to the frail elderly. Sometimes, they espouse an increase in payroll contributions or federal tax subsidies to cope with this situation.180 Trade unions pose the rhetorical question ‘Do we want more solidarity or privatization?’181—a viewpoint shared by most networks of provider associations. While one of their presidents argues that the collectivity should only ‘pay for the poor,’ one of his peers critically notes that, given the increasing gaps between the insurances’ budgets and actual needs, ‘the risk of becoming dependent has been devolved back on the shoulders of the individual.’182 The federation of private suppliers blames the government for tolerating the spread of a

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grey care market entailing poor quality.183 Provider associations also welcome recent governmental initiatives aimed at ensuring quality standards in home and residential care, though they often hesitate to accept extensive top-down inspection. Experts want better quality standards and public oversight and sometimes a change in the funding schemes as well. Some suggest complementing the contributory scheme by more tax revenue; others plead for mandatory private insurance resourced by lump-sum contributions. Many journalists participate in this controversy.184 Altogether, there are high expectations concerning the initiatives of the state—irrespective of disagreements about their nature. Collective responsibility remains an important landmark. This is also exemplified by a debate over introducing higher long-term insurance contribution rates for childless citizens: most of the speakers mentioned thus far are rather critical of this solution.185 Having said this, many voices are pleading for greater individual responsibility. Consumer organizations recommend that, nowadays, ‘no one should forego private insurance.’ However, warnings against bad choices in that respect figure in the press as well.186 Financial experts hold that, in case of frailty, after all ‘only a private solution will help’; demographic change, it is argued, requires that individuals take over the prime responsibility for their care arrangement. This is also the opinion of a well-known academic working with a powerful think tank.187 It is suggested that individuals should pay into a personal saving account for funding care in case of need. Employer organizations contend the risk of dependency has nothing to do with salaried labour and should therefore be covered by a system other than social insurance. Rather, they maintain, ‘economic incentives and private co-payments’ as well as private insurance is needed to cover this risk appropriately. This is endorsed by representatives of the insurance industry.188 Many journalists endorse this line of reasoning. They want ‘to strengthen individual responsibility in the field of care dependency as well’—a message ‘many citizens do not want to hear.’189 Their claim extends to the issue of volunteering: ‘The state should not take over the full burden.’ A further issue is the role of families. Some commentators are more critical of strengthening this role, but representatives of public agencies hold that professionals alone were not capable of ensuring sufficient care.190 Faith-based provider organizations agree and advocate better public incentives for family care.191 Concepts drawing on (a greater role of) informal and lay care work are apparently in good currency. This connects with the debate on sound management within the care system. Basically, there are queries concerning the competitive organization of elderly care and the efficiency of the funding mode (solidaric payas-you-go payroll contributions as opposed to funded saving schemes). As regards the former aspect, representatives of the semipublic sickness funds consider interprovider competition as an excellent instrument to ensure sound management. They advocate ‘creating competitive structures’ and setting up ‘uniform criteria to compare the performance of nursing homes.’

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At the same time, they defend the social-insurance-based funding mode and standardized price regulations. 192 This approach has also been endorsed by other representatives of public administration. Nonprofit provider organizations and professional organizations seem to be less enthusiastic about competitive service provision, arguing that ‘if we do not take care, commercial organizations will grasp the money-spinning parts of the market.’193 Some trade unionists and experts share these concerns. Trade unionists deplore an ‘increasingly ruinous competition’ even though some of them argue that the existing system can still be made more efficient.194 A well-known campaigner against mistreatment of frail elderly people points out: ‘Through the introduction of long-term care insurance, care has become a product placed in the market economy. They make money there, but this does not lead to quality for carers and the cared-for.’ Others hold that just cheap suppliers, and not the good ones, survive, adding that one should better not trust in the ‘self-regulation of the market’ when combating poor quality. A range of journalists agree with this. 195 It appears, between the lines at least, that there are some doubts as to whether market regulations, as they stand at the present time, allow for ‘sound management’ when the aim is to guarantee need-oriented care provision. Having said this, (limited) market governance in elderly care as such is hardly controversial. Provider organizations, while condemning the ‘excessive bureaucracy’ underlying the reimbursements procedure, develop a proactive discourse on ‘customers’ and contend that the overall system ‘is better than its reputation.’196 Some journalists agree with this; (even) municipal domiciliary care providers are sometimes presented as innovative market players able to cope with competitive pressures. Experts entrusted with government consultancy claim ‘a strengthening of consumer power and of the autonomy of the cared-for’ within the system. They also suggest ‘more competition between the long-term care insurance funds.’197 To ease the burden for future generations, a think tank argues, a general ‘extension of the market- and competition-oriented line of reasoning’ will prove helpful.198 From these perspectives, then, market regulations provide a sound management of elderly care because competition and consumer power ensure economic efficiency. The management issue also plays a role when it comes to the future of the long-term care insurance funds as such. Given the deficits the funds are expected to accumulate in the future, questions are raised about the best way to make the care system sustainable in economic terms. As mentioned earlier, some experts and journalists contend that the insurance is viable if it receives a funding stream augmented at least in line with inflation. There are suggestions that (the holders of) the mandatory private long-term care insurance be charged in order to prefund the semipublic system.199 Others, however, are very critical of such suggestions and of the social insurance scheme in general. Experts hold the pay-as-you-go system to be ‘financially explosive’ so that ‘there is no alternative to a private, capital-funded

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protection.’ A representative of one of the faith-based provider networks equally espouses the introduction of a new private pillar. Some journalists agree to this suggestion although it is left open whether a funded scheme should be mandatory and based on lump-sum payments independent of personal risks.200 Altogether, with the future of the long-term care insurance being controversial, voices advocating a privatization of the care system can clearly be heard, with a major argument being that a privately managed system yields more cost-efficiency. Implicitly, sound management here means to ensure maximal value for money rather than to guarantee equal access to care services for all.

5.2.4 France Pensions In France, pensions were quite topical an issue over the years under review.201 The subject of deservedness is, above all, alluded to in discussions about state pension age and early retirement. One major point of reference is pressures employees have been exposed to over their working life. Such pressures are explicitly referred to by an employers’ association commenting on a collective agreement with trade unions on early retirement. Unions, who altogether enjoy remarkable press coverage over the period under review, are constantly calling for the ‘acknowledgement of the hazards inherent in their profession.’202 One of the national confederations deems this ‘a key point for ensuring social justice.’203 Referring to the public administration sector, a further union deplores that existing regulations entail inequitable and indecent pension provision for women as their family burden is ignored. Journalists too argue for considering the particular situation of mothers, including ‘incidents during their professional life.’204 More generally, unions are reported to ardently defend the pension system of the postwar settlement, with a collective retirement age, a guaranteed wage replacement rate (at a level prior to the 1993 reform), and the acknowledgement of personal hardship. In their statements, they insist on pensions compensating life-long professional activity. A union leader puts it like this: ‘Either we maintain the acquired rights and we find ways to pay for this, or we move towards their overall decline.’ In the same vein, representatives of ambulance workers are reported to feel ‘betrayed’ by public employers when ‘losing acquired rights’ while others feel angry about pensioners ‘not benefiting any longer from the fruits of economic growth.’205 A well-known politician, figurehead of the liberal right, claims that reform policies, though unavoidable, should nevertheless respect rights accrued in the past. A journalist depicts the problems (previously) jobless citizens face after the reduction of unemployment credits and the increase in the contribution years required for full pension provision; he finds them ‘condemned

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to a twofold burden’ as they have ‘suffered from reduced income during unemployment’ and must now work longer in order to ‘counterbalance the missing years of activity, as if these were their fault.’ A group of academic experts, evoking future social divisions in the access to a full pension, contends that recent pension reform risks being inequitable as workers are ‘dealing more with chance than with effort or merit here.’206 Implicitly, the recasting of the pension system is understood as an unfair attack on what workers deserve in their later life. A further question raised is whether the public sector scheme should be aligned to the regulations valid for the private sector (subsequent to the 1993 reform). Unions, on the whole, disapprove of this, but representatives of a state inspection board present an account on ‘barely justifiable’ differences between both sectors in this respect. Many observers, including employer associations and journalists, agree with this. Although there are also voices pleading for a more differentiated account, an additional charge against public sector pensions is brought into the debate by a well-known former official of the ministerial administration, who makes the point of a ‘twofold inequity’ between private and public sector workers, with the latter benefiting from both a generous basic pillar and a complementary funded plan.207 Such statements, while advocating curtailments in retirement provision for a section of pensioners, simultaneously read as an endorsement of the collective expectation of pensions reflecting earned entitlements for all in the same way. In correspondence to this, academics, raising questions on institutional design, argue that pensions should remain a deferred salary reflecting the individuals’ efforts over their working life, as this ensures solidarity among generations together with limited intragenerational redistribution—or, in other words, an ‘individualistic system . . . coupled with a collective guaranty.’208 Others, however, contend that the challenge is to release future generations from the burden of public deficits through reforms overcoming the status quo.209 Even though communications suggesting a privatization of pension provision are rare, these reforms are sometimes imagined as creating more scope for private provision (see below). Altogether, however, it is obvious that the concept of earned entitlements has a strong hold in the public sphere, although it is questioned from various sides. Concerning the issue of dignity, several strands of arguments are of interest. To begin with, trade unionists claim that the challenge is ‘to defend our pension system based on solidarity,’ as retirees at the bottom level ‘do not have enough for living.’210 Some journalists agree with this, arguing for instance that lone mothers suffering from a drop in purchasing power cannot afford to save additionally.211 On the whole, however, few worry over pensioner poverty strictly speaking. Rather, journalists hint at markedly decreasing poverty rates among retirees over the last thirty years. Reference to dignity also surfaces with respect to options (future) citizens should be granted when organizing their retirement. In particular, there are

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voices claiming that citizens should become masters of their own pension planning. Employer associations maintain that the French should all be ‘enabled to build an add-up to their (public) pension,’ and financial experts think that anyone has ‘a right to prepare his or her retirement.’212 This is endorsed by academics, who, referring to the interdependence of retirement age and entitlements, defend a pension ‘à la carte’ and suggest that ‘those with smaller pensions might keep on working.’ While trade unions often disapprove of this suggestion, some unionists are sympathetic with the idea of a ‘true choice for employees,’ realized through fair incentives to work longer. A similar point is made by the Catholic Church in its comments on pension reform, published by the press.213 Dignity as the sense of individual sovereignty is an issue, then. At times, this subject is also raised with respect to the (new) pension market. Representatives of the financial service industry generally present this market as being consumer-led, but journalists draw attention to incorrect customer treatment. Reports shed light on the complaints of savers who felt ‘poorly advised’ when purchasing stock-market-traded life insurance and now claim compensation.214 Moreover, commenting on the marketing of the new personal pension plans introduced by 2003, journalists observe a ‘commercial war’ originating in ‘cross-selling interests’ of suppliers. They warn against ‘huge risks of mis-selling’ and the danger that low-income earners may become ‘trapped in a contract they cannot cancel prior to retirement.’ They also evoke the ‘advertising fuss’ surrounding the new plans, with suppliers insinuating a false similarity between these (riskier) plans and popular life insurance schemes, ‘in order to sell them more easily.’ Savers are being viewed here as vulnerable participants in an intractable world of finance.215 One further commentator dealing with these questions is the ‘savings cooperatives.’ These organizations represent holders of life insurance vis-à-vis suppliers and present themselves as consumer associations. Their representatives blame the financial services industry for not taking care of their clients’ true needs, given the uncertain profitability of many retirement saving plans.216 This indictment, however, returns to them as a boomerang as the press reports on a lawsuit involving the (previous) presidents of the biggest of these associations, who are accused of ‘dishonest advertising’ and an opaque way of handling commissions paid by insurance companies. A group of victims deplores this ‘big scandal’ and demands scrupulous scrutiny, and journalists find that the association’s ‘image of transparency and honesty is seriously damaged.’ A representative of a fellow association concedes that many cooperatives, presenting themselves as democratic associations, prove ‘a showcase which eventually allows changes to terms of a collective contract without holders having a say.’217 All in all one can say that consumer dignity matters in the French pension debate as well, albeit more at the margins. Comments on responsibility are much more salient. The financial services industry stands in the first row of those arguing that the onus is ever more on

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the individual. A representative of a think tank rooted in this industry stipulates the (alleged) ‘necessity to move towards a mixed system of retirement provision, with one tier being fully funded voluntary saving.’ In line with this, financial experts predict that everyone will soon be ‘obliged to invest in property or to contribute to a supplementary plan,’ with this capital covering ‘up to three quarters of her or his retirement income.’218 It is suggested that future retirees must operate ‘a scrupulous analysis of personal needs,’ but concerns are raised over the citizens’ propensity to do so. Others lament an ‘over-sensitivity of savers,’ materializing in a net investment preference for short-term saving and secure bonds.219 This scepticism is shared by some journalists. They maintain that the effort for additional private saving will have to be significant yet recommend purchasing a plan ‘only after mature reflection’ and with ‘extreme prudence,’ as the business terms exhibit ‘notable differences, at times detrimental for the subscriber.’ The option for more private responsibility is also endorsed by two experts rooted in economics who contend that the population will not ‘accept devolving the entire burden to rising payroll contributions.’ A fellow of theirs, however, wants the proponents of personal pension schemes to be responsible for ‘providing secure and flexible products.’220 The majority of commentators set limits on the role to be assigned to individuals. One academic holds that, following historical experience, it is unrealistic to ‘count on individuals to save enough for securing their later life.’ An economist argues against ‘those who want us to believe that . . . one should leave individuals with the financial burden and with personal arbitration over saving versus consumption’ while pension systems have always emanated from ‘a collective option.’ Others find it not ‘aberrant that an ageing rich country’ decides to progressively spend ‘a higher proportion of its GDP for pensioners.’ 221 Similar arguments are advanced by trade unions and left-wing political forces. As for the latter, the press published a manifesto defending the idea of ‘republican citizenship’ which implies both an obligation for citizens to pay taxes and subsequent entitlements to public provision, ‘provided charges are shared equitably.’222 Moreover, trade unions, and academic experts sympathizing with them, put the onus on capital owners. One unionist claims that ‘wealth produced in this country ought not to be captured by the sole shareholders but must fall back to workers and pensioners.’223 Others argue that a greater participation of employers is ‘unavoidable,’ since much was ‘ceded by workers to capital owners in the last two or so decades.’ In general, unions are calling for a greater involvement of government. Employers associations are opposed to this; instead, they blame the government for fixing a minimum retirement age. On the other hand, representatives of the insurance industry lament over volatile regulations applying to their sector.224 This is endorsed by the savings cooperatives. The industry wants the state to create more generous fiscal incentives for retirement saving, including direct subsidies for those not eligible for tax credits. Furthermore, some journalists

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take issue with the public promotion of early retirement schemes; they also tackle a decree entitling savers to tax-free withdrawals from (funded) saving plans. An academic expert calls this an ‘apparent contradiction’ between this measure driven by short-term macroeconomic concerns and the pledge for increasing private retirement saving.225 Some speakers also allude to the notion of shared responsibility. Journalists draw on the idea of longer working years—which they assume to be widely accepted—and are pleading for the eradication of (alleged) inequalities between the public and the private sector.226 This is endorsed by employer organizations which argue that it is imperative to ‘put all people on equal footings’; by contrast, they reject any additional burden put on companies.227 However, a representative of the financial services industry, a former member of parliament, wants to make ‘employers promote occupational provision’ especially for low-waged workers. Also, a group of centreright politicians advocates higher taxes on companies to fund the public pension pillar as ‘this would be a symbolic act and would show that all share the efforts.’228 The whole debate elucidates controversial viewpoints concerning the respective roles of the individual, the state, and employers, but relatively high expectations are placed upon the latter two. This has an impact on discussions concerned with what can, or should, be deemed a sound management of the pension system. Journalists make the case for ‘persistent fears’ among the population with regard to public retirement provision and maintain that most experts think the existing system is unsustainable. At times, they perceive these worries as a major trigger of the increasing propensity to save individually.229 Further speakers share this reading. Whereas academic experts contend that the ‘complex and inequitable system is granting false rights that do not correspond to something real,’ financial experts argue that payroll contributions will ‘very soon, no longer suffice to pay true pensions.’230 These voices often imply that funded systems are working (better). Representatives of the financial services industry suggest that many (young) citizens, indeed, are willing to save (more) on their own; they also report that numerous citizens already shop around for capital investments securing their later life.231 ‘We have confidence in the new market,’ it is affirmed, and with the (alleged) stock market recovery, investments in equity are given high chances to outperform secure bonds.232 Regarding the volatility of the stock market, it is argued that fund managers are ‘capable of coping with crises.’ Also, experts stress the ‘enormous potential’ of the corporate pension plans as introduced by 2003. An academic adds that though it is true that citizens experience ‘the stock market as a kind of casino’ they are able to handle this.233 The message of all this is that private pension provision is on the road to success. This, however, is nuanced by many other commentators. For instance, journalists find that existing plans do not help French pensions out of the mess. They also hint at a ‘social contestation of a hitherto unknown dimension’ against pension reforms promoting them, with this alluding to the

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strike movement of May 2003.234 For the time being, pensioner groups— which otherwise are barely referred to in the press—and trade unions are reported to support this movement massively. More generally, there is a passionate controversy about the appropriate pension regime. One journalist holds that although the Anglo-Saxon pension fund model has ‘led into a disaster’ the French should not be ‘overly proud of their pay-as-you-go system.’235 Academics argue that the choice between pay-as-you-go schemes and funded regimes has nothing to do with demography and that the superiority of funded pension schemes is in doubt. Others assert that funded pillars are ‘in the long run not compatible’ with pay-as-you-go schemes, as the former ‘cannibalize’ the latter.236 On this point, representatives of corporate saving stakeholders are more sanguine. In their eyes, the partnership works, provided that the social partners’ ‘collective philosophy’ underlying the existing corporate long-term saving schemes is not crowded out by other private pension plans.237 This is one element of a broader debate addressing a possible ‘French way’ to funded pensions. The Catholic Church is reported to back a pay-asyou-go system with funded pillars as a carefully secured complement, while opposing an overhaul leading into a fully funded system as this would involve greater social inequality.238 Some commentators see France on a good track. Journalists maintain that the new regime mix as envisaged by recent pension reforms has ‘nothing to do with Anglo-Saxon funded retirement schemes,’ the introduction of which has been ‘abandoned by the government’ against the twofold background of the ‘stock market crisis and ideological reservations widespread among the French population.’239 Some articles even hint at a wide-reaching ban on risky plans in the pension industry. The biggest savings cooperative declares that it abstains from marketing the new personal pension plans, and a representative of a leading bank that it will not offer equity-based investment funds for the purpose of retirement provision. A financial expert claims that savers should be offered the opportunity ‘to opt for annuity rates that guarantee a fixed amount of retirement provision for a given period of time.’ A further expert predicts that the new long-term saving schemes serve as a stabilizing investment tool on the whole French financial market. 240 Following all these statements, funded plans seem to be understood as functional only in case far-reaching securities are provided. Overall, however, funded pension schemes are still viewed with strong reservations. One savings cooperative deems the payoffs of the new personal saving plans too uncertain, while representatives of the financial services industry wonder whether the new personal pensions plans (PERP) will be accepted at all by the French. Savers, they argue, may feel caught ‘in a double tunnel,’ as they must pay premiums until retirement and stick to monthly pensions ‘until death.’ This is why they assume the ‘marketing of new pension vehicles risk is becoming tricky.’241 A colleague holds that it is uncertain whether enterprises will actually sponsor corporate plans in the aftermath of the stock market crisis. Journalists report on the trouble a

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number of established corporate pension plans are facing. They also hint at the ‘unavoidable drop in the profitability of life insurance plans.’ In addition, they refer to experts contending that finding sound solutions ‘in the plentiful market supply sometimes resembles a lottery.’242 Many articles allude, moreover, to a ‘very complex and constraining functioning’ of the new pension plans.243 Trade unions maintain that reducing public provision implies an open door to pension funds, and the encouragement of private saving ‘only supports those able to save.’244 In their eyes, the most effective solution consists in injecting more resources into the public pillars deemed to be the only way to guarantee decent pensions for all. Journalists seem at times to sympathize with this. One of them argues that additional charges on salaried work will not necessarily cause economic problems; all depends, he contends, on how to define the remit of the state—which finally is nothing more than a ‘sucking pump . . . for the sake of redistribution, where the richest pay for the poorest, the active for the pensioners and unemployed, and the healthy for the ill.’245 Elderly Care Like pension provision, elderly care is a frequently raised subject in the French print media. Deservedness is an issue here, although this term is hardly employed literally. A major subject is the virtues of universal social insurance against a risk which is often assigned a collective character and linked to problems of social inequality. Thus, academic experts argue that, nowadays, the key challenge is ‘true equality in access to services,’ given that ‘families deprived of the required financial and economic resources have found themselves destitute.’246 Journalists share this point of view. One of them refers to a study of the national office for statistics showing that the way health problems are met, including the institutionalization, closely corresponds to social status positions. A colleague praises the virtues of the personal allowance scheme introduced by 2002, which he views as being popular among the French because of its universalistic character, in contrast to the previous system, which, in his eyes, was infused with the spirit of charity (or social assistance). A similar stance is taken by a pensioner group whose representative holds that ‘dependence induced by frailty is, like illness, a risk anyone is exposed to’ and should therefore be comprehended as a public concern.247 This connects with a widely—albeit not consistently—shared view that this risk should be met by ‘national solidarity,’ a notion which is the official French term for tax-based welfare provision. This opinion is, for instance, expressed by a trade union contending that long-term care should not be subject to a remote welfare scheme as this would ‘entail stigmatization.’248 While (collective) deservedness is not explicitly referred to as a background for moral reasoning here, it appears obvious that the logics of social

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insurance, characteristic of the pension (or health care) system, are seen by many to be appropriate for elderly care as well. However, this is to some extent challenged by those calling for private insurance to fill the existing gaps in care provision (see below). Having said this, the notion of dignity appears far more prominent in the public sphere. There are three major aspects of this particular debate. A first issue is limitations in access to care services, raised in the context of reforms modifying the ‘personal allowance’ scheme. Facing a reduction in the value of the universal (that is, non-means-tested part of the) benefit, trade unions warn against looming ‘disasters within families exposed to difficult situations.’ Pensioner groups and the association of private care homes endorse this expectation, arguing, for instance, that ‘frail widows should not pay for their frailty.’249 Journalists, alluding to public policy choices of recent governments, deplore that elderly care has been subordinated to labour market policies, with the latter promoting care by unskilled home helps employed in private households. This is endorsed by an academic expert who maintains that the central idea behind the societal treatment of (later) old age in France has thus far been ‘to make the poor care for the frail.’ The general moral dimension at issue here is also highlighted by a representative of an employer association who argues that ‘the room a society leaves to the most vulnerable is very emblematic of the values with which it identifies.’250 Secondly, plenty of concerns are raised about frail senior citizens suffering from disgraceful treatment, a subject particularly salient in the debate subsequent to the ‘heat wave crisis’ and the death of thousands of care-dependent citizens. The phenomenon as such is widely acknowledged, including by those directly involved in care provision. Trade unions representing care workers posit that employees put to work in intensive long-term nursing feel subjected to ‘penalty or slander’; moreover, they admit that abuse occurs throughout the entire residential sector. They also take industrial action for more staff, arguing that today’s elderly citizens are facing ‘scant dignity.’251 Representatives of the industry deplore that these ‘undeniable’ incidents do harm to their ‘ethics,’ given the moral challenge to deal with extremely frail persons. There are indeed plenty of reports on ‘senior citizens in danger of maltreatment’ and related ‘scandals’ in care homes.252 Furthermore, a charity entrusted with running a hotline for grievances states an upsurge of incidents being reported to it. Journalists hint at the ‘extreme vulnerability of French senior citizens’ and an overall neglect of the needs of frail care home residents, with ‘their dignity being subject to disdain.’ One of them argues that ‘citizenship of elderly people is a true problem in residential institutions which leave them ever less choice about their own life.’253 Again, this connects with a third dimension of dignity referred to in the public sphere. Like in other countries, the print media sometimes see care recipients, or their family, in a role of service consumers. Two patterns are prominent in the debate. On the one hand, there are voices pleading for more active consumer behaviour and institutional support for this.

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An academic expert recommends that citizens dealing with care issues act like a ‘pretentious customer’ and defend themselves against the ‘infantilization’ of old age. One newspaper offers their readership a guide to excellent care homes, based on an encompassing enquiry aimed at ‘better informing your choice.’254 Moreover, journalists report on care homes seeking quality accreditation, arguing that the image of the residential sector will improve following such initiatives. One supplier of residential care welcomes ‘a new liberty of choice now offered to the consumer,’ and further representatives of the care industry praise the introduction of certification schemes in the care market as ‘a big change throughout the sector.’255 However, critical voices can be heard as well. In an extensive editorial, an academic expert argues that senior citizens ‘are not only consumers, but also citizens,’ and that purchasing in the care sector does not carry ‘the same meaning as in the car industry,’ with the major task of the former being to provide help to fragile persons. Problems associated with market regulations are also raised by journalists referring to private long-term care insurance. Presenting the sector and its development, one of them concludes that insurance is not available to everyone, given that ‘subscriptions are very expensive.’ In addition, the market is presented as being dispersed and not always transparent.256 In short: dignity matters in the French debate as well, with a human rights perspective at the core and a consumer perspective at the margins of the debate. This links with questions about responsibility. The role individuals fulfil in the pension system is frequently at issue. While experts from a quasigovernmental inspection agency deplore the ‘lack of a culture of risk and anticipation’ among the population, some commentators support a greater involvement of individuals in the organization of elderly care. A centre-right politician suggests subsidizing private long-term insurance more broadly, arguing that ‘as much choice as possible should be offered’ regarding care provision, including through direct payments to those purchasing an earmarked private saving plan. This is echoed by a colleague who maintains that ‘beyond a certain level, people should insure themselves privately.’257 Journalists present the respective options and contend that purchasing a plan ‘remains a very personal decision linked to the individual perception of risk and to the budget at hand’; moreover, they recommend their readers to prepare themselves in good time for the eventuality of frailty in later life. In the same vein, they advise (future) senior citizens on how to cope with the care home market, arguing that is imperative to ‘sort out one’s particular needs’ and to proceed to an ‘informed research’ of opportunities.258 Individual responsibility is also at issue in comments on volunteering. A whole range of articles refers to volunteer action in a positive way. For example, a care home resident is cited, in the headline of one of these articles, with the words: ‘It is comfortable to know that volunteers are here.’ Furthermore, a charity holds that providing support to the elderly is a matter of popular ‘education, beginning with simple gestures such as asking for the

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neighbours’ news.’ In a similar vein, the press praises donation campaigns on behalf of frail elderly people.259 Apparently, self-reliance and compassion are notable points of reference in the public sphere when it comes to elderly care. However, a controversy appears with regard to the role of informal carers. Referring to the ‘heat wave crisis’ mentioned earlier, politicians expose that senior citizens are neglected by their families. Academic experts reply that, while social change has reduced the family’s caring capacities, it is the public benefits systems (including care allowances and pensions) that have thus far enabled families to develop accommodating relations with relatives: ‘The maintenance of solidarity within the family is a consequence of the welfare state.’ Some journalists agree, with one of them arguing that senior citizens suffering from the heat wave were not abandoned by their family but by ‘national solidarity.’260 Claims for greater individual responsibility do not remain uncontested, then. This is consonant with critics asserting that the nation as a whole lacks willingness to support frail senior citizens. Associations of nonprofit care providers argue that ‘you can’t resolve this problem by mere compassion’ and that families are not to blame, as ‘solidarity is a national matter.’261 Academic experts deplore that society is not willing to duly care for the frail elderly. They also allude to hostility among the French population to a government plan which makes employees work one unpaid extra day, as a recompense for an additional payroll contribution imposed on employers. ‘People are grousing about the idea of losing a bank holiday for funding elderly care,’ one expert laments.262 Journalists agree with this and bemoan a ‘collective denial’ of the particular needs of the frail elderly. Some, however, see the latter as victims of government policies relying on a mediocre mix of social assistance, home helps, and families: ‘The sector is suffering from a lack of consideration.’263 In the same vein, care providers complain in the press about reduced public subsidies and cuts in the ‘care allowance’ scheme. Trade unions endorse these assessments, saying they want to ‘alert society concerning the needs of fragile people.’ The leading charity entrusted with combating maltreatment espouses a greater involvement of the state regarding quality inspection.264 It is the debate on funding which appears most vivid, following both the reduction of the ‘personal allowance’ and the abolishment of a bank holiday mentioned above. Concerning the former point, some journalists argue that, given the situation of many beneficiaries, ‘it will be difficult to demand substantial efforts from them’; others wonder if income drawn from savings and equities should not be touched upon as well.265 One journalist, referring to the extra working day imposed on employees to fund the long-term care scheme, maintains that unpaid work ‘resembles charity rather than solidarity’—which he deems ‘detestable’—and another takes issue with reductions in income tax for the better-off.266 The extra

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working day is fiercely opposed by trade unions, too: ‘Solidarity, that’s the business of everyone . . . and of all generations,’ it is argued. Because income tax is seen as a cornerstone of ‘national solidarity,’ the government is blamed for ‘seeking to reduce it and making employees work longer to compensate that.’267 Other unionists are calling for health care insurance to cover expenses for elderly care. A campaigning network, founded solely to defend the bank holiday, maintains that, following the regulation, the burden is shouldered by 40 percent of the population only. An academic expert suggests drawing on inheritance tax.268 Even a (regional) representative of the national employer association deplores that the regulation on the extra working day implies that ‘only the active will pay.’ Yet a colleague of his welcomes this regulation as long as it does not penalize companies.269 Equally, a pensioner group and the Catholic Church agree to the measure, although it affects a traditional holiday (Pentecost).270 Journalists present figures according to which a majority of the population is sympathetic to the regulation. Overall, however, the debate centres on which kind of collective funding should be preferred, rather than to what extent individuals should take over expenses incurred through care provision. Providers are deeply involved in the debate over responsibility. The associations of both nonprofit and commercial care homes blame the government for not having kept promises regarding former announcements on increased budgets. Arguing that they do not want to be a scapegoat for the ‘heat wave crisis‘, they also claim (funds for) a better staff ratio which they deem a major stumbling block in the promotion of their sector.271 Concerning domiciliary provision, one of the leading federations representing the nonprofit sector accuses the government of promoting the use of unskilled home helps. Admitting that their corporate members often operate as brokers for these home helps, they contend they ‘just respond to a demand resulting from the funding bodies’ policies.’272 However, the providers themselves are sometimes blamed for bad management and poor quality. A public officer, representative of a département, asserts that domiciliary agencies are ‘incapable of managing and keeping their staff’ as they are run with ‘stone age methods.’ On the other hand, a hospital manager is critical of the private care sector as, with the new lucrative markets in residential care, ‘financial interests often prevail over the interests of the elderly.’273 While many evoke the role of the state, providers are under scrutiny as well. This connects with questions as to what is deemed sound management in the care system. For many, the current mode of management is deficient. Referring to residential provision, academic experts bemoan ‘waiting lists, high prices, insufficient, and at times inexperienced, staff under pressure,’ together with inadequate management know-how and an artificial divide between health care and social care.274 Moreover, the press presents findings from official reports critical of the care system’s overall performance.

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Journalists infer from these reports ‘far-reaching shortcomings,’ with one of them stating that the entire system ‘no longer works’ as it is largely based on an obsolete female life-course. Alluding to domiciliary provision, colleagues of his hint at ‘the realm of imposed part-time work’ and the proliferation of petty jobs, with this setting limits to public programmes that aim at improving the quality of care provision.275 This is endorsed by a federation of nonprofit home care agencies as well as by trade unions; one of the latter deplores a general disorganization of this sector.276 Referring to the funding mode, journalists argue that the ‘personal allowance’ has been a ‘victim of its success,’ as the departments are inundated with claimants. They also hint at ‘deep financial concerns’ of home care agencies.277 Conversely, taking issue with government plans to reduce the allowance, pensioner groups and trade unions argue that means-testing (including recourse to inheritance) implies the death of the scheme, with numerous claimants foregoing the benefit to protect family assets.278 These communications exemplify a critical view of the public (benefit) system, but most of them do not suggest a general incapacity of the welfare state to respond to the frail elderly’s needs. Rather, a widely held view is that the welfare state can and should do better. Having said this, a number of communications address the capacity of the market to contribute to the satisfaction of these needs. On the one hand, there are optimistic views. A representative of a small think tank associated with the (long-term care) insurance industry praises the ‘French model’ of long-term saving plans as this model leaves plan holders with lump sums to be used without any constraints in case of evidenced need. Some journalists argue that while the public benefit system proves insufficient, private long-term insurance is a sound alternative even though plans may be costly. Others welcome the intrusion of stock-market-traded companies into residential care as an additional capital inflow into this sector. Representatives of the financial sector agree with this, adding that demand is spurred by the public benefit system.279 Regarding domiciliary provision, there are voices pleading for a more entrepreneurial approach to be adopted by the sector. In particular, this view is held by sections of the care industry, for instance, a representative of a local provider network and an agent of a chain already well-rooted in the business, with the latter maintaining that the ‘new freedom’ induced by the opening of the market will entail better services.280 The industry, however, complains about public authorities unwilling to cooperate with commercial agencies, a subject taken up by journalists as well. Moreover, there are reports on private care homes exhibiting ‘good practices’ in quality management, including internal alert schemes for signalling abuse. A representative of a joint venture entrusted with the development of a certification system in domiciliary provision argues that ‘the discovery of competition’ in the sector has led the latter to ‘objectify the relationship with individuals (cared-for) without abandoning benevolent attitudes for the sake of profitability.’281

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Although these statements present market regulations as advantageous, other comments reflect a number of queries. This, for instance, concerns the critical view on stock-market-traded care home providers, mentioned above. Moreover, academic experts express reservations on care services being fully marketable. One of them hints at informational asymmetries that may imply ‘market failure’ and pleads for a system ensuring trust between providers and care recipients. A sociologist recalls the situation of home helps working on the free market of private employment; the conditions of this market in her eyes create a ‘devalued métier’ detrimental to the quality of care.282 As for private long-term care insurance, finally, journalists report on the challenge to find appropriate protection and also hint at the tendency of employers to scrap their social protection plans embracing long-term care insurance, leaving employees with the difficult task of seeking alternatives.283 Overall, even though the current state of the care system is considered as deficient by many, the contribution of market forces, or governance, to a sound management of the system remains controversial, especially with regard to equal opportunities of access.

5.3 MAKING SENSE OF COLLECTIVE SENSE-MAKING: HYBRID SETTLEMENTS COMPARED Returning to the grid of analysis developed in chapter 4, it is possible to infer a number of generalizations from the preceding review of public sense-making on pension and care systems. The purpose of this final section is to present a synthesis of the major communication streams related to the development of these systems, with a particular eye on the role of welfare markets. The section begins by filtering out those new elements in the moral economy of old-age provision which appear to make a difference to the postwar settlement and to what has been termed the age of collectivism in chapter 4. Thereafter, these elements will be set (back) into the context of the multifaceted and controversial debate around the four issues identified as core categories relevant to the moral economy of old-age provision. The new elements will turn out to be entangled in specific ways with interpretations typical of the moral universe inherited from the twentieth century. This applies to all countries under review here, although a number of international differences emerge which will be elucidated as well in this final section. The comparative assessment is basically explorative. The frequency, intensity, and consistency of a given argument or communication stream will not be measured, as the analysis is based neither on a term-countmodel nor on a quantitative assessment of associations between normative statements and factual issues. Rather, it seeks to capture the content of the key dimensions underlying the cultural struggle over the development of

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old-age provision. The ultimate aim is to extend the diagram developed in chapter 4 to what appears to be the ‘new culture of old-age provision.’

New Elements in the Moral Economy of Old-Age Provision It has been argued earlier in this book that, during the age of collectivism, care and pension systems relied on particular interpretations of the cognitive framework taking shape with modernity. Furthermore, it has been suggested that using the moral economy concept provides us with a useful tool for filtering out the cultural underpinnings of old-age provision in a meaningful sense. Looking at the way these norms are dealt with in the four countries under investigation, it becomes possible to single out the newly emerging patterns of sense-making going alongside processes of marketization or enhanced market-governance. In other words: We can cull new interpretations from the ensemble of the compiled communications which, while still lying within the range of the general cognitive frames entrenched in modern welfare states, represent novel readings of them. As will be set out below in greater detail, these interpretations—which by and large overlap with what is commonly referred to as the mantra of neoliberalism—do anything but monopolize contemporary collective sense-making around old-age provision. For hermeneutical purposes, however, they are presented in what follows as decontextualized interpretations having an impact on their own. Considering substantial norms first, the reference to cleverness appears internationally as one of the novel underpinnings of the moral economy of old-age provision. This firstly pertains to the field of retirement provision. Irrespective of public regulations embedding private saving, manoeuvring oneself dexterously through the market for saving products is becoming a highly valued competence. Conversely, those unsuccessful in this undertaking are considered to have taken wrong choices. In all countries, a considerable number of commentators argue that the major challenge future retirees have to cope with is to foresee their personal needs, to calculate risks according to their own personal situation, and to wisely compare what the market offers. A similar expectation is raised with respect to care provision, for example where private long-term care insurance is presented as useful or even indispensable. Put at its extremes, this moral agenda implies that only those who have thoughtfully played their market role are considered to deserve decent pensions or adequate care. Importantly, however, this is predicated on the individual being educated to play this role, as is argued by major commentators in all countries under review. This connects with a second transnational interpretation relevant to market-based old-age provision, namely the reference to consumer awareness. This notion has to be read in two senses. Firstly, many of the reviewed communications imply that (ever more) citizens see themselves, or should be seen, as proactive consumers. This applies both to personal(ized) saving plans284—for instance, when it comes to the handling of asset portfolios—

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and to the purchase of care services, for example, when direct payments are in use. Managed care systems and standardized corporate pension schemes set limits on this empirically, but the widespread imagination of the proactive consumer impacts on the perception of what constitutes human dignity in old-age provision. Throughout all countries under study, indeed, influential voices endorse free choice as a morally valuable alternative to bureaucracyled service delivery or benefit allocation because it is viewed as an individual right and therefore, de facto, as an element of human dignity. A second reading of consumer awareness, equally reflected by numerous communications in the public sphere, says that those engaging with consumers should be aware of the conditions under which this right is, or might be, realized. Thus, the dignity of the consumer is being considered by many to be violated where provider strategies—such as ‘mis-selling,’ presenting erroneous information, or disguising poor quality—prevent those actively managing their pension plan or care arrangements from doing so thoughtfully. Indirectly, this also applies where third parties (case managers) contract service providers on behalf of welfare recipients; in this case, consumer awareness basically implies that these welfare recipients should have a say in the management process—and this is precisely what many speakers are missing. Put at its extremes, this understanding of dignity involves a shift in the moral treatment of welfare recipients. It suggests that norms implying need-oriented institutionalized support to distinctive persons, or groups of citizens, give way to rules ensuring consumer protection. Under these conditions, a helping hand from the collectivity is only justified if welfare recipients, or their relatives, have exhausted their consumer power to select the most adequate provision on offer, to monitor the performance of the provider, and to change the latter in case of poor quality. This is half the way to procedural questions concerning the moral economy of old-age provision. One of these centres on the notion of responsibility. Across countries, communications praising the virtues of the market tend to present the individual actor as a major, if not exclusive, carrier of responsibility. Throughout the four countries, indeed, citizens are not only seen by many as welfare consumers, but some statements also imply that they are obliged to behave as such. More generally, individual initiative, taken on all fronts and population-wide, is highly valued, including in the more traditional field of volunteering. However, references to fairness do come into play. Fairness can be assumed a key moral foundation of market ethics, yet generally it is further institutionalized through formal regulations. Many speakers involved with retirement provision seem to expect basic fairness as a prerequisite for (more) individual initiative. They take for granted that those operating private pension schemes are responsible for respecting actuarial rules and basic procedural requirements, such as regulations stipulating what kind of information has to be provided to the customer, or which rights of vesting

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must be ensured. Yet their statements also imply that, beyond these rules, there is nothing but individual responsibility. Taking this interpretation to an extreme would suggest that the operator’s obligations are considered as being fully met once these rules are applied correctly. Consequently, someone losing his or her savings due to a poor performance of his or her investment scheme’s manager would not be seen as justified to claim support from elsewhere. The same holds for market-based elderly care. In this field, many comments suggest that fairness is being achieved as long as a given formal procedure is respected by both the providers and those accountable for the management of funding, whether this is a private insurance company or a public authority. These bodies have to ensure that each frail elderly person is entitled to direct payments, and that each provider meets a range of requirements (basic skills, transparent customer information, open gateways to access supply, etc.) before offering a service. Yet their obligations end there. Finally there are questions related to the issue of sound management, or, more precisely, to norms ruling what kind of effectiveness is valued in (systems of) old-age provision. Throughout the four countries under study, many of those commenting on welfare markets understand sound management in terms of measurable value related to prior investments, with a net preference for maximal average-cost-efficiency. In other words: The emphasis is placed on output for money. What counts are (measurable) top results on the whole rather than secure provision for everybody.285 Thus, funded pension plans are assumed to yield generous outcomes for larger groups of investors, with these outcomes viewed to outweigh a loss in universal security. Many speakers taking notice of present-day markets offering only low, or even negative, profit margins set their hopes in this on-average-profitability materializing in the long term.286 From this perspective, it is this profitability that appears as most essential in terms of sound management. This interpretation also plays a role in the debate about elderly care. In the eyes of a number of commentators, market-based governance ensures sound management, because it is assumed to be, all in all, more cost-efficient, with cost-efficiency being measured in terms of care acts or care recipients per unit of invested finance. Again, the emphasis lies on (measurable) output for money, linked to average cost-efficiency. Consequently, speakers endorsing this interpretation are less interested in (often incommensurable) aspects of a more holistic, consistently need-oriented care provision—relating, for instance, to the quality of personal relationships or the reactivity to spontaneous requirements during the care process. Rather, it is compliance with quantified targets that is highly valued.

The Whole Story Regarding the multifaceted, and often controversial, debate about pensions and elderly care throughout the four countries under study, it is

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obvious that the aforesaid new—widely neoliberal—interpretations within the moral economy of old-age provision are ideal types which become mixed up, or are confronted, with further interpretations. It is also clear that many of the arguments endorsing these elements emanate from distinctive discourse communities such as right-wing think tanks or businesses with vested interests in the pension and care market, whereas many other groups and stakeholders take a different stance. However, contending that these elements stand for interpretations advanced exclusively by some interested parties, and that they are isolated from all other patterns of sense-making relevant to care and pension systems, would be too simple a conclusion. Rather, communications from all sides are infused with these new interpretations. Journalists refer to them when seeking balanced viewpoints; and critics must find ways to qualify them. At the same time, many speakers in favour of market-based governance also refer to, and sometimes try to fit with, more traditional patterns of sense-making. To tell the full story about collective sense-making on welfare markets, the following synopsis therefore provides, cross-country-wise, a recapitulation of the whole spectrum of communications relevant to the four categories under investigation, with the aim being to blend the diverse interpretations at issue and to depict international variation in these interpretations. Starting with pensions, deservedness proves a moral issue in all countries under investigation. Even as they are being seriously challenged by the new market rationale, the logics of earned entitlements still come through everywhere, albeit in various forms and to a different degree. In Britain, it is the withdrawal of (purportedly well-deserved) entitlements to corporate retirement provision that upsets large sections of the public. In a similar vein, the support given by the collectivity to citizens saving for retirement is discussed with respect to notions of equity. In this debate, there is a propensity to consider generous tax breaks for high-income earners as being undeserved, in other words: unearned. Parallel to this, a significant communication stream implies the end of any predictable pension provision outside the (shrinking) public pillar, thus endorsing the viewpoint that it is, or will be, clever investment strategies that make retirees deserve their pensions. This reading appears as influential insofar as few commentators dare to question categorically a system where a notable proportion of retirement provision is left to individual fortune. Canada, on the whole, shows only gradual differences to Britain. Destabilizing influences of volatile financial markets on retirement provision seem to provoke some more moral unrest, with benefits—as earned entitlements—being imagined as endangered for the entire collectivity; this particular sensitivity in all probability resides in the whole system being based on funded schemes. Considering the multitude of recommendations as to how individual citizens should engage with pension planning, however, cleverness appears as an ever more salient point of reference within the official pension culture.

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The two continental European countries are particular insofar as a great number of comments still refer to social insurance as a lever for providing earned entitlements collectively. In Germany, the legitimacy of this mechanism is being undermined with respect to the current level of this kind of retirement provision, rather than with regard to the mechanism as such. Few, indeed, contradict a reading saying, whatever senior citizens deserve, they have to live with lower guarantees in the future. In that sense, the traditional interpretation of retirement provision being engrained in a generational contract is subject to a conflict over gradual legitimacy; an important battle in this conflict has been won by those suggesting that retirement provision will keep up with the overall standard of living only for those who have taken clever decisions on the new pension market. In France, this battle seems still to be under way. The collective reference to the two mandatory schemes is dominant, with the emphasis being in most instances placed on their capacity to deliver earned entitlements to all. Voices appealing to the cleverness of individual investors willing to top up their pensions are audible far and wide; yet they appear disconnected from the general pension debate. Concerning dignity, commentators in Britain are particularly sensitive to poverty among pensioners (which is more prevalent here than in the other countries under study). Most speakers imply that retirees living in a state of destitution are a morally unacceptable reality, and many hold that means-testing stigmatizes claimants. This overall indignation is indicative of a continuing strong influence of the idea of need-based basic provision as a prerequisite of human dignity and concepts of social citizenship associated with it. Shrinking public pensions are seen to violate this idea (further). On a different scale, observers and commentators, including many of those rooted in the pension industry, feel scandalized by what is largely referred to as dishonourable business within the financial services sector. This is consistent with the consumer agenda set out above. Concomitantly, representatives of the pension industry and of employer associations come up with a strong case for the virtues of individual freedom in flexible pension planning. While this is not astonishing per se, this discourse overall appears normal in Britain, whereas it would be less easily understood, say, in German or in France, or even in Canada. On the whole, however, the debate in Canada over aspects of dignity assigned to retirement provision differs from the British one only slightly. Though both pensioner poverty and dishonest product marketing are less an issue in this country, even minor withdrawals of corporate pension entitlements (namely, withheld profit-sharing), extensively dealt with in reports about related lawsuits, are sometimes seen as a violation of human dignity; this may indicate that the Canadian ‘culture of entitlement’ (Snell 1986), supportive of decent, and need-oriented, retirement provision for all, is more deeply engrained in this country than in Britain. Concerning Germany, the traditional reading of human dignity as applied to retirement provision is awarded less attention comparatively

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although the threat of pensioners’ basic needs being unmet in the future provokes some moral indignation. More importantly, suggestions that the older generation be exposed to a rationing of welfare provision upset many speakers; numerous communications imply that this is deemed a violation of human rights enshrined in the generational contract. Furthermore, the consumer agenda, including concerns about fair treatment, is making headway; however, complaints about dishonest marketing pertain to the insurance sector in general rather than to private pension provision in particular. The latter is also true for France. Allusions to the imagery of pension consumers remain cautious in this country, even though there is debate about both the role of individuals in pension planning and the incorrect practices of those operating personal saving plans. Although concerns over pensioner poverty are rare, the notion of solidarity, paramount in the overall debate, still largely embraces the modern understanding of basic social rights ensuring human dignity. With regard to responsibility, Britain exhibits a complex picture. Individual thrift is an issue that goes through almost every communication. Even trade unions feel deeply concerned as to what prevents citizens from saving on their own. Having said this, the state, the pension industry, and employers are held accountable to a large extent for shortcomings in pension provision. Commentators from many sides blame these stakeholders for neglecting their duties, including in respect of basic fairness. More importantly, the expectation of statutory enactment shines through numerous statements. Partnership solutions are widely advocated, but it is the government that is ultimately requested to provide answers to perceived shortcomings, even though the nature of these answers remains highly controversial. Canada presents a similar picture. Individual initiative is highly valued; this is exemplified by pensioner groups claiming more freedom in retirement planning. Yet like in Britain, individual responsibility is predicated not only on basic fairness, but also on solid impulsions from other sides—especially from the state, which is generally deemed to ensure more than poverty prevention. A particularity of the Canadian configuration resides in that public pension fund managers are under scrutiny when it comes to the impact of their management practices both economically and ethically. In Germany, numerous speakers espouse a pension system in which individuals take (greater) initiative to build up pension entitlements. The extent to which this can, or should, be the case is subject to controversy, however. On the whole, shared responsibility is considered by many as the silver bullet, with the corporate level proving most attractive. In a sense, then, retirement continues to be seen as engrained in the employment relationship. Even though it is understood that corporate pensions differ in their nature from a statutory enactment of social insurance provision, there is ambiguity in that discussants rarely spell out that the new pension

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schemes are, in many places, highly individualized and therefore unlike traditional DB schemes, widespread in the postwar settlement. France has a weak tradition in corporate pension provision, so this avenue to shared responsibility appears rather narrow. Instead, the employer’s responsibility is vigorously referred to with respect to the funding of the two mandatory schemes. Statutory enactment remains a key point of reference, with the social partners on the boards of the insurance schemes being viewed as junior partners of the state. Voices advocating greater individual initiative are audible; yet they are heavily contested—more so than in any other of the countries under study here—and do not (yet) appear to represent the mainstream approach in the official culture of old-age provision. Regarding the issue of sound management, Britain presents the particularity that, on the one hand, market-based pensions are deeply anchored in the minds of all communicators whereas, on the other, the way pension fund operators handle their business raises deep concern, in particular when it comes to risky investments exposing assumed securities to the vicissitudes of the financial market. Even representatives of the employers seem to feel uncomfortable with stock-market-dependent schemes failing to ensure these guarantees. In this respect, output for money is not the only normative reference at issue. Having said this, many commentators do not see a true alternative, as the state is viewed as a poor performer as well. Some, however, appreciate a stronger statutory enactment of retirement provision because it entails institutionalized securities, in particular for those neglected by the private and corporate pension sector. The battle on this question appeared to have reopened over the last years covered by this review. Canada witnessed a similar battle as of the mid-1990s when cutbacks in the public-pension sector were under debate but finally discarded. In the period reviewed above, there are some queries about whether funded public-pension schemes will deliver secure outcomes compared with a pay-asyou-go scheme, against the background of plummeting stock markets. This indicates a net emphasis on ‘guarantee first,’ rather than ‘maximal output on average,’ within an approach to universal retirement provision which— it is worth mentioning when comparing Canada to Britain—goes beyond mere poverty prevention. At the same time, nonpublic provision altogether is barely subjected to challenges from whatever direction. While some commentators put their faith in the comeback of the stock market, and a subsequent relief of pressures on the private-pension sector, it appears overall that there are few demands for more market-based provision, including from employers. Altogether, there is ambiguity as to whether sound management stands for universal guarantees or for maximum profitability. Germany sees a controversy over the viability of the public pillar, expected by many to be unable to deliver ‘institutionalized guarantees’ in the future. Conversely, many hopes are placed on personal and occupational provision, including by sections of the trade union movement. For most of the commentators, sound management of retirement provision outside the public

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pillar resonates with corporate provision plus extensive consumer protection. Maximal output for (invested) money is far from being an uncontested reference, then. In France, the plea for highly protected nonpublic vehicles to retirement provision is of equal importance. Institutionalized security enjoys priority over maximum (on-average) profitability, apparently (still) more so than in Germany. This is probably why most French commentators consider funded pension schemes with strong reservations. Many reject them as a matter of principle; others accept them only as a small supplement and with far-reaching (often collective) securities. In elderly care, similar tensions surface when the subject of sound management is at issue. Britain, on the one hand, exhibits a widely shared concern for decent care delivery to be guaranteed institutionally; on the other hand, market-governance is barely seen as a structural source of problems. In many statements, measurable cost-efficiency often prevails over a ‘consequentialist’ approach looking at how needs are eventually met. Voices taking issue with the ‘output for money’-rationale can be heard as well, in particular regarding the (alleged) tendency of both quasi-market managers and for-profit providers to maximize mere outputs (cases, hours, measurable acts) over a more holistic way of caring. Seen in this light, interpretations of sound management are still controversial in the official culture relating to old-age provision. Canada presents a similar picture. While the ‘output for money’-rationale is clearly perceivable in the public debate, quasi-market governance and for-profit delivery are often criticized in Ontario precisely because they are deemed to subordinate care guarantees to considerations of cost-efficiency. In Québec, sound management still largely resonates with centrally steered welfare bureaucracy as this mode of governance is considered by many to guarantee elderly care institutionally (provided that services are sufficiently resourced). However, some commentators espouse (formal) quasi-market governance within this framework, in order to maximize output for money. In Germany, questions of sound management are addressed in the debate as to how far the long-term care insurance regime, and the competitive infrastructure engendered by the latter, eventually deliver decent care for all in need. Some consider the system’s management as unsound, assuming provider rivalry within capped budgets produces collateral damages and rules out guarantees on effective care to those in need. Others are defending competitive service delivery because of (allegedly) greater cost-efficiency on the whole. Again, more traditional expectations confront the ‘output for money’-rationale. The latter, however, seems to be gaining momentum, given that (additional) private insurance has become an issue while provider competition is barely called into question. In some ways, this also holds true for France. Private insurance is hardly contested as a complement to the public system and quasi-market governance and provider competition seem to be settling in this country as well.

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Although the ‘output for money’-rationale is barely evoked in explicit terms, it probably feeds this development. However, expectations of institutionalized guarantees seem to be quite influential because most speakers turn to the state when seeking remedies to perceived shortcomings of the care system. In fact, most communications do not suggest a general incapacity of the welfare state to provide such remedies but imply the latter has to improve its technology. This leads to the issue of responsibility for the organization of elderly care. Concerning Britain, things are not much different from what has been said earlier about retirement provision. Individuals are widely held responsible for both preparing themselves for being affected by frailty and providing support to the frail elderly, including by volunteering. Commentators demand a fair deal for (future) care recipients, with basic rules and regulations enabling them to play their role in the care market. This includes (private sector) care providers, often blamed for neglecting their duties. Regarding the governance of the care system, however, many expectations go beyond this ‘basic fairness’-model and address the responsibility of the collectivity to provide institutionalized guarantees. These expectations range from tough quality inspection through prudent purchasing policies to universal entitlements to elderly care. Thus, the official welfare culture exhibits competing strands of interpretations when it comes to the question of who should take the burden. With regard to Canada, the responsibility issue is dealt with in a similar way, as far is Ontario is concerned. Although considerable emphasis is placed on informal care, self-reliance, and volunteering, a number of speakers stick with the idea that access to care facilities should be guaranteed institutionally. This orientation is still more salient among commentators referring to Québec. In this province, many voices appeal for greater responsibility of the province to counteract the system’s shortcomings, and statements endorsing greater individual initiative come up only at the margins. In Germany, the public scheme for funding long-term care is widely acknowledged as providing guarantees for those in need. Moreover, commentators are calling for the state to enact regulations ensuring care facilities deliver quality. At the same time, many commentators espouse individual responsibility within the confines of the ‘basic fairness’-model. The (regulated) care market and its consumer philosophy are widely endorsed, and there are voices advocating (more) private insurance. The role of care providers is hardly addressed in this context, but informal care enjoys a high moral status—in all probability more so than in the other countries under review here. This is particularly obvious when comparing Germany to France. Individual initiative is being praised here as well, but many speakers express strong reservations about placing greater emphasis on it. Rather, numerous communicators deplore that society as a whole is failing to ensure decent care and want the state to enact new regulations. Provider organizations are under scrutiny as well, irrespective of their juridical

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status (which is often public and nonprofit in France). Furthermore, there is a vigorous national debate on equitable funding which stands out when compared to the other nations. The call for ‘national solidarity’—that is, encompassing funding through fiscal revenue—appears strong; concerning the action plan subsequent to the heat-wave crisis, even representatives of employer associations take issue with the whole burden being placed on the salaried population. Ideologically, then, the reference to collective responsibility is very much en vogue in this country. As for the issue of dignity, there is strong indignation over poor care quality in Britain. At the same time, the issue of human rights is often addressed in terms of care recipients being prevented from being self-reliant in their encounters with both welfare bureaucracies and providers. To many, lack of choice and insufficient respect for the welfare consumer appear as major stumbling blocks on the way to decent care. Thus, the old and new interpretations of human dignity intersect, sometimes with considerable ambiguity as to which interpretation is eventually referred to. The same holds for Canada. As noted earlier, quasi-market governance in Ontario is called into question for two reasons: a perceived lack of a more need-based approach in the practice of (for-profit) suppliers, on the one hand, and an assumed neglect of the care recipient’s preferences in the case management process, on the other. Residential care provision is under severe scrutiny for identical reasons, including in Québec. Implicitly, consumer awareness is at issue here, although this is often not spelled out in a business language. This is different from Germany, where care recipients, or their relatives, are explicitly viewed as customers of service agencies. Providers and regulators are widely expected to bow to the sovereignty of their customers in the care market. At the same time, many speakers express indignation about illtreatment, with some commentators attributing this to the inflexible mode of capped (public) funding, deemed to ignore actual human needs. Again, the inherited welfare state doctrine referring to need-oriented care provision coexists with the new agenda stressing consumer awareness. In France, this agenda, though gaining momentum for some time now, appears still in its infancy. The dominant reading of the situation of elderly care over the period under examination is that of a massive humiliation of frail senior citizens by shortcomings in the overall care system. This discourse finds overwhelming support—ranging from providers through unions to business representatives—and is emblematic of a radicalization of the traditional social rights perspective, which makes consumer awareness an ancillary concern. What about deservedness? As noted earlier, the interpretation of care provision being subject to earned entitlements is rather insignificant in Britain, although some speakers espouse free universal care for the entire older generation, drawing on the normative framework underlying the National Health Service. Many others, however, advocate targeting and ponder in terms of the deserving poor instead of a deserving generation. Having said this, it is only at the margins that elderly care is subject to the cleverness

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norm as defined at the outset of this section. Things are not much different in Canada. The public debate exhibits rather weak allusions to collective deservedness and the generational contract; and, like in Britain, elderly care is loosely associated with state-led universalistic health care. Germany presents a different picture insofar as the generational contract and the logic of collectively earned pension entitlements spills over to elderly care, although long-term care insurance does not seem to enjoy the same legitimacy as the public retirement scheme. Moreover, the welfare mix adopted in the overall pension system obviously encourages speakers to suggest establishing it in the care system as well. Cleverness, understood as shrewd behaviour in care (insurance) markets, may therefore turn out a notable point of reference in the near future. Concerning France, private insurance already has a firm standing; yet most speakers do not allude to it when dealing with avenues to fair care provision. Rather, the logic of social insurance has a strong influence on those who comment on the future of elderly care in this country. Ideologically, it appears even stronger than in Germany because a scheme based on rigid spending caps, rather uncontested across the Rhine, would be deemed as inequitable in this country.

Hybrid Cultures of Welfare Markets Drawing on these general observations, one can conclude that marketbased benefits and services are likely to infuse the moral economy of oldage provision internationally. It would be erroneous, though, to assume that the new moral patterns as set out above supersede those emblematic of the postwar settlement. Rather, it is highly plausible that old and new interpretations intersect in inconsistent ways. Indeed, the review of public communications on pension and care systems suggests a certain ‘cultural stickiness’287 in the process of sense-making around old-age provision, irrespective of the proliferation of new—more or less neoliberal—normative interpretations. This is consistent with what has been widely referred to as path dependencies in the development of welfare states (see, for example, Arts and Gelissen 2002). However, once traditional interpretations intersect with newer ones, this is prone to generate ambiguity within the official welfare culture. The result is a fuzzy synthesis around which public perceptions, discourses, and policies revolve. Accordingly, the new culture underlying care and pension systems adopts a hybrid character across the countries under study, albeit in varying configurations. This hybrid character is encapsulated in some of the reviewed statements and, more generally, appears embodied in new idealtype references which can be read as the median of the communication streams under inspection above. These references are by no means mere virtual representations; rather, they inform transitional compromises relevant to policies, regulations, and institutional design in the real worlds of old-age provision.

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This can first be shown for the substantial norms discussed hitherto. Glancing at major lines of communications running through the public debate internationally, a first synthesis is encapsulated in what might be labelled the concept of flexible entitlements. This imagery amalgamates the idea of earned entitlements and the newly emerging reference to cleverness (predicated on adequate education). It suggests that there are still collective social conditions which justify access to formal old-age provision. Thus, retirement provision achieved through accumulated working years, and linked to a given contribution record, continues to be a major normative reference in all countries under study, albeit apparently more so in France than in Germany, more so in Canada than in Britain, and more so in continental Europe than in the two Anglo-Saxon systems (including Québec). However, the synthesis implies that (senior) citizens should no longer count on defined benefits (in a wide sense). There is now considerable legitimacy in the idea that the ultimate level of retirement provision depends on investment strategies and their unforeseeable outcomes (in the volatile financial market), even as the rules defining that level are ever less expected. While the notion of ‘income package’ has always encapsulated the reality of the living conditions of pensioners across a number of Western countries (Pedersen 2004), this package is now accepted as becoming a black box. Concerning elderly care, frail senior citizens are nowadays being viewed internationally as a distinctive group of welfare recipients awaiting collective solutions to their social condition. This is particularly evident in Germany and, to a lesser extent, in France; the Anglo-Saxon debate exhibits such expectations at least implicitly. Throughout all countries, however, it is ever more openly acknowledged that the range within which this collective deservedness leads to actual entitlements is contingent upon further factors such as individual circumstances (availability of informal support), public budget lines or, not least, local market conditions. A typical characteristic of (quasi-)market-based care provision is that, in a given local setting, a given quality level may be on offer with one provider but not with another. Moreover, those who seek to contain the inherent insecurity (and to top up the often modest level of public support) are left with the private insurance sector—which itself proves flexible insofar as it performs inconsistently. In all countries under study, senior citizens are seen to deserve decent care—yet it is now widely accepted that fully reliable access to the latter becomes partially predicated on astute market behaviour. Importantly, entitlements are becoming flexible not by the mere force of a day-to-day muddling-through of those operating care systems—the latter is a long-standing reality—but also in the collective mind-set of society. This fuzzy mind-set leaves scope for one of the conflicting interpretations (earned versus cleverness-based entitlements) to prevail temporarily over the other, and vice versa, for instance following problematic incidents in care homes.

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As for dignity, the synthesis is taking shape around the idea of needoriented activation. Again, the traditional interpretation is not entirely called into question, but it becomes subject to qualifications. On the one hand, basic care needs continue to be recognized as justifying public support. On the other hand, social rights are increasingly understood as consumer rights. This is outstanding in Germany but also relevant to Canada and Britain, where private residential care and direct payments are in good currency. Only France seems to break the ranks to some extent. Overall, the dignity of the welfare recipient is considered as embracing a right to, and scope for, individual choice; should this choice and scope prove constrained, human dignity is deemed violated. The synthetic rationale resonates with the concept of activation, widely discussed with respect to recent (European) labour market policies (see, e.g., Barbier and Ludwig-Mayerhofer 2004). Human dignity is to be respected as a matter of principle, yet it is considered as being fully established only if individuals are taking part in the provision of welfare actively, be it on the labour market or on the (consumer) market for care and retirement provision. Need-oriented activation appears as a happy medium between the traditional and the new interpretations of what dignity means in social welfare provision. This synthesis is fraught with tensions, though. Its inherent fuzziness is epitomized by the British debate about private saving versus means-tested basic benefits: The new pension culture in Britain stands for both need-oriented basic support and consumer-led pension provision. In the eyes of experts and policymakers, the (tricky) challenge is to devise institutional solutions satisfying both of these expectations.288 Concerning elderly care, many commentators across the four countries are committed to the removal of barriers impeding consumers of care services from making their own choices. However, as citizens are encouraged to activate themselves through material incentives, if not the threat of sanctions, traditional notions of human dignity may be ruled out. Regarding procedural norms governing old-age provision, two more syntheses can be singled out. The first draws on the imagery of contextsteering—a notion derived from the recent literature on public management. Across all countries and the two organizational fields under investigation, references to collective responsibility and statutory enactment have remained high on the agenda (Anttonen et al. 2003; Hyde et al. 2006). However, the nature of public agency is often understood in a new way when compared to the postwar settlement, especially in Germany and the Anglo-Saxon systems (without Québec). Expectations of this agency appear ever more confined to rules imposed from outside on the (welfare) market play, instead of a direct programming of social welfare provision. Although embracing the protection of basic fairness norms, these expectations often extend beyond these norms. In elderly care, they pertain to approaches to case management, quality assessment, or care

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standards, with compliance being permanently monitored. Concerning retirement provision, expectations of public context-steering range from the thoughtful design of statutory subsidies and tax breaks through focused regulations for saving vehicles to rules which compel the pension industry to resort to encompassing reinsurance. Again, this synthesis appears fuzzy as the general agenda of public context-steering appears to oscillate nervously between statutory initiative and laissez-faire. Finally, there also is a synthesis of interpretations relating to sound management. This can best be described as an orientation towards best value arrangements, a term derived from a governance doctrine prominent in contemporary Britain. Wider streams of communication imply that such arrangements are understood as a working, and satisfying, mechanism between market governance and institutional fixation. This particularly applies to the Anglo-Saxon systems, including Québec (at least for the case of retirement provision), and to Germany. Numerous commentators across the four countries seem to abandon or discard the claim that the relevant institutions award all-encompassing guarantees to recipients of old-age provision; however, several mechanisms are advocated that are to deliver value beyond considerations focusing on mere average-cost-efficiency. Concerning nonpublic pensions, these mechanisms include limits set to the tradability of saving products, models of shared governance, or minimum interest rates suppliers must guarantee. Regarding elderly care, there is—between the lines—a widely shared plea for procedures through which care providers exposed to market forces maintain some room for manoeuvre to deal with upcoming needs in a pragmatic way and according to professional expertise. This resonates with actual practices in the field—for example, those local contract policies seeking long-term stability of service provision rather than short-term measurable efficiency,

deservedness dignity responsibility sound management

Traditional references earned entitlements need-based (basic) provision statutory enactment (institutionalized) security for facilities & programmes

New references

Fuzzy synthesis

cleverness (with education) consumer awareness individual initiative (with basic fairness)

flexible entitlements need-oriented activation public contextsteering

(maximal) output for money

best value arrangements

Figure 3. The new moral economy of old-age provision

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applied or discussed in Britain and Canada (Entwistle and Martin 2005; Caplan Report 2006). The leading reference here is best value, rather than evidenced output per invested unit of finance. Again, this synthesis exhibits a fuzzy character as it is fraught with a permanent tension between a propensity to go for the output for money-rationale, on the one hand, and attempts to favour management approaches that privilege institutional guarantees over average-cost-efficiency, on the other.

6

Conclusion A New Moral Economy of Old-Age Provision

The point of departure of this study was an observation inspired by a sociological perspective on the changing relationship between public and market spheres in contemporary Western welfare states. The latter, it was stated, have, for some time now, witnessed the interpenetration of spheres or systems which mainstream social theory once assumed as a matter of principle to be separate. Throughout various fields of social welfare provision, benefits and services have indeed become granted or delivered within a mixed institutional architecture, referred to by many as social, quasi, or welfare markets. As this development has hitherto been given but scarce attention by the (sociological) research community concerned with social welfare provision, it was deemed to deserve closer scrutiny. More precisely, looking at the case of pension and care systems, this book aimed at illuminating the complexity of the phenomenon and the way marketization impacts on how Western society conceptualizes the institutions providing support to the generation disengaging from productive activities. A basic objective consisted in mapping the infrastructure and the internal dynamics of welfare markets in retirement and care provision for a range of advanced Western welfare states. In addition, the study intended to look at how these markets are becoming culturally embedded. Underlying this question was the assumption that shared collective meanings conferred upon particular modes of social welfare provision are essential to institution building in modern welfare states. It was contended that, even though the role culture plays for the development of societies in general, and of the welfare state in particular, has proved highly controversial, there are compelling reasons to suggest that (sustainable) institutional change connects with, and is frequently rooted in, cultural change. This argument can be made from (at least) two alternative perspectives between which a straightforward choice is difficult to make. On the one hand, one may assume that the evolving ideas about how social welfare should be provided are driving forces of institutional change; in this case, research on processes of collective sense-making elucidates the nature of these driving forces. On the other hand, institutional change may be seen as being inflicted by political or economic forces— triggering extrinsic cultural

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change, in the wording suggested by Chapter Four. With the existence of a modern public sphere, however, such change is subject to processes of collective sense-making which are, at least partially, independent of these political and economic forces. Under this assumption, shedding light on processes of collective sense-making can provide answers to the question of how deeply engrained the newly introduced institutional patterns are in the mind-set of a national community. To put this another way: it can inform us about the sustainability of institutional change within a given welfare state. Thus, regardless of whether one subscribes to the first or to the second line of reasoning, a research focus on culture makes sense. What is more, even though this book did not intend to unravel the actual interplay of cultural and other forces in the transformation of welfare state institutions, a central hypothesis of the study was that the marketization of oldage provision chimed with wider cultural, and not just economic, change. Regulated marketization, so the argument ran, goes alongside the proliferation of new representations of the normative heritage of modernity and a multifaceted moral economy of which the character cannot be directly inferred from mere economic and political developments. Furthermore, assuming that the cultural processing of institutional change varies across nations, the study aimed at comparing two types of welfare systems, namely corporatist and liberal regimes. Here, the overarching question was whether, against the background of what is commonly referred to as economic globalization, we are now heading towards a transnational culture of old-age provision, or whether there are, and will continue to be, several cultures of welfare markets within and across the two regime types. This concluding chapter summarizes the key results of the study. Firstly, it recapitulates major insights drawn from the comparative assessment of welfare markets in old-age provision throughout the four countries. This includes an account on differences between the two organizational fields (pension and care), a comparative dimension which this book has barely dealt with thus far. The second section revisits the major findings concerning the cultural embeddedness of welfare markets, arguing that a new moral economy of old-age provision surfaces internationally; again, some discrepancies between the two organizational fields are highlighted.

Comparing Welfare Markets and Their Evolution It does not appear useful here to replicate what has been set out in chapters 2 and 3 on the nature and evolution of welfare markets in the four countries under study; a brief summary suffices here. The general message of these chapters was that welfare markets matter, albeit in different forms and to different degrees. Importantly, there is evidence that market-based oldage provision plays a growing role in all countries under investigation.

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Subsidized and/or managed welfare markets now figure as key elements of their institutional setup while the organizational fields relevant to social welfare provision are becoming ever more complex. Concerning pensions, with public provision being capped or curtailed, DC plans and personal retirement plans proliferate, including at the expense of traditional DB schemes. However, the level of commodification pension systems are processing varies between the continental European and the liberal welfare regimes as well as within both worlds of welfare. All countries resort to subsidized welfare markets, but current nonpublic retirement provision is handled in different ways where it has a longer tradition (in Canada and Britain) and is being introduced more or less vigorously where public pensions were dominant until recently (in Germany and France). Regarding elderly care, while Britain and (to some extent) Canada primarily resort to managed welfare markets, distinctive varieties of subsidized welfare markets are prominent in the German and the French care system. Moreover, the systems differ concerning the nature of the relation between public and private involvement in care provision. So there is a ‘poor-citizens’–rationale instilled in public provision and strong for-profit sector delivery in the United Kingdom; a more universal, albeit still quite British approach to market care in Ontario; rather welfare-bureaucratic governance prevailing in Québec and France (where market care is placed at the margins); and a mixture of socialinsurance-based universalism and consumer-led care provision in Germany. Moreover, private insurance, provider competition, and consumer choice are unequally developed throughout the care systems under study, and the respective differences do not always conform to the classical regime typology (setting liberal against corporatist systems). In addition, the various mechanisms devised to embed, or to constrain, the logics of the market vary considerably. These mechanisms are strong in Germany and extensive in the (much more deregulated) British system, but they appear less important in the French and the Canadian landscape (for different reasons). This holds for both pension and care provision, perhaps with the exception of the inspection regime in the German care system, which is limited in scope. Importantly, each country exhibits its own agenda of marketization and regulation. Concerning retirement benefits, the great variety of nonpublic schemes in Britain, the existence of a funded public pension pillar in Canada, the importance of state-subsidized personal and company-based semi-DC plans in Germany, and the residual role of nonmandatory retirement provision in France, all imply particular reference points for collective sense-making associated with marketized pension provision. This is equally obvious for the case of elderly care, as Britain is strongly committed to inspecting market care while Canada still seems to struggle with the very idea of quasi markets; market care in Germany chimes with free consumer choice, and France presents the particularity that the recourse to self-employed nurses is taken for granted, whereas the use of privately employed home help proves a bone of contention.

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Such differentiation also appears when regarding the internal dynamics of welfare markets in old-age provision throughout the four countries. As both the intensity of marketization (materializing, for instance, in the proliferation of DC pension schemes and in the development of the for-profit care industry) and the scope of market regulation (affecting, for example, the entrenchment of private-sector delivery) vary considerably across the four nations, the relevant subjects of discussion —and problems referred to in the public debate—are far from congruent. Notwithstanding these differences, however, a number of transnational similarities stand out. Regarding pensions, the expansion of private saving for old age, the devaluation of assets accrued on saving accounts, the crisis in (DB) corporate schemes, and market turbulences materializing, inter alia, in management scandals can all be found in each of the countries under investigation. With respect to elderly care, the similarities include the surge of for-profit delivery and private (co)payment, a (sometimes contested) drive towards managed competition as well as concerns over poor service quality. Hence, although there is variety in the architecture and development of welfare markets in oldage provision, the four countries face a common agenda, and this provides fertile grounds for the comparative analysis of processes of collective sensemaking concerning these markets. Finally, we should briefly embark on a comparison between the two organizational fields investigated by this study. Are there other than technological differences between the architecture and the evolution that welfare markets exhibit in these two fields? Furthermore, do national systems vary in this respect? Regarding these questions, a number of points can be made. To begin with, in contrast to contemporary pension systems, private insurance is not a general pattern in elderly care, and where it occurs, private retirement provision (paradoxically) is less widespread. Marketization, then, does not develop consistently across the two fields. Furthermore, nonprofit agencies are not a structural feature of (marketized) pension systems but appear as prominent players in three of the four care systems; also, for-profit actors are (still) mostly small-scale in the latter whereas they prove large-scale in the pension sector. Thus, personal service provision and the allocation of saving benefits seem to imply differences in the relationship structure associated with processes of marketization. In the same vein, attempts to centrally control welfare markets are stronger in elderly care, irrespective of the obvious international variety regarding the scope of this control; in elderly care, public inspection tends (more or less) to consider outcomes, whereas in retirement provision it is mostly confined to checking the soundness of basic procedures. Moreover, quasi-market governance appears prominent in two of the care systems but is, strictly speaking, not used as an organizational device for pension provision. A further difference is that—maybe with the exception of Germany—for-profit provision hitherto tends to be concentrated on middle and upper classes in the pension system, whereas it extends to frail

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citizens with low incomes in all countries except France; hence, maybe there is a propensity for public bodies and governments to make more directive interventions in the care system. Finally, all countries witness a tendency towards informal rationing in elderly care, whereas limitations in retirement provision are widely entrenched into the formal setup of the pension systems. One may infer from this that the idea of withholding support from frail elderly persons is seen as less legitimate than leaving pensioners with miserly incomes.

Comparing Cultures of Marketized Old-Age Provision An extensive review was presented in chapter 4 of the theoretical debate addressing culture and society, welfare culture, the culture of the market, and the culture of old-age provision. This review offered reasons for suggesting that, with ongoing societal modernization, a broader space is left to cultural struggles about interpretations relevant to the institutional setup of contemporary Western society. Culture—defined in this study as being composed of collective cognitive frames containing varying interpretations—has, according to the argument, become more flexible. Yet, it was also put forward that particular political, or economic, forces may manage to make their particular ideas dominant in the public sphere, producing thereby extrinsic cultural change. It was contended that intrinsic cultural change, driven, for example, by rising individualism and by the erosion of collective belief systems, may coincide with this and provide fertile grounds for this extrinsic impulse being internalized by major social groups. However it was also argued that whether, and how, extrinsic change is transformed into sustainable intrinsic change remains open to empirical investigation. Thus, when it comes to collective sense-making relating to the institutional regulation of old-age provision, it may well be the case that societal elites impose their own market-based approaches on the wider society, even though more intrinsic change—materializing, for example, in new autonomy claims (on behalf) of elderly people—may (at face value) perfectly fit with this agenda. However, the fact remains that alternative interpretations of the cognitive framework endemic to modernity are kept within the repertoire available for collective sense-making—for instance, ideas referring to social citizenship rights or to the inalienability of institutions enforcing respect towards human dignity. This duality of old and new representations affects welfare states, in general, and old-age provision in particular. Thus, there is room left for the negotiation of designs of care and retirement systems, and regarding the references on which ‘negotiators’ can draw, this space has grown in scope. To some extent, at least, collective interpretations related to these designs develop, or persist, independently of mainstream agendas for welfare reform. There is no mechanistic translation of extrinsic impulses—such as those stemming from the proponents of New Public

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Management—into consistent processes of collective sense-making. Moreover, this sense-making may (continue to) differ across national cultures. Turning to the issue of welfare markets, the discussion in chapter 4 drew attention to the complex cultural underpinnings of modern market interaction. It was argued that the relative cultural openness of systems of social welfare provision is endorsed by the fact that markets, though undeniably exhibiting expansionist tendencies, are subject to struggles about their regulation. These struggles are, inter alia, informed by ideas about the moral qualities of markets, regardless of whether these values are actually met during market encounters; this, for example, pertains to the idea of the equality between consumers or to the right to autonomous (market) choice. As these values are strongly emphasized in the process of market-oriented welfare reform, they may turn out to challenge alternative (typical) cognitive representations of markets—such as the right of the stronger or ‘the winner takes it all’. All this impacts on what was referred to, in chapter 4, as the moral economy of old-age provision. This moral economy—understood in this study as a normative universe whereby meaning is conferred upon economic transactions in the field of social welfare provision—is prone to change with ongoing marketization. However, given the flexibility of (welfare) culture and the variety of ways to make sense of (welfare) markets, the configuration of this moral economy cannot be mechanically inferred from one-dimensional approaches such as those referring to the mere political economy of welfare states—hence the necessity of an (explorative) empirical investigation, based, in this book, on an extensive review of communications published by the quality press. This investigation focused on four major moral rationales, deemed as cornerstones of modern thinking when it comes to the promotion of human well-being: deservedness, human dignity, responsibility, and sound management. It departed from a (theoretically founded) speculation about how these rationales were interpreted during the ‘age of collectivism,’ arguing that (duly) earned entitlements, need-oriented (basic) support, statutory enactment, and institutionalized (social) security were major landmarks of the then prevailing moral economy of old-age provision. Looking at communications stemming from different types of speakers, assumed to represent the official culture of a Western society, it then examined recent streams of collective sense-making related to (marketization in) care and pension systems across the four countries selected for this study. The concluding section of chapter 5 presented the major results of this review. It made clear that, notwithstanding a tendency towards more market governance at various scales, pension and care systems are exposed to a certain cultural stickiness; interpretations of the four moral rationales which can nowadays be named traditional, coexist, sometimes conflictually, with new, more or less neoliberal, readings. For example, both a high valuation of microeconomic performance and deep concerns over threats to human dignity may surface in one and the same stream of arguments.

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The Culture of Welfare Markets

The novel readings place the emphasis on values such as cleverness, consumer autonomy, individual responsibility, and (cost) efficiency. However, the respective claims are mostly premised on conditions which set limits to the reach of these values—for example, collectively organized financial education or basic statutory inspection. By the same token, traditional references which are evoked challenge these novel readings. This is not surprising given that long-established collective actors (for example, trade unions) are still alive. Yet, it is interesting to see that the recent debate about pension reform in liberal Britain has revived sense-making processes typical of the age of collectivism—similar to what happened earlier during the great pension debate in Canada. Moreover, the resistance to quasi-market governance in the Ontarian care system or the stubbornness (or determination?) major social groups in contemporary France exhibit vis-à-vis pension fund capitalism illustrate that the message of the proponents of (regulated) marketization has not yet been fully internalized by Western societies. On the whole, however, much contemporary sense-making reflects a fuzzy, and uneasy, compromise between the new and the traditional interpretations. Binding entitlements to pensions and care services are still an issue, yet the pledge for this is becoming less definitive, as the actual level (or quality) of benefits and services is widely accepted to become flexible— that is, less reliable. Moreover, human dignity is awarded great attention, in some respects even more so than in the past. This is concerning, in particular, the widespread public indignation over ill-treatment in elderly care (see below). Again, however, we witness a fuzzy mixture between traditional expectations (minimum income for pensioners, universal access to care for those in need), on the one hand, and a significant emphasis placed on consumer dignity (i.e. the rights of welfare customers to equal opportunity and fair information) on the other hand. The former expectations are consonant with an indisputable, need-based eligibility for collective support; the latter implies that welfare recipients have, above all, a right to activation, that is, to be enabled to act as a wise consumer. This connects with the issue of responsibility. Statutory enactment of care and pension provision is still on demand, yet this is now challenged by strong pleas for greater individual responsibility. Here, the fuzzy compromise says that public bodies, apart from providing basic provision, should concentrate on context steering rather than direct intervention. Thereby, public agency is accepted to become less comprehensive. Finally, a new mainstream understanding of what is to be seen as sound management of a pension or care system takes shape. It is best-value arrangements that, nowadays, are often viewed as a satisfying, and working, mechanism located between market governance and institutionalized (social) security, with the latter widely deemed inefficient in the official culture surrounding contemporary welfare states. These arrangements are expected to deliver measurable value for money beyond mere (average) cost efficiency—for instance, through the recourse to service frameworks imposed on private providers or through

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limits set to the tradability of retirement saving products on the equity market. However, there is no longer a symbolic priority on guaranteeing certain outcomes through (re)adjusting budgets or regulations, if necessary. Those familiar with recent ideological developments in a number of Western welfare states will probably feel reminded of the Third Way mantra originating in New Labour’s Britain (but applied here and there prior to its coming into office). Indeed, on the one hand, some of these fuzzy syntheses appear in line with a neo-Beveridgean approach to social welfare provision, as they endorse an institutional design composed of basic provision and (beyond this) a mix of individual responsibility and arrangements at the meso-level of social relations (in particular, corporate and voluntary sector provision). On the other hand, using ‘markets means’ for ‘welfare ends’ (Taylor-Gooby et al. 2004), that is, shifting social welfare provision to markets regulated according to certain outcome objectives, is at the core of this mantra. It is also highly compatible with the fuzzy compromises the culture of welfare markets appears to produce. Of course, there is debate as to whether countries like France, for instance, have really embarked on this undertaking; it has also been argued that Québec goes its own Third Way (see for this debate Lewis and Surender 2004; Clark 2004). However, this study found, in all countries examined, at least some elements of the depicted fuzzy syntheses—insofar as the culture of welfare markets can be grasped as a Third Way culture taking shape internationally. This does not, of course, imply that this process necessarily reflects a natural development within Western societies. It may equally be the case that extrinsic cultural change is imposed on these societies and that major social groups in these societies feel half receptive and half dubitative, or simply at a loss with the prospects of the late modern welfare state in general, and of old-age provision in particular. Having said all this, differences between the four countries, and also differences between the two organizational fields, should not be downplayed. Concerning the national particularities shining through the set of communications reviewed in chapter 4, it is obvious that the new (neoliberal) interpretations of the four rationales are quite heavily contested in France, while they find a strong echo of support in Britain and, maybe to the surprise of many, in Germany (where welfare markets adopt a particular character and are less developed). Canada presents a varied picture. In this country, the pension mix is not challenged categorically. Hence (labour-)market-based provision beyond the two public pillars—which is much more significant here than in continental Europe—appears widely welcome. As for home care, although some voices defend the purchaser–provider-split governance approach in Ontario, many feel uneasy about competition-based, or forprofit, service provision (even though it is widely developed in residential care). By the same token, the syntheses of interpretations set out above are highly congruent with the actual contents of major communication streams in Britain, Ontario, and Germany (in this order), whereas they have more of a virtual character in the case of France and (partially) Québec.

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The Culture of Welfare Markets

As for differences between elderly care and pension provision, the most salient point is that human dignity is given a very strong emphasis throughout all countries when it comes to elderly care. This is consistent with sociological accounts of a new cult for personal autonomy and individual self-determination, ever more celebrated in late modern society. In this vein, the ill-treatment of a care-dependent person is considered a severe violation of human rights whereas limits to self-determination originating in low pension provision seem to cause less concern—even though (new) poverty risks faced by retirees are alluded to in a number of communications. In addition, care systems are often seen as managed soundly only if outcomes are under public oversight in one way or another, whereas the debate about best value in pension provision rather centres on mere procedural issues. In a nutshell: Notwithstanding international variation, the welfare culture relating to care provision appears, even under conditions of marketization, more universalistic than the one relating to retirement provision. Overall, it is fuzzy moral economies of old-age provision that emerge across the two welfare regimes under inspection. Modern pension and care systems, arguably, always have relied on a mix of normative rationales, but there is no longer a leading line of interpretation(s) informing collective sense-making when it comes to questions of old-age provision. The legacy of the age of collectivism has come under severe scrutiny but still serves as a reference point when the debate turns to what to think of the novel (by and large neoliberal) interpretations. With the new struggle about the right interpretations of the cognitive framework endemic to modern reasoning, lobby groups, politicians, and regulators can draw on a wider set of possible standpoints. The culture of welfare markets, then, opens space for various options concerning the societal organization of care and pensions. This, however, tends to have serious implications for the future of oldage provision. Indeed, we now deal with an uneasy tension field within which public opinion and institutional regulation is moving back and forth from one option to another, possibly in random ways, as much depends on ephemeral equilibriums established between different interpretations. This volatility is a typical feature of what I have termed elsewhere disorganized welfare capitalism (see Bode 2003b, 2006). For instance, should accidents occur in the private-pension sector, or in the care industry, there are good chances of tougher regulations. Conversely, if stock markets prove dynamic, or if there are unexpected strains on public budgets, then this might trigger further steps towards marketization. Accordingly, the outcomes in terms of benefits paid and services provided to a given cohort or group of senior citizens will vary over time and prove unequal, even among groups with similar social status. To sum up, the different interpretations which crystallize in the contemporary culture(s) of welfare markets lead into pluralistic configurations, with the scope of available references becoming larger and the actual prevalence of distinctive interpretations more insecure over time. Contemporary

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collective sense-making around welfare markets in old-age provision is clearly influenced by those—widely neoliberal—references which have been singled out above as novel elements in the moral economy of care and pension systems. These references, however, are intertwined with the legacy of the postwar settlement. This coincidence implies that individual strategies; local relationships between welfare recipients and provider organizations; interactions between the latter and public regulators; and, last but not least, public policies all are much less predicated on univocal understandings than they were in the past. In other words: Even though the marketization of old-age provision is undeniable, the new welfare markets prove embedded in distinctive, albeit inconsistent, cultural patterns. In this precise sense, old-age provision becomes postmodern. As pension and care systems are now subject to permanent societal renegotiation, old-age provision evolves within contested cultural terrains, with enduring instability in social welfare outcomes as a likely result. Concerning the range of available options, significant, though often gradual, differences between countries are still obvious. Thus, there are several welfare cultures embedding market-based old-age provision on the international scale, despite the global proliferation of the market model. Yet even if these differences were to vanish in the long run, the marketization of old-age provision will continue to depend on the way major societal actors make, at a given point, sense of its (alleged) advantages and (experienced) limitations. Therefore, the future of welfare markets is wide open.

Notes

NOTES TO CHAPTER 1 1. The notion of welfare markets was introduced by Taylor-Gooby (1999). Prior to this, similar terms, such as ‘social care market’ or ‘quasi market,’ were in use (Wistow et al. 1996; Le Grand and Bartlett 1993). 2. A good deal of the scientific debate about marketized forms of (public or nonprofit) welfare provision is concerned with the alleged virtues of imposing market rules on institutions and organizations providing social transfers or services. Judgements concerning these virtues are controversial, but this book does not engage with this debate. 3. See the discussion in chapter 4. 4. Chapter 3 will further elaborate on approaches rooted in economic sociology. 5. The notion of official culture as used in this study means an ensemble of representations taking centre stage in arenas of which the architecture conforms to the social stratification typical of a given (Western) country (see chapter 4). 6. Chapter 5 will elaborate in greater detail on the research design and the methodological approach underlying this review. 7. The literature review underlying this study was much broader than the bibliography suggests and included material published in French and German. Especially for the portrayals of the care and pension systems and their recent evolution, only a limited number of (outstanding) references, almost exclusively written in English, are provided. 8. Around forty interviews were conducted in the four countries between 2004 and 2006. These involved two types of experts: distinguished academics studying pension and care systems, and (where this proved necessary because of insufficient data or documentation) professionals working for regulatory agencies in one of both organizational fields. The (long) list of these experts is not provided here, as, for the sake of clarity, this book does not systematically link basic factual information to the sources it is taken from. 9. Corporatist welfare regimes are commonly seen as systems based on a strong nexus between industrial relations and social policy, on moderately generous and wage-labour-linked welfare benefits, and, following deeply entrenched traditions of family care, on a rather limited role of professional social services—at least when compared to the situation of Nordic countries.

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NOTES TO CHAPTER 2 1. This connects with more encompassing agendas of rebuilding the infrastructure of contemporary capitalism. Concerning retirement provision, for instance, ‘Anglo-American pension fund capitalism provides an important reference point for those driving the process of European financial market integration’ (Clarke 2003, 40). 2. This has, among other things, had a considerable influence on (social) care systems. Leichsenring (2004, 13) elucidates the cultural dynamics underlying this international process: ‘With the ongoing market- and managerial orientation it seemed as if public services and social services in particular could catch-up in their professional and societal image only by taking on board the “professional approaches” coming from the business-based concepts.’ 3. These quasi-(non)governmental agencies are defined in the literature as administrative units ‘at arm’s length (or further) from the main hierarchical “spine” of central ministries, ( . . . ) carrying out public tasks (service provision, regulation, adjudication, certification), . . . subject to at least some public/ administrative law procedures’ and affected by ‘structural disaggregation and/ or the creation of “task specific” organizations’ based on performance contracting and some ex-post controls over personnel and finance (Talbot 2004, 6). 4. These strategies include, for instance, statutory initiatives to extend agreements on corporate pensions reached in specific industries to a complete industrial sector and to create pooled funds for small and medium enterprises. 5. NHS patients are invited to select a hospital from a range of regional providers, whereas in the past, most of them were directed to one particular hospital under the contract of the health authority. Countries such as Germany and France have long known free choice in hospital care but have only recently created choice options in social care. 6. It is worth mentioning that the existence of a centralized welfare state machinery by no means excluded the ‘interorganizational management’ of social policies, given the sometimes critical influence major stakeholders such as employer associations, trade unions, or medical pressure groups exerted on the social policy agenda and its implementation (see, for example, Birkinshaw et al. 1990, for the case of Britain). 7. This holds even though intersectoral coordination has long been emblematic of most postwar Western care systems, irrespective of the architecture underlying each system (Bode 2006). Indeed, even the more state-led welfare regimes relied on extensive interagency relations throughout the postwar decades (see Salamon 1995; Taylor 2002; Giaimo 2002). 8. A case in point is the creation and recurrent remodelling of the Financial Services Authority in Britain with its remit both to enlighten citizens willing to contract private saving schemes and to oversee the practice of the financial service industry. A similar remit has been given to the ‘Régie des rentes’ in Québec, Canada. 9. Concerning the UK, one should mention the Pension Policy Institute, the Institute for Public Policy Research, or Catalyst. In Canada, similar types of more progressive organizations exist, for instance the Caledon Institute of Social Policy. In France, the role of providing ‘biased’ expertise is mostly taken by scientific institutions, even though small industry-sponsored think tanks exist in the pension field. The same holds for Germany, although a powerful think tank open to the arguments from the pension industry (the Bertelsmann Foundation) proved a key player in the process of introducing a more mixed pension system.

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NOTES TO CHAPTER 3 1. These media comprise business newspapers, insurance magazines, or newsletters from agencies involved in old-age provision. Due to lack of space, these grey sources are not cited throughout the section. 2. Overviews of the system and its history are provided by Walker and Foster (2006), Clasen (2005, 118–130), and Blake (2003). 3. Nowadays, National Insurance is exclusively funded from employees and employers. Pensions account for the lion’s share of the outlays of the insurance. 4. Reforms enacted in 1988 encouraged citizens to contract into an Appropriate Personal Account to be managed by a private financial service. The rebate granted by National Insurance exceeded the real value of what the state would have otherwise paid to the retiree. Once employees contracted out of the second tier, they lost their claims to the additional state pension. 5. As a matter of principle, corporate pension plans were organized as a defined benefit scheme. In the 1960s, half of the working population was a member of such a scheme. 6. In 2005, employees contributed 11 percent of their salary exceeding a certain threshold, and employers added another 12.8 percent of this salary. 7. Therefore, about half of all British women are currently not eligible for a full basic pension. 8. Pay-as-you-go means that what the currently active contribute is immediately transferred to the pensioners. 9. The calculation of benefits is based on the average of earnings achieved over the whole life-span. In the 1970s, the best 20 years of revalued relevant earnings were the point of reference, to help citizens with incomplete earning records. To receive a complete pension, men must have worked 44 years (women 39)—from 2012 onwards, 30 years will suffice. 10. The real income of poor pensioners is increased through further payments such as housing allowances, an annual winter fuel payment, and free TV licences (to the over 75s). That said, as of the 2000s, a quarter of all pensioners in Britain fell below the poverty level and a similar number were just above it. 11. As of the mid-2000s, 60 percent of all corporate funds were invested in assets (10 percent less than a decade ago). 12. The regulation on tax relief permits personal investors to place money into all sorts of assets, including residencies, under a formula called self-invested personal pensions. The tax break is, however, capped. 13. The notion of vesting refers to the process whereby plan members (successfully) claim money that has been set aside for her or him if an employment is terminated. 14. Regarding the employers’ funding strategy, there are legal limits on self-investment and on loans from the fund to the sponsor. 15. The former is mainly concerned with corporate pensions; the latter has a remit to provide general information to private plan holders (including tools enabling users to compare products) and a right to slap fines on the pension industry should the latter disobey existing rules (regarding, for instance, the regulation on financial advice). The FSA also has a remit to certify tax-advantaged saving vehicles and to ensure market transparency. 16. Should the last salary paid to the member be a decade or more ago, the pension will not reflect subsequent inflation and promotion. 17. Annuities, a traditional pension vehicle of the self-employed, are used to convert an accrued lump sum into a personal income during one’s later life. Annuity rates often depend on assessed mortality risks.

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18. In 2004, more than 1.6 million citizens—about a tenth of those enrolled in private pension plans—had purchased this saving vehicle. Many of these were involved in further private pension plans. 19. Also, there are many small inactive accounts. Besides, the understanding about the interaction between state and private pensions seems to be limited among the population. 20. One cleavage is between different parts of Britain, with, for example, the Scottish care system differing in a number of aspects from the English one. Where differences exist, the following is confined to the situation in England. Overall, as of the mid-2000s, more than one million Britons were receiving publicly managed home care and/or community nursing; about half a million frail elderly were living in residential care including nursing homes. 21. Personal care comprises different forms of services, ranging from housekeeping work through assistance in one’s daily chores to personal hygiene. In practice, however, its task structure is varied, with the boundaries between personal care and outpatient nursing often being blurred. 22. Overviews of the system are provided by Means et al. 2003 (especially 60–84) and Netten et al. (2005). 23. A major driving force was long-term care being shifted out of the NHS from the 1970s onwards. 24. These trusts have been set up as key outpatient units of the NHS. They employ general practitioners and nurses but may also purchase additional services from external providers. A chief idea behind the creation of these agencies was to bring different kinds of service providers together, with representatives of local social service departments being given formal representation in the agencies’ boards. 25. Respite care is used to bridge periods in which family carers (must) have a break. Care attendance is often needed for citizens affected by Alzheimer’s disease, whereas daycare involves senior citizens with no or limited physical disabilities. 26. Towards the end of the 1990s, the voluntary sector made up for less than 10 percent of all providers in the residential sector and less than 5 percent in the domiciliary sector. However, one-third of daycare centres was run by voluntary agencies. Public (so-called in-house) providers are important here as well, yet their share has sharply fallen throughout the last decade. 27. Yet much local variation occurs. There is evidence for care managers spot-purchasing residential and nursing home places while in other places, longer-term grants are awarded and continued after a performance review. 28. At the turn of the century, about a quarter of residents in nursing homes and a third in residential homes were paying privately for services. 29. To some extent, then, ‘to understand Canada,’ it is essential ‘to plunge into the muddy waters of federalism’ (ibid., 46), that is, the complex division of labour between provinces and the federal state. Concerning overviews of the system and its history, see Snell (1996), Béland and Myles (2005), and Li (2006). 30. This went alongside an underpinning of the contributory principle. The universal rationale of the public pillar was slightly weakened through the effect of the then introduced claw-back mechanism (see below). 31. Or sécurité de la vieillesse in Québec. This benefit is quasi-universal. Due to a reform passed in 1989, up to 15 percent of the income exceeding a limit which roughly equals twice the average wage is clawed back by the state. This, however, has never touched more than 5 percent of Canadian senior citizens. 32. This is the case, for instance, in the Guaranteed Annual Income System (GAINS) introduced by the Province of Ontario in 1974. 33. There is, for instance, a child drop-out clause. Moreover, 15 percent of the lowest wages received by the insured during his professional career are excluded from the calculation of the ratio of income replacement granted to

Notes

34.

35. 36. 37.

38. 39. 40. 41.

42.

43. 44. 45.

46.

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the pensioner. The redistributive character of the scheme is reinforced by an upper limit set to pension benefits. Québec insisted on using funds generated by the contributions of plan members for investments in the economic development of the province and was opting out of the national system by force of a ‘Canadian compromise.’ Its investment agency, the Caisse de dépôt et placement achieved a strong ‘reputation for aggressive and competent investment management’ (Deaton 1989, 322). These are called régimes complémentaites de retraites in Québec. Note that there are slight differences concerning the regulation of the scheme as provincial governments have their own pension laws and supervisory authorities. In Ontario, however, sponsors and employees share the risk if reserves fall short. However, the amount of payments retirees receive from plans of which they have been previous members is often arbitrary and subject to arguments between the plan management and claimants. In general, employees leaving a job receive their money back or roll it into other saving products. Yet money contributed to an employer’s fund often cannot be vested prior to a specified period of time. Portability is often hampered due to problems arising from the valuation of contributions or benefits, differing benefit formulas, contribution levels, actuarial assumptions, and funding ratios between importing and exporting pension plans. As a result, the take-up rate is limited as compared to acquired claims. This office, entrusted with checking if plan management is sound, covers Canada without Quebec, which has its own inspection agency. Each plan has to present a balanced account within five years. At the beginning of the new millennium, assets of occupational schemes were invested in roughly equal parts in equities and bonds. This fund, established in 1980 and unique in Canada, is funded through a levy on pension sponsors. It only intervenes when a plan contains guarantees to pay defined benefits based on years of service and average pay. Nonetheless, it has run into a huge deficit in the first years of the new millennium. These group plans provide enrolees with a list from which they can choose investment options. Employers must provide guidance or make investment advice available. Employees then have to live with the results of their choices. In addition, law permits the transfer of one’s financial interest from an occupational pension scheme into a private saving plan, for example a life insurance. Furthermore, most of the latter are not creditor-proof, with the exception of a special model of a RRSP available in Québec. Overviews of the Canadian long-term care system are provided by Hirdes (2001), Vaillancourt and Tremblay (2002), and Sharkey et al. (2003). Much of the available literature centres on the situation in the different provinces. Insights into the policy framework relevant to Ontario are provided by Maurier and Northcott (2000); Québec’s approach to elderly care is sketched by Vaillancourt et al. (2003, in French). State funding consists of federal and provincial money. Federal subsidies are channelled through lump sums transferred to the provinces. More recently, a range of additional special national programmes for the promotion of home care were launched; moreover, in 2003, the prime ministers of the provinces and the federal government agreed on a federal five-year plan to inject new resources into the sector. The participation of the federal government in the funding of health care and social services has often been subject of interstate

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47. 48. 49. 50. 51.

52. 53.

54. 55. 56. 57.

58. 59. 60. 61. 62. 63. 64.

Notes arguments. In 1999, a so-called social union accord was passed; it stipulated a nationwide approach to the organization of health care and social services across the country. However, Québec refused to sign it. The Canada Health Act stipulates that the state is obliged to guarantee universal access, public administration, services free of charge, portability of entitlements (across provinces), and comprehensive coverage. The procedure is closely regulated. Quality issues are to be given preference over prices, with the care managers’ final choice being based on a 25 percent score for price and 75 percent for quality. However, for-profit provision was less developed among the 550 nursing homes supplying care services to 65,000 senior citizens as of the mid2000s. As the onset of the new millennium, only one in seven care homes was run by a nonprofit provider. Furthermore, most of the 40,000 senior citizens living in nursing homes were cared for by the public sector. From the 1980s onwards, community organizations were commissioned to provide a variety of support services. The aim was to partner with the CLSC and to involve local volunteers. The CLSC were often at the origin of such organizations deemed to foster community development. This policy was publicly negotiated between the government and representatives of the social economy sector during summits taking place as of the mid-1990s, all under intense media scrutiny. In particular, the admission to home care appears more generous in Canada than in Britain. Statistically, Canada spends slightly more on long-term care services than Britain (in GDP shares); the cleavage is much more salient when regarding the overall share of the very old in the total population, markedly lower in Canada than in Britain (see OECD 2005). Overviews of the German system and its history are provided by Clark (2003, 79–135), Clasen (2005, 95–98, 104–118), and Hinrichs (2005). This rate serves as the standard benchmark pension which, however, is in many ways a notional value as 45 years of employment are required to achieve this replacement rate. There are notional qualifying periods covering, for instance, military service, periods spent raising children, and temporary work incapacity. However, 1992 witnessed a formal switch to pensions indexed on net rather than gross wages. The reform also reduced the number of credit points granted for professional education (almost completely abolished a decade later). More importantly, the reunification began to pose problems for the public pension budget as East German retirees had to be included. However, new credit points rewarding the raising of children or care of frail citizens were introduced at that time. One in three companies offered a pension plan to (part of) their employees; almost half of male workers were entitled to an (albeit mostly small) benefit. In 2001, this period was reduced to five years. Social insurance delivered approximately 80 per cent of all benefits. Specific (nonmandatory) funds operated on behalf of independent professionals. Across the entire population, a considerable number of contractors called in their life insurance shortly after having contracted it. The key argument of the reformers was that the expected rise of payroll contributions (or nonwage costs) did harm to the competitiveness of the German economy. This applies to a standard pensioner, that is, an employee with a full career of 35 years of activity and without interruptions due to unemployment

Notes

65.

66 67. 68. 69. 70.

71.

72.

73. 74. 75.

76. 77. 78.

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or family obligations. Taking the actual retirement age into account, the expected replacement rate will not achieve 45 percent for many. A further, and important, element of the pension reform was the net reduction of work incapacity benefits which, thus far, had been granted by the public pension scheme. The amount of the subsidy depends on the family status of the contracting person and can make up more than €500 per year (for a family with two children). To be entitled, a certain percentage of the personal income has to be invested (1 percent in the first year, 4 percent from the fourth year onwards). Some persons are excluded from these advantages, for example workers holding petty jobs or citizens on welfare (social assistance). This implies that upper middle class citizens, as higher rate taxpayers, receive higher support in absolute terns. These agreements often also include the (partial) transformation of company-based long-term saving plans into a sponsoring of pension schemes. Employers’ contributions have remained mandatory and have to grow with the minimal interest rate fixed for the life insurance sector. Overviews of the German care system and its history are provided by Evers (1998), Kondratowitz et al. (2002), and Theobald (2004). In Germany, social assistance is a citizenship-based right to a means-tested basic income and to social services should the recipient be unable to pay for them. As a rule, benefits are granted by municipalities; a system of crosssubsidies relieves the budget of municipalities with an above average case load. These organizations achieved a quasi-public status as early as in the 1920s. On the basis of a subsidiary principle enshrined in social law, the responsibility for running social services was to be handed over to them when they made a motion. Standards and terms of reimbursement were to be negotiated with the (local) state. Even in our days, the local agencies of welfare associations are quite autonomous with respect to management issues and interlinked through a close network with coordinating and lobbying functions, including national headquarters. Sickness funds are the key administrative bodies for managing the German health care system. With respect to their legal status and governance regime, most of these bodies resemble the federal pension fund (see above). Having said this, there were more than two hundred of them as of the mid2000s; they were involved in a regulated competition of contribution rates and services; this competition, however, does not extend to long-term care insurance. More than 600,000 citizens were living in care homes; 450,000 senior citizens received domiciliary care. As of the mid-2000s, estimations said that approximately 750,000 Germans held such a plan. Germany is a country where family care was (and still is) very widespread. Due to changing patterns of demography, family composition, rising labour force participation of women, and increasing geographical mobility, however, the available pool of family caregivers is shrinking and calling the traditional culture of family care into question. Prior to the introduction of the insurance scheme, commercial suppliers, rare at that time, received lower reimbursements from public bodies. As of the mid-2000s, the residential sector in Germany embraced 10,000 care homes supplying 650,000 beds. This refers to the share of expenses for long-term care in the GDP (see OECD 2005, 26). The gap widens when considering the share of the very

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79. 80.

81.

82. 83. 84.

85.

86.

87.

88.

89. 90.

91.

Notes old among the population, much higher in Germany than in Canada. Compared to Britain, Germany scores slightly better than its European fellow. Inspection embraces the examination of written records, but also a number of interviews with carers. In addition, provider certification is widespread, albeit under various formulae. There is debate over whether one should refer to the complementary tier as a second pillar, because, according to a widespread typology, second-pillar pensions are usually neither mandatory nor pay-as-you-go. Rather, they are understood as company- or industry-based funded schemes. As the two mandatory tiers of the French pension system exhibit distinct characteristics, the notion of the second pillar will nonetheless be used for the complementary schemes. For an overview of the French pension system, see Clarke (2003, 52–72) and Observatoire des Retraites (2003). This fund is drawing on a special social contribution owed by all inhabitants and on further fiscal revenue, for instance, from sales of public property. The fund has a remit to invest more than half of this capital in the stock market, including funds for sustainable development. The two national roof organizations are the Association des régimes de retraite complémentaires (ARRCO) and the Association générale des institutions de retraite des cadres (AGIRC). For instance, the calculation of the reference average wage is based on the best 25 years in an employee’s contribution record. Employees of private industries can retire at age 60, but the retirement age in the public administration sector is often lower and is calculated according to assumed professional strain and health risks, with the aim of taking into account the lower life expectancy of these workers. One should mention that the diverse complementary pension schemes for civil servants were assigned a particular status until recently; access was voluntary (and far from generalized), and the pay-as-you-go mechanism only applied to two-thirds of the contributions (with the remainder being invested in the capital market). About 800,000 citizens were enrolled with these tax-advantaged schemes as of the mid-2000s (see below). It is noteworthy that, at the onset of the new millennium, only 40 percent of employees were working until being entitled to a pension benefit. Many workers aged 55 or more were jobless, invalid, or involved in a preretirement arrangement. However, the reference salary period has remained the last six months of one’s occupation, with wage supplements being excluded. Such supplements are however taken into account by a new complementary scheme which is based on shared contributions and a pay-as-you-go mechanism. Thus, the two-pillar concept is now applied to the public sector, too. Also, the reform abolished publicly subsidized preretirement, with the exception of employees having started to work very early. Employers were no longer permitted to let their employees retire at less than age 65 if the contribution record proved incomplete. Until 1993, employees with a low tax burden were granted a tax credit (negative tax) by the government. Half of the money invested in these saving plans was in fact used to purchase a life insurance for its members. These widespread, fully funded schemes emanate from collective bargaining at the shop-floor or industry level and are managed by private or nonprofit agencies. To be entitled to preferential fiscal treatment, they must comprise the entire staff of a company or of an industry. The biggest pension scheme of this kind is called Prefon. In this scheme, invested capital is guaranteed, and the effective interest rate depends on plan

Notes

92. 93. 94.

95. 96. 97. 98. 99. 100.

101.

102.

103. 104.

207

management performance. Until 2003, contributions were paid according to an income-related sliding scale. This scheme counted 500,000 subscribers in 2003. A survey conducted by the French Federation of Insurers in 2003 showed that a third of those holding a life insurance expected this to be a security for old age. The biggest of these associations which emerged during the 1970s is called Association française d’épargne retraite (AFER); as of the mid-2000s, it counted around 600,000 members. Until 1989, the government endorsed this organizational model by tax advantages granted to citizens purchasing life insurance via these associations. The idea behind this was to give policyholders collective market power vis-à-vis insurance supplies. Many insurance companies, however, established their own associations in order to demonstrate the trustworthiness of their products. Moreover, the enrolees’ associations are largely funded by insurance companies. The employee’s contributions may also stem from premiums taken out of profit-sharing schemes, mandatory for medium and large companies in France. Specialists have argued that the subscription of such a plan does not make sense to those with a tax rate up to 25 percent. The subscriber may, however, sign a form through which he or she agrees to a riskier investment policy. For major elements, see Fagnani and Letablier (2005), Frossard et al. (2004), and Davies (1998). A comprehensive review of the system is provided by the Cour des Comptes (2005, in French). As of the mid-2000s, more than 1.2 million elderly people were receiving publicly subsidized home care; 700,000 senior citizens were living in residential institutions. Three-quarters of these were in a state of frailty. This is the case for one-third of the care centres. Undersupply is obvious as the latter have to refuse many claimants. In some places, the centres out-contract services to independent nurses. As of the mid-2000s, there were approximately 7,000 organizations of this type in the home care sector. In 2004, more than 50,000 self-employed nurses were providing services to approximately 200,000 persons (aged 75 or more). Integrated care centres, which the sickness funds—which roughly resemble their German counterparts—contract on the basis of block grants for a given territory, were reaching 80,000 senior citizens. The National Fund for Solidarity and Autonomy is governed by a board comprising representatives of provider associations, social partners, and the state, with the latter holding the majority. The social partners are more heavily involved in the governance of the sickness funds (as in Germany). However, in contrast to Germany, there is no regulated competition in the French health care system. Altogether, 60 percent of the public funding for elderly care is covered by the sickness funds. By 2005, the personal allowance was granted to almost 900,000 senior citizens. On average, the départements, responsible for granting the benefit, agree up to 80 percent of the maximum sum. Senior citizens suffering from Alzheimer’s disease are often not granted the hours required for personal attendance. Citizens can use the service of a (mostly) nonprofit broker (called association mandataire), which provides job candidates and administers the employment contract. In addition, they can pay their services by using a special cheque which may be sponsored by their employer, a pension fund, or private insurance company, and which comprises payroll contributions and taxes due to the employee (see also section 3.2).

208

Notes

105. In 2003, more than half a million elderly people were benefiting from these exemptions. The fiscal advantage amounts to 50 percent of the tax due. 106. As regards staff, these requirements are, however, limited in scope. Just onefifth of the home care personnel in France hold a formal qualification, for instance. 107. Since 2000, it has been possible to out-contract the provision of information, the assessment procedure, and the coordination of service agencies to special quangos. These Centres locaux d’information et de coordination exist in many places but are far from covering the whole territory. 108. The rise of the home help model was most marked in the 1990s. Until 1997, exemptions from tax and payroll contributions were not granted to care agencies. 109. At the beginning of the new century, less than 1 percent of service hours in the home care sector was provided by for-profit agencies. 110. However, this licence does not include a fixed staff ratio to be ensured by the care homes. As of the mid-2000s, the residential care sector embraced more than 10,000 care homes. Nursing homes made up for a tenth of the overall sector. 111. With the instigation of the personal allowance in 2002, the subsidies the départements previously granted to providers were reimbursed by the aforementioned statutory national care fund. It is worth mentioning that elderly people in residential care are entitled to housing allowances. 112. France was not included in the afore-cited OECD study. However, a national report (Cour des Comptes 2005, 292) reckoned that public resources spent on long-term care made up one percent of GDP by 2003, a rate only slightly higher than the one the OECD found for the other countries under review here (with data referring to 2000). 113. However, across the four systems under study, group- or company-based DC plans manage retirement provision on behalf of enrolees in a way similar to what is typical of (case-) managed welfare markets. Investors join the plan and leave the actual business to trustees. In other countries (and probably in Britain from 2012 onwards), this approach does (or will) play a greater role, as large (nonpublic) pension funds (will) exist which administer personal plans on the basis of generalized investment policies. 114. The following draws, inter alia, on Bridgen and Meyer (2005), Ring (2005), Mann (2006), Hyde et al. (2006), and Turner et al. (2005). 115. By 2004, 1.5 million individuals held a Stakeholder Pension, mostly with small contributions, and, in one in five cases, with no contribution made at all. Many retail companies withdrew from marketing Stakeholder Plans because of the imposed commission cap. 116. Following the stock market bubble burst, S2P looked in fact more attractive, although credits for unemployment and periods of sickness had been removed. 117. As of the mid-2000s, about nine in ten final salary schemes were estimated to be facing a funding shortfall. The range of bigger companies exhibiting black holes in their pension scheme included Royal Mail, British Telecom, British Airways, BAE Systems, Rolls-Royce, diverse water companies, and many others. More recently, the gaps have been reduced, however. 118. Employers used to contribute 12 to 16 percent of salary to DB schemes but in most cases opted for a much more modest 3 to 6 percent after switching to DC schemes. 119. Estimations said that, throughout the 1990s, less than 10 percent of those leaving a final salary scheme changed into a money purchase plan. Overall, the percentage of employers making any pension provision for their employees

Notes

120.

121. 122.

123. 124. 125.

126. 127. 128.

129. 130. 131. 132.

133. 134.

209

had declined from more than 50 percent, at the beginning of the new millennium, to 44 percent in 2005. Cases in point were the so-called Maxwell scandal at the onset of the 1990s (with a pension fund being illegally plundered by a company), followed by the shipping group Maersk. In the new millennium, the perhaps most spectacular case was the bankruptcy of the owner of a car industry supplier (Turner & Newall, owned by Federal Mogul), leaving 20,000 pensioners and 2,800 workers without pensions. Altogether, 80,000 workers were affected by pension losses due to bankruptcy by 2004. Some had paid for 40 years into their company schemes only to be left with 10 percent of their entitlements. The proportion of working adults making no provision for retirement at all rose from 40 percent in 1998 to 45 percent in 2004. This holds true irrespective of measures which appeared detrimental to private sector planholders, such as the reduction of the price indexation imposed on corporate pension benefits (down to 2.5 percent in 2004) and cuts in the rebate granted to enrolees of S2P contracting out of the scheme. Amongst other things, the FSA developed a decision tree device meant to help people interested in personal saving vehicles make appropriate decisions. The cap (applying yearly, on the value of the accrued investment fund) now amounted to 1.5 percent (after 1 percent previously). The scheme was relabelled Personal Account in a White Paper published in 2006. It was envisaged to invite bids from the pension industry, of which one with administration costs not exceeding 0.3 percent will be selected by the government. Examples include the steel group Caparo and the insurance company Scottish Widows, The following is based, inter alia, on Glendinning and Means (2006), Knapp et al. (2004), Means et al. (2003), Netten et al. (2005), and Wanless (2006). In terms of care-providing agencies, this rise was from 5 percent in 1993 to almost two-thirds 10 years later, with the total number of hours provided by the independent sector increasing by approximately 70 percent over the same period. It is noteworthy, though, that a move towards more independent-sector provision does not necessarily entail a merely opportunistic approach to care work. Indeed, most private sector professionals previously worked in the public sector, the culture of which remains influential. Many domiciliary providers ‘attach relatively little weight to income and profit but aspire to combine empathy, skills use, and autonomy’ in their professional self-understanding (Kendall et al. 2003, 17). Charging policies became subject to new national guidance in 2003. A tendency underscoring this development was public–private partnerships for building and running nursing homes. As of the mid-2000s, above two-thirds of the revenue of care homes was stemming from the public burse. Social service departments were grouped into 10 regional agencies in order to concentrate purchasing power and contractors’ prices. Also, a battery of newly created performance indicators increased the competitive pressure on purchasers and providers. This reimbursement gave local organizations clear responsibilities around notification of the need or services, assessment, and service provision within tight timescales. Further initiatives in that sense have been the instigation of a Commission of Social Care Inspection (with a remit to provide rigorous outside inspection); the creation of a General Social Care Council (entrusted with the design of a new social work degree); and the establishment of the Social Care Institute

210 Notes

135. 136. 137.

138.

139.

140. 141. 142. 143. 144. 145. 146. 147.

148.

149. 150. 151.

for Excellence (expected to roll out best practice throughout the entire care system). The analysis of changes occurring in Canada relies on the same mix of sources as used for the case of Britain. Key dynamics are described by McDaniel (2003, in French), Bèland and Myles (2005), Li (2006), and Tamagno (2006a, b). In Quebec, this activity is part of the legal mission of the Régie des rentes. For instance, Ontario introduced a so-called Locked-In Retirement Income Fund in 2000. This fund enabled individuals facing particular hardship (such as terminal illness or excessive indebtedness) to remove money from their account without losing the tax-advantage underlying their saving scheme. A similar programme exists in Quebec. In 2004, provinces adopted new standards for calculating cash settlements for those plan members who leave a firm and want to withdraw their pension claims. These standards had been developed by the Canadian Institute of Actuaries in order to accurately reflect the market value of the funds’ assets as best as possible. As a result of these new standards, some claimants were losing rights compared to preexisting practices, for instance, because current interest rates were extrapolated for 10 years. Typical examples were Stelco, Air Canada, or the farm cooperatives, but also, though less dramatically, some huge traditional companies such as Via Rail, Imperial Oil Ltd., Bombardier Inc., and Hydro One Inc. It is noteworthy that private sector trade unions have in most cases no right to negotiate pensions and bargain postretirement benefits. Good examples are the Toronto Police Benefit Fund, the Ontario Municipal Employee Retirement System, or Teachers. Altogether, the share of workers covered by occupational pension plans shrunk from 47 percent in 1977 to 39 percent by 2003. This is the case for Ontario but not for Québec. The following again concentrates on Québec and Ontario. Major sources used for this section include Abelson et al. (2004), the Caplan Report (2006), Vaillancourt et al. (2003, in French), and Bernier (2006). As of the mid-2000s, about 550 nursing homes were supplying care for 65,000 persons in this province. A survey found that more than half of the home care workers had changed jobs within a single year. For instance, in 2004, CCAC were publicly blamed for cancelling contracts with nonprofit providers in order to purchase greater packages of care from larger for-profit companies. Borrowing a policy model developed in France, the provincial government attempted to grant service-cheques to users receiving direct payments. Since these cheques included payroll contributions and social insurance rights, they were supposed to undermine nondeclared work. These standards had been abolished 10 years ago in order to grant nursing homes more flexibility in managing their business more efficiently. Moreover, a telephone hotline was established through which users have access to independent information wherever they lived. The recent evolution in Germany is depicted by Berner (2005), Viebrock (2004), and Lamping and Rüb (2004). Notably, rankings showed diverging results, and even the national foundation for consumer protection published unsound market overviews (a survey in summer 2002 had to be withdrawn in the wake of errors being revealed). Different assumptions were made about the reasons for this. Professionals from the retail financial sector blamed the complex regulatory framework (which they thought made personal saving plans inflexible); other experts

Notes

152. 153. 154. 155. 156. 157. 158.

159. 160. 161. 162.

163. 164. 165. 166.

167. 168. 169.

211

alluded to a low motivation among selling agents because of relatively modest commission rates which, in addition, had initially to be apportioned over a period of 10 years. Should the contractor have changed his supplier within this period, charges were not due for years ahead. It is noteworthy that, until 2005, women had to pay higher premiums on private saving plans because of their longer life expectancy (see below). In 2006, less than one in five personal saving schemes was held with an investment fund. Estimations said that, between 2000 and 2005, capital depreciation amounted to one tenth of the total value of private assets held in Germany. Four in five companies with more than 20 employees offered a company-based scheme by 2005. To this date, about 15 percent of all employees had converted earnings in private saving schemes. Agreements on asset-based saving vehicles under the control of the social partners were passed in a number of industries. In the metal sector, only a tenth of eligible workers had opted for such a scheme until 2006. A good example for such a switch was Volkswagen, the biggest car producer in Germany. An interesting detail is that some quango-employers (e.g., sickness funds) left the scheme and joined that of other industries offering higher profitability. Only part of the public (service) sector was covered by collective agreements proposing the aforementioned salary sacrifice option. The overall market for life insurance was shrinking as of the mid-2000s. The media reported clients demanding a share of the agent’s personal selling commission when purchasing a life insurance product. In 2006, no less than 3,400 different products qualifying for public subsidies were traded on the market. A further issue was that workers presenting bad risks to private pension suppliers had no chance to include work incapacity benefits in their plan package. The insurance industry even advocated a further reduction deemed to help wipe out its deficits. In addition, tax advantages related to life insurance were capped. Until 2005, a double advantage had existed. because taxes were imposed neither on income invested in such plans nor on the plan’s surplus. As a reaction to the new regulation, some life insurance companies started to sell plans with options for permanent withdrawals; thus, plan holders were seduced to live off their retirement savings ahead of time at the risk of losing the remaining tax advantages (conditional on holding a plan for at least twelve years) Recent dynamics are sketched by Theobald (2004), Meyer (2005), and Le Bihan and Martin (2006). Altogether, there were two million recipients in 2005. This was reflected by a creeping decline of the share of cash benefits in the benefit portfolio of the long-term care insurance. In 2001, half of all households accommodating frail elderly people had to afford up to €250 per month for covering costs related to elderly care. However, less than 10 percent of people with a household income inferior to €2,500 were purchasing domiciliary care services on their own. Overall, the number of domiciliary care providers rose from 8,000 in 1995 up to 12,000 in 2004. As of the mid-2000s, there were 10,000 old people’s homes supplying 650,000 beds. Thus, transitional care services were set up in a number of places. Another innovation was respite care services free of charge unless they were used for more than four weeks a year or the frail person was entitled to a small care package only.

212

Notes

170. For accounts of recent developments, see Roggen (2004), Mandin and Palier (2005), Sterdyniak (2005), and Brun-Schamé et al. (2006, in French). 171. This service was also offered by a publicly sponsored call centre (called France retraite). 172. Specialists argued that this was due, among others factors, to new habits of saving that resulted from the baby boomers’ economic situation. 173. Frequently mentioned examples are Elf-Acquitaine, Société Générale, and the insurance industry (which has an industry-wide collective agreement on occupational saving plans). 174. Ten thousand company contracts were established within a single year, with 40,000 employees being concerned by 2005. 175. The aforementioned AFER (see also chapter 3.1). 176. Outstanding cases were Michelin, Rhodia, and Arcelor. 177. Major examples are France Telekom, Vivendi, and Alcatel. 178. This was permitted up to a limit of €10,000. According to specialists, however, the lion’s share of this capital was reinvested in other saving vehicles promising higher profitability. 179. Major developments are depicted by Frossard et al. (2004). See also Le Bihan and Martin (2006) and Rivard (2006, in French). 180. On average, the part incumbent on users rose from 5 to 12 percent of total expenses. In some départements, moreover, the amount of hours granted for personal care was reduced in line with pay rises in the sector. 181. Business models were varied. One quite successful private company, Adia d’Adom, settled in personal leasing and offered home helps to elderly people. Another example is Adahp Services, a network of commercial service providers specialised in personal care to senior citizens. By 2004, this undertaking was contracting 43 franchisers employing 350 workers, with the network’s turnover quadrupling between 2002 and 2004. 182. Elderly people were meant to purchase service hours from an individual or from care agencies by using a new, simpler, formula of the prepaid cheque mentioned in section 3.1. 183. However, few agencies became certified in the first years of the existence of this procedure; one reason for this was that provider organization incurred all related expenses. 184. By contrast, the public sector was stagnating and the nonprofit sector grew by just 40 percent. 185. This, for instance, was the case with the leading provider, Orpea, running 10,000 places all over France. 186. Care homes were not meant to lose money through this operation, but those homes that in the past had been treated over-generously now had to accept lower increases in funding from national health care insurance. 187. For instance, the number of persons served by publicly funded outpatient care centres was meant to increase by 25 percent. 188. This qualification is suggested so as to leave aside patterns of welfare provision targeting high-income earners. De facto, it also excludes citizens who have no chance at all to access market-based benefits or services.

NOTES TO CHAPTER 4 1. A remarkable exception is social anthropology, which is strongly interested in the plurality of ways in which human societies may organize themselves and understand their life-world (Eriksen 1995). Though the anthropological

Notes

2.

3. 4.

5.

6. 7.

8.

9.

10.

11.

213

perspective may be of limited relevance to the analysis of differences within Western civilization, contemporary sociology owes much to this strand of academic work as it has raised awareness of the cultural bias of human action, for instance, with respect to the notion of utility, which is infused with social meanings differing between communities. Concerned with this endeavour, political scientists too express some grief over ‘the immense variety of connotations connected with the term ‘culture’ . . . which makes it a complicated concept’ (Lane and Ersson 2005, 17). One must also take account, however, of the writings of the ‘early’ Marx centring on the ‘concept of ideology’ (Joseph 1998, 14). In his essay on ‘The German Ideology,’ he argued (together with Engels): ‘The ruling ideas are nothing more than the ideal expression of the dominant material relationships’ (Marx and Engels 1978, 172). This is not to say that Marx maintains culture is consistent. Rather, he ‘denies the “oneness” of the dominant culture, he refuses to view ruling class ideas as internally consistent, and he categorically repudiates the notion of total cultural incorporation’ (Archer 1996, 55). In terms introduced by Schumpeter (1934) who argued innovation proceeded through a permanent process of destruction and reconstruction—something that appears to have considerably accelerated with the extension of globalized capitalism. In the recapitulation by Thompson et al. (1990, 129): ‘The consequence of internalizing beliefs about what is sacred and profane, . . . or what ideas make sense, is the protection of a particular order.’ One should note, however, that Weber was fairly pessimistic about the evolution of modern society, because he thought noneconomic values would be ‘crowded out’ by ever more rationalized economic agency and the ‘iron cage of bureaucracy.’ Regarding the mechanism ensuring the compliance to social norms, Parsons maintains that whether a social actor ‘feels like it or not, he is obliged to act in certain ways and risks the application of negative sanctions if he does not’ (Parsons 1964, 98–99). According to many, this understanding rules out any leeway people have (and use) for making a difference. As Archer (1996, 36– 37) argues, Parsons erroneously views the cultural subsystem (of his time), ‘as shared (when much is imposed) . . . and as producing consensus (when the differential accentuation of particular components can generate most severe conflict).’ However, she concedes ‘a strong element of interpretative licence’ (ibid., 37) in other parts of Parsons’ work (namely, the model of pattern variables). More precisely, Habermas suggests that instrumental reason risks being overly favoured by rationalized economic and bureaucratic systems ‘colonising’ the life-world of individuals, with expressive interests and normative reasoning being crowded out. Hertzler further argues that ‘institutions are carriers of the society’s culture.’ This idea is also deep-seated in contemporary moral philosophy. Shionoya (2005, 27), for example, contends that ‘it is culture that constructs and characterizes institutions in which human interests are developed.’ Archer provides a widely disseminated sociological model of cultural change. Making a difference between a cultural system and sociocultural (human) interaction, she argues—in a nutshell—that there are causal influences exerted by the cultural system on the sociocultural level but that, given the interaction between groups and individuals at the sociocultural level, sociocultural practice constantly re-elaborates the cultural system.

214 Notes 12. This explains the paradox that a nation’s culture, although often being associated with a range of shared ideas, is ‘riven with particularistic, contradictory, shifting, sometimes bigotic, often exclusive value positions’ (Baldock 2000, 134). 13. Albeit by private collectivities rather than by the state. 14. Rather, in this part of the world, social welfare provision remained contingent upon, and developed with, values referring to the economic ‘basement’ of society, that is, communitarian enterprises deemed responsible for the wellbeing of their workers. 15. This research highlights for instance that, in the U.S., ‘support for welfare state policies derives from sympathy and humanitarianism, not egalitarian principles’ (Feldmann and Zaller 1992, 269, 298). 16. In this particular sense, the ‘study of institutional . . . traditions discloses the constitutive codes of a culture’ (Lin 2005, 733). 17. This also includes studies on care regimes (see, e.g., Behning 2005) which sometimes explicitly start from the assumption that ‘nations . . . adopt cultural models of care’ (Hochschild 1995, 352). 18. Almond and Verba found that political cultures varied in terms of the following categories: alienated or allegiant cultures on the one hand and deferential or participatory cultures on the other. 19. Rothstein (1998) even argues that institutions produce the normative framework governing the welfare state’s operations as they have a norm-setting function. His approach draws attention to the historical dimensions of a culturally based process of institution building. ‘At certain special historical moments, . . . actors can create institutions’ (Rothstein 1998, 138), and this process is contingent on mainstream sets of values. At later stages of a welfare state’s history, he argues, institutions may reinforce or even conserve particular cultural patterns although they may not fully correspond (anymore) to mainstream values held in society. 20. Fligstein (2001, 15) especially refers to what he calls the ‘production of a local culture that defines local social relations between actors’ in the interest of distinct market players who aim at surviving in a market or dominating it. 21. In her historical account on the proliferation of life insurance in the U.S., Zelizer (1978, 596) shows how ‘marketing systems . . . do not develop in a sociological vacuum. Their structure and characteristics are deeply interrelated with such other variables as customers’ social and cultural backgrounds.’ 22. Slater and Tonkiss (2001, 12) refer to this as the ‘apparent democracy of the market.’ 23. This character may adopt an institutionalized character. Indeed, it has been argued by economic theories on the nonprofit sector that the ‘non-distribution constraint’ imposed on charitable organizations is a key signal to donors that these organizations are trustworthy (Hansman 1986). 24. This was underpinned by tendencies to partially integrate elderly care into health systems, at least in countries with a strong nursing profession. These countries in particular have seen the ‘extension of the principles and mechanisms of citizenship-based health care into the context of hitherto familyfocused, selective and local home care’ (Anttonen et al. 2003, 179). 25. Welfare reform in postwar Britain and Canada embraced the idea of providing elder citizens with a decent basic pension. Countries with a social insurance tradition complemented their pension system with special regulations such as the minimum vieillesse in France. In Germany, the provision of minimum pensions was long left to means-tested social assistance; yet this has changed more recently, with poor senior citizens now being automatically entitled to a basic allowance.

Notes

215

26. However, some countervailing tendencies should be noted as well. Schemes based on a universal retirement age were privileging those with a longer life expectancy. On the other hand, many pension systems were (and still are) designed to include specific rules according to which workers with injurious jobs were (are) entitled to retire earlier. In addition, they often embrace(d) invalidity insurance. 27. Detailed evidence of developments in care and pension systems is provided below. 28. Very prominent in France, but also in the U.S. (see Cohen 2003). 29. That is, lump-sum public subsidies to care-dependent people who are encouraged to purchase services freely on the market (see chapter 2). 30. One should add that the nonprofit sector plays a major role here, as explained in chapter 2. Hence the overall development is shaped by ‘sectoral shifts . . . in regard to the relationship between market-controlled, associative, and statecontrolled forms of service production,’ in the terms of Kaufmann (2001, 20). 31. These considerations address, inter alia, norms regarding acceptable inequalities, legitimate businesses, limits to commodification, or entitlements to purposeful social support (see the discussion in Sayer 2000). 32. The moral dimension of questions relating to gender is mirrored in the (varying) assignment of social roles to the two sexes, with notable consequences regarding pension plan coverage and the division of care work (Ginn et al. 2003; Pfau-Effinger 2005b). Images about what constitutes an ‘ordinary’ woman’s life course, and how the latter links with men’s professional careers, have always proved critical for the institutional setup of old-age provision. 33. Indeed, one cannot but agree with Robertson (1997, 433) when she states that a key ‘moral issue at the heart of the modern welfare society is when does need give people the right to make a claim against the collective?’ 34. The least one can say is that, across the Western world, there have been powerful intellectual and political movements supporting principles of social justice (Stanfield 1987; Jordan 1998; Shionoya 2005, 49–80). 35. In many cases, the experience of war was a major trigger of this interpretation, even though this was mostly one cognitive element among others (see, e.g., Skopcol 1992; Page 1996, 60–77). 36. Snell (1986, 101), for example, has argued that Canada’s basic pension was gradually acknowledged as ‘a new form of property’ based on a ‘culture of entitlement’ which recognized ‘the contributions of the elderly to society’ (id, 221). 37. Private and church-related charities became involved in partnerships with the state quite early in the twentieth century. In many parts of the Western world, moreover, the provision of elderly care was devolved to local authorities. Frequently, however, social assistance or welfare departments paid for the provision of services just up to a certain ceiling or only after means-testing. Hence there is an obvious proximity between elderly care and the public governance of poverty. 38. The introduction of long-term care insurance in Germany, the recent instigation of a universal care allowance in France, and the debate on free public care provision taking place in Britain at the end of the 1990s all show that there has been some normative spillover from the pension and health care system to the field of elderly care. 39. This extends to ‘cultural conceptions’ of what is ‘unethical’ in the (current) public management of welfare provision (Brandsen 2004, 43). 40. This is underpinned by recent attempts to institutionalize human rights to social care in certain jurisdictions (Ellis 2004).

216 Notes 41. Britain appears as a latecomer in this respect, as the issue was still high on the political agenda in the first years of the 2010s (Ginn 2003). 42. Deaton (1989, 21) rightly contends that individual savings have been ‘central, if not always explicit, ideological principles . . . of state income security arrangements for the elderly’ in countries such as Britain, Canada, and the United States throughout the twentieth century. 43. A given mode of operating transactions may, for example, be regarded as undermining an achievement-based social stratification and thereby reducing overall wealth. Conversely, an alternative mode may appear as entailing extreme and unacceptable hardship for a minority of people. 44. As to eldercare and pensions, see, for example, Gelissen (2001), Mau (2003), or Deeming and Keen (2003).

NOTES TO CHAPTER 5 1. The newspapers reviewed are specified in each of the country sections. 2. For example, the review embraces a greater number of newspapers in Germany than in Canada. Besides technical reasons, this choice reflects a lower concentration of the newspaper market in Germany. 3. This holds true even though journalists do often not appear as a much trusted profession in contemporary society. 4. Sources are provided for each of the reported statements. However, it is not possible to give the complete record of sources found for a given issue. This would in fact imply an immense apparatus of footnotes and explanations, extending beyond what can be documented in a study covering two organizational fields (containing several subfields) and four countries. 5. As the quotations used in the following for illustrating typical streams of comments are only given in English, one has to live with some of these subtleties being concealed by the author’s translations. 6. This review retraces articles from three newspapers mainly: the Guardian (GU), the Independent (IN), and The Times (TI). 7. The first statement stems from Age Concern (cited in GU 3/11/05); the opinion of the ‘National Association of Pension Funds’ appears in TI (23/9/05). A typical comment from a journalist criticizing pension entitlements for women ‘after lives of caring and hard work’ is given in GU (23/5/05). 8. This consultant was head of a commission that had a remit from the government to design the pension reform to be devised by 2006. Concerning his comment, see IN (28/5/05). A statement from a union is cited by GU (18/11/05). 9. See GU (30/9/05 and 28/11/05). 10. The statement comes from a business organization (and is cited by GU 19/2/04); see also TI (9/8/03). 11. This is a statement of the leading public sector union, published in GU (10/12/04). 12. See GU (12/9/02), TI (12/9/03), and TI (17/10/03). 13. Critiques from journalists appear in TI (3/12/04). 14. See GU (5/9/03) and TI (7/9/04). 15. For these different standpoints, see TI (31/10/05), TI (26/11/05), and IN (18/10/04). 16. Concerning this, and the previous argument, both advanced by journalists, see IN (12/10/04) and GU (6/10/03). 17. The latter point is raised in TI (3/9/03). The opinions of several advocacy groups appear in GU (16/11/05).

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18. These two quotations are taken from GU (16/11/05) and GU (29/11/03). 19. Regarding the journalist’s comment, see GU (29/11/05). The statement endorsing it stems from the National Institute for Economic and Social Research (GU 4/2/05). 20. See GU (6/10/04). The Pension Regulator concerns pertain to savers seduced by financial advisers to unlock their personal saving accounts for investing accrued savings in other items. The two preceding comments are taken from GU (22/1/05) and TI (16/8/03). 21. Both the industry and government are blamed for erroneous information about the possible payoff resulting from contracting out (see IN 18/6/04 and GU 18/8/05). 22. The arguments advanced by the insurance sector and the employer association are featured in GU (10/10/02) and TI (11/12/04). 23. These are quotations taken from TI (11/9/04) and IN (29/1/05). 24. See TI (11/9/04) and GU (9/10/04). 25. See TI (5/5/05) and GU (12/12/02 and 14/10/04). 26. The two statements from the unions are published by IN (19/6/04 and 4/2/04). 27. See GU (22/11/02 and 22/8/05). The appeal to corporate social responsibility refers to campaigners who have been highlighting the role pension funds play in supporting the arms trade, for example (see GU 2/11/02). 28. Concerning the two latter assertions, see TI (13/6/03 and 16/8/03). 29. The two statements are taken from IN (2/10/04) and TI (3/10/03). 30. See TI (10/8/04) and IN (16/10/04). 31. Regarding the first statement, see GU (17/5/05). The think tank is referring to mis-selling practices prior to the instigation of the Stakeholder Pension (see GU 4/10/02). 32. Many statements refer to a dividend tax credit for pension funds abolished in 1997 (see, e.g., IN 10/11/04). 33. This claim, advanced by the association of insurers, appears in GU (14/10/04). The previous comment on price caps stems from TI (4/8/03). 34. This statement of the government consultant is taken from GU (18/11/05). 35. This assertion is grounded on a survey published by this organization (see GU 21/10/03). 36. These two statements appear IN (8/2/05) and GU (11/12/04). 37. The latter three quotations are taken from IN (23/10/04), TI (26/11/05), and TI (11/7/03). 38. This question is posed by the aforementioned campaigner (see TI 22/2/05). Concerning the two previous statements, see GU (11/10/04 and 1/12/05). 39. Regarding the journalists’ claims, see GU (17/2/04), TI (12/11/05), and IN (12/10/04). 40. See IN (31/5/05). 41. These statements advanced by financial advisers are taken from IN (21/5/05) and GU (21/5/05). 42. For these statements, see GU (7/11/02) and IN (23/7/04). 43. This is an argument advanced by a journalist writing for IN (4/5/05). 44. This is an expression used by a journalist (see IN 13/10/04). The complexity of the system is deplored in numerous communications from all sides of the pension universe. 45. The statement of the government consultant is taken from TI (14/10/04). The formula ‘pray-as-you-go’ stems from a leading (voluntary sector) campaigner (see IN 23/7/04). The statement on the pension industry’s unfitness, made by a consumer organization, appears in GU (11/6/03).

218 Notes 46. Concerning the journalists’ comments, see GU (16/9/03; 16/10/04; 12/10/04). 47. This statement is taken from GU (29/9/03). 48. This opinion by a representative of a national research institute is expressed in GU (4/12/05). The afore-quoted statement of the charity is taken from GU (26/9/04). 49. See TI (20/4/04) and GU (7/9/05), with statements from Age Concern and the Alzheimer’s Society. 50. See TI (28/10/03) and GU (7/9/05). As for think tanks, see the statement of the think tank in GU (2/7/05). 51. See IN (15/9/04). A similar position is held by some members of a Royal Commission that, in 1999, was entrusted with consulting the government on the funding of elderly care (see IN 29/9/03). 52. See IN (23/2/02). 53. Regarding the three quotations, see GU (7/2/03), TI (11/2/03), and GU (17/12/03). There are also concerns about ‘inappropriate medication’ of residents in care homes. 54. As to statements stemming from provider and professional associations, see TI (20/1/04 and 28/9/04). Regarding think tanks, see GU (20/10/04) or TI (15/9/05), where it is also argued that ‘the paltry “pocket money” given to older people in residential care homes undermines their dignity.’ 55. The report is based on an investigation conducted by the Office of Fair Trading (TI 21/5/05). 56. See IN (8/4/04) and GU (17/7/04). The aforementioned statement of the consumer group is presented by GU (6/12/03). 57. See a comment in GU (17/7/04) and the opinion of a charity network published in GU (6/12/03). 58. This is a widespread opinion among journalists (see, e.g., GU 20/10/04) and endorsed by statements of academic experts and national quangos like the Care Inspectorate (see TI 13/1/04 and 9/11/04). 59. The argument of the community minister is cited in GU (2/3/05); regarding the preceding statements, see GU (18/5/05 and 20/7/05). 60. TI (21/5/05). In this article, the consumer group welcomes the Financial Services Authority being entrusted with the regulation of equity-release schemes. Regarding the comments of journalists on this subject, see TI (27/12/03). 61. The quotation is taken from IN (30/3/05); see also a comment on society’s alleged indifference towards the abuse of elderly people, published in GU (17/12/03). Statements of journalists addressing informal care appear in TI (22/3/03) and GU (8/5/02; 14/7/04); the point of view of charities is given in GU (8/5/02 and 2/7/05). 62. On the latter point, see GU (19/3/03) and TI (3/10/03). Inadequate funding is also bemoaned by an independent think tank (see GU 2/7/05). 63. See GU (7/2/03). 64. See GU (5/7/02). A colleague of his adds that spending on old people should be contrasted with ‘the dismal levels of taxation on the super-rich’ (IN 30/3/05). The critical comments mentioned before are taken from IN (25/7/05, regarding the charities’ complaint on ‘creaming’) and GU (17/7/04, on incorrect assessments). 65. This statement is taken from GU (1/5/02). 66. The first remark comes from a national umbrella for voluntary organizations (see TI 13/12/04); the second assertion stems from a faith-based care home network in Scotland (GU 29/1/03). A journalist’s comment concurring with the providers’ concerns appears in IN (3/2/05). 67. See GU (17/12/03 and 13/7/04). Special concerns are raised over ‘shamefully under-regulated private care homes’ (TI 1/2/05).

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68. See TI (1/2/05). 69. See TI (1/2/05). The preceding comments are taken from IN (9/6/03 and 25/4/02). 70. See TI (18/8/03 and 22/7/03). 71. See IN (27/3/03 and GU (9/11/05). Concerning the example of the charitable trust, see GU (2/11/05). 72. See TI (19/7/03). Concerning the (alleged) characteristics of private insurance, see IN (8/4/04) and TI (21/5/05). The statement on the people’s reluctance to face future risks is taken from GU (17/7/04). 73. These critical remarks come from an independent think tank (see GU 2/7/05). 74. The quotation is taken from IN (8/4/04). Further comments appear in IN (1/3/03 and 1/5/04). 75. See TI (28/10/03), for this statement, and GU (20/11/04) for the opinion of the representative of the care home industry. 76. The statement of the association is taken from GU (18/5/05). The viewpoint of charities appears in GU (8/12/04 and GU 7/4/04). 77. For the journalists’ statements, see IN (3/2/05) and TI (1/2/05); the comment of the consumers’ association is taken from the latter. The viewpoint of the think tank appears in GU (2/7/05). 78. See GU (7/9/05 and 2/4/03). 79. The expert is talking to TI (13/1/04). The opinion of the Local Government Association appears in GU (15/10/03). Regarding the standpoint of journalists, see IN (25/4/02), TI (27/9/02) and TI (28/10/03), where the mechanism is seen as being ‘perverse.’ 80. The quotation is taken from GU (17/12/03). It is worth mentioning that the debate about the public management of the care system extends to concerns over the (allegedly) complicated collaboration between health care and personal care services, or between professional and volunteers. These dimensions of the debate have not been retraced systematically by this review (for any of the countries). 81. This statement comes from a report of the Social Services Inspectorate (see TI 15/12/03). The aforementioned quotation is taken from GU (10/4/04). 82. This review embraces the Canadian Press (CP), which is a central press agency, and leading newspapers in Ontario and Québec (Toronto Star [TS], La Presse [LP], Le Devoir [LD]). For particular issues, the analysis refers to further (local) papers. 83. This quotation is taken from LP (29/4/04). 84. This is a journalist’s summary of the think tank’s findings (see LP 2/3/04). 85. Concerning this issue, see CP (8/2/04 and 8/11/02). 86. See TS (24/5/03). 87. This comment of a unionized retiree on the crisis of his company scheme is taken from CP (26/11/03). The previous quotation stems from TS (19/8/04). 88. On such conflicts, see TS (29/9/05 and 8/4/05). 89. This is taken from an article on a company affected by insolvency (LP 30/4/03). 90. As regards statements from the managers of the (public) Canadian Pension Plan, see TS (7/8/04 and 16/5/03). 91. See TS (6/9/04). Concerning the campaigner network in Ontario, see TS (25/4/04). 92. See CP (21/10/04). 93. This is a headline of an article concerned with the financial agents’ marketing efforts over the last weeks of the fiscal year (see TS 18/1/04).

220

Notes

94. This quotation is taken from LD (25/8/03). The aforementioned critical remarks appear in LP (29/3/03). Their background is that low-income earners do not benefit from tax-advantaged saving products and risk losing their entitlements to minimum pensions when purchasing private plans. 95. See CP (30/4/03). The viewpoint of the official is presented by TS (11/5/05). 96. TS (2/5/03). In a similar vein, a colleague of his maintains that ‘some people need more than comes in from the Canada Pension Plan or employer pensions, if they are fortunate enough to have one’ (TS 21/8/04). Interestingly, the liberal line of the argument alludes to the citizen’s responsibility to participate in charitable action in favour of those who are left off the (pension) road, as is exemplified by a journalist’s comment on a charity supporting pensioners in keeping their home intact: ‘Some believe we don’t owe these people a living. It was their responsibility to prepare themselves financially. But does that mean that we overlook them—forget that they exist?’ (CP 15/4/04). 97. See TS (30/1/03). 98. This is the headline of an article providing a pension adviser’s comment on an investment strategy presented in a reader’s letter (LP 23/1/03). 99. See LD (26/7/04). The previous quotations are taken from Journal de Montréal (21/8/04) and TS (17/6/04). 100. See LD (25/8/03). The previous comment stems from LD (30/1/04). 101. This is a journalist’s comment in TS (11/3/03). 102. This is the headline of an editorial featured in TS (17/1/03). 103. See CP (11/2/04). On the minister’s lapse, see CP (29/1/04) and 26/7/03). 104. This is a journalist’s comment for TS (20/8/04). 105. This is a statement stemming from the investment board’s president talking in one of the public audits the CPP organizes to have its strategies discussed by the public (quoted in LP 14/10/04). In another meeting, he asserts: ‘Defined benefit pension plans, like the CPP, have a single purpose: . . . Their raison d’être is to pay the pensions promised to their retirees. Pension funds are not vehicles for advocacy groups advancing their particular objectives, however worthy they may be’ (TS 19/9/04). 106. The regulator’s statement is presented by CP (21/5/03). The respective regulations include the supervision of underfunded corporate pension plans, the compilation of voluntary standards to be employed for group (defined contribution) saving plans (in order to prevent lawsuits and grievances), and, finally, the rules concerning the calculation of cash settlements for those who leave a corporate pension plan. 107. See CP (29/8/04), which presents a survey published by the Canadian Labour Congress. The aforementioned viewpoint is expressed in a speech of a former minister at the university of Montréal (see LP 7/4/04). 108. The Régie des rentes de Québec is reported to have operated misdirected investments, with huge losses in asset value as a consequence. 109. See CP (8/9/03). The aforementioned article appears in TS (13/1/04). 110. See TS (3/4/04). The previous quotation is taken from LD (28/6/04). 111. See CP (9/6/04). The sceptical point of view, quoted previously, appears in CP (29/1/04). The concern over surplus ownership relates to conflicts around the right of plan holders to participate in profits accrued by pension funds in the past. 112. These are statements of financial advisers quoted in CP (22/7/03 and 3/8/04). 113. See CP (24/11/02 and 23/2/04). 114. This is a journalist’s comment on new guidelines for cash settlements when plan members leave their corporate pension scheme (quoted in TS 13/5/04). The aforementioned statement is taken from TS (6/2/03).

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115. This is a statement of a care worker complaining about bad quality standards in residential care (quoted in TS 9/12/03). 116. This is the headline of an article reporting on debates around the quality of care in Ontario (TS 9/12/03). 117. See an article published by TS (26/9/03) which explores the issue of rationing health and elderly care services. 118. See TS (14/12/03). Trade unions are also calling for an ‘effective “whistleblower” protection’ that enables workers in the sector to inform inspection authorities about bad practices. 119. The statements of the politician, a health minister at that time, are taken from TS (8/12/03 and 27/4/04). The critiques of the nonprofit provider network are presented by TS (14/12/03). 120. See LP (1/6/04 and 10/6/04). 121. See TS (17/4/04). The previous quotation stems from LD (27/10/04). 122. See Journal de Montréal (10/8/04). 123. The three latter quotations are taken from LD (26/9/03, 28/10/02, and 2/10/04). 124. See TS (12/5/04). This comment refers to reforms introducing annual inspection reports, a family council in all nursing homes, and an ombudsman as a contact point for those complaining about poor quality. The comment from the Ontarian official is presented in the same article. 125. This is the demand claim made by a group of users (and their relatives); see TS (13/12/03). 126. Concerning this critique from the political opposition at the time, see CP (2/9/04). The preceding comment of the nonprofit provider network is taken from TS (5/8/04). 127. See TS (3/9/04). 128. See TS (16/3/05). For a similar voice from Québec, see LD (27/7/04). As for the comment on the overall insufficient input of public money, see TS (23/1/04). 129. See TS (8/5/03). 130. See LP (29/2/04). The author works for a right-wing liberal think tank. The preceding statement of the insurance industry is taken from LD (1/11/02). 131. The article states that ‘volunteers are . . . essential’ to the everyday work of the centre (see TS 2/1/04). 132. See TS (13/12/03). Concerning the role of the ‘social economy’ in Québec, see LD (21/12/02). The article refers to a conference in France but mentions participants from the province. 133. See TS (23/8/04). The opinion of the employee is presented by TS (13/12/03). 134. See TS (20/10/02). The critique of competitive bidding appears in TS (9/9/04). Concerning the comment of the nonprofit provider network (referring to a study conducted on its behalf), see TS (3/9/03). 135. The expert, who was the president of an important reform commission in 2000, suggests ‘public-private partnerships’ in which the public sector contracts private services on the basis of competitive bidding (see LP 9/1/03). 136. See TS (7/12/03). The previous quotation is taken from TS (24/9/04). 137. See TS (24/1/04). On the ‘performance first’ agenda, see LD (22/3/03). 138. See TS (22/10/04) and TS (5/10/04). 139. See TS (12/4/04). The author comments on frail people insisting on treatments in hospitals instead of being moved to nursing homes. 140. The minister is referring to the aforementioned reports about bad quality in nursing homes (see TS 8/12/03. One year later, a new minister appears, holding a slightly different discourse (see TS 5/10/04).

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Notes

141. This review concentrates on a weekly journal (Die Zeit), a range of nationwide newspapers (Süddeutsche Zeitung [SZ], Frankfurter Rundschau [FR], Die Tagesszeitung [TAZ]), and some influential regional dailies (Stuttgarter Zeitung [StuttgZ], Stuttgarter Nachrichten [SN], Tagesspiegel [TSP], or the Berliner Zeitung [BZ]). For particular issues, the analysis refers to further sources. 142. This is a statement of the president of a public pension fund, in an interview for SN (29/4/05). Similar points of view are expressed elsewhere (SN 18/11/02, SZ 10/12/03, and FR 3/2/04). 143. This is how an expert of the public sector trade union argues in Die Welt (11/3/04). 144. See, e.g., SZ (30/3/04), for an article about a demonstration of a pensioner group using this slogan. 145. The viewpoint of the politician is reported by (1/4/04); for the latter quotation see FR (25/8/03). 146. Major contributions come from a pension institute sponsored by a banking company and enjoying remarkable media coverage as well as from an influential Third Way-think tank founded by a powerful media company. The aforementioned statement of the professor appears in SN (18/6/04). 147. The quotation stems from FR (12/3/04). 148. See SZ (12/6/04) or Die Zeit (1/7/04). 149. This is the title of a report published by Die Zeit (11/11/04). The press also reports on the crisis of old corporate pension plans (based on defined benefits); see, e.g., SZ (24/6/03). 150. This was a statement of a former minister of social affairs (see Rheinischer Merkur 21/4/05). As to the statement of the aforementioned supplier network, see StuttgZ (5/5/04). 151. Such concerns are raised in SN (7/4/05) and BZ (26/1/05). For the journalist’s comment, see BZ (10/2/04). 152. This is a statement from the president of the biggest pensioner association, in an interview for StuttgZ (7/9/05). Concerning the trade unions’ fears, see SZ (23/4/05). 153. See StuttgZ (8/8/03). FR and TSP (6/8/03) elaborate more broadly on the underlying controversy. 154. This especially applies to their investment in the stock market bubble (Die Zeit 23/10/03). The previous quotations are taken from Die Zeit (6/11/03 and 25/11/04; see also Die Zeit 26/2/04 and 17/6/04) or SZ (17/6/04 and 24/3/05). 155. This is the expression used by one of their representatives in the Frankfurter Allgemeine Zeitung (28/10/04). A similar judgement of this association was noted by SZ (19/4/04). 156. This statement is taken from SZ (10/8/02). The short quotation stems from SZ (19/11/02). 157. The notion ‘mature citizen’ appears in SZ (10/9/02); the longer quotation is taken from SZ (29/1/05). 158. The quotation is taken from StuttgZ (23/7/05). A similar statement appears in SZ (10/1/05) in an interview with a spokesperson of a think tank sponsored by the banking sector. Concerning the moral obligation (allegedly) incumbent on the childless, see SZ (23/5/05). 159. See FR (5/6/03 or 20/8/03). 160. This is the title of an essay published by Die Zeit (31/10/02). 161. See, for example, FR (28/1/04). 162. This point is made in a journalist’s comment featured in SZ (10/1/05). A chief consultant of the government in office until 2005 is quoted with a similar assessment by SZ (30/12/04). 163. See SZ (29/1/05).

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164. The quotation is taken from Rheinischer Merkur (21/4/05). Concerning the statements of the federal pension fund, see TSP (12/2/05; this is where the quotation is taken from), SZ (22/12/04), Die Zeit (28/4/04), or FR (18/11/02). 165. These are titles of features published by Die Zeit (28/10/04 and 11/8/05). 166. See SN (8/6/04). The two previous quotations are taken from SZ (31/7/02 and 19/6/04). 167. This is a quotation taken from an interview with a German representative of the International Monetary Fund (Die Zeit 21/4/05). The former quotation stems from FR (30/3/05) which presents a study of Deutsche Bank. The suggestion to reduce social insurance (further) is brought in by a (former) shadow minister and expert on law (see his interview for SZ (31/8/05). 168. The advantage of mixed-asset-investment is praised in Die Zeit (28/10/04). 169. As to the effectiveness of corporate pension plans, see SZ (12/2/05). The question of consumer protection is raised in many of the aforementioned comments addressing the violation of consumer rights by the pension industry. The viewpoint of trade unions and employer associations is reported by SZ (13/1/05), for instance. 170. This, for instance, is the case with the major architect of long-term care insurance, a former minister of social affairs (see SZ 4/4/03). 171. See SZ (8/8/03). The aforementioned statement appears in FR (30/4/01). 172. See StuttgZ (27/6/02 and 15/7/02), where regional units of faith-based welfare associations present their point of view (on the occasion of a demonstration of care workers). 173. See BZ (29/4/05). 174. The quotation stems from the vice-president of the German Trade Union Confederation (see TSP 1/3/03). See also TSP (7/5/05), where she claims more public funding for elderly care. 175. The quotations are taken from FR (28/7/02) and TAZ (7/5/04). As for private purchasing, see StuttgZ (7/8/03). 176. See FR (18/4/02) 177. The latter two quotations are taken from Die Welt (12/9/04) and TSP (4/3/05). 178. See FR (1/12/04). 179. See Die Welt (30/4/01) and BZ (2/11/00). 180. See TSP (20/2/01) or SZ (8/7/05). 181. See TSP (7/5/05) or a previous statement by the trade union federation published in TSP (1/3/03). 182. The first opinion is presented by FR (10/12/03); the second quotation is taken from the Westdeutsche Allgemeine Zeitung (31/7/02). 183. See FR (23/2/05). 184. As regards comments from think tanks and experts on these points, see FR (28/6/03, 14/4/04, or 23/9/04), SZ (4/3/05), or TSP (7/7/04). Statements from journalists figure in TAZ (6/7/04) or BZ (2/3/05). 185. Regarding this debate, see StuttgZ (6/2/04) or SZ (6/7/04). The mechanism has nevertheless been enacted by the government. 186. The quotation is taken from the Handelsblatt (15/2/04). As to warnings against unfortunate consumer choice, see SZ (11/1/05). 187. The quotation on private responsibility is taken from Rheinischer Merkur (5/2/04); statements of the professor on behalf of the (neoliberal) think tank figure in StuttgZ (1/3/03 and 6/2/04). 188. The quotation is taken from SZ (4/8/04). Concerning the call for private insurance, see, for example, TSP (1/3/03). Similar comments figure in Die Welt

224

189. 190. 191. 192. 193. 194. 195.

196. 197. 198. 199. 200.

201. 202. 203.

204. 205. 206.

Notes (5/2/04), BZ (3/5/05), TAZ (2/6/04); the standpoint of the insurance industry is mentioned in SZ (12/11/03) and FR (29/7/04). The two quotations stem from SZ (11/2/03) and Die Zeit (6/4/05). The comment on volunteering refers to a court’s ruling setting limits on the charges individuals have to bear for the care of their relatives (SZ 8/6/05). A critical view is presented in TAZ (6/4/05). The latter claim is presented in BZ (15/6/04). The role of volunteers is addressed in comments appearing in FR (5/2/00) or in SN (27/1/05). See SZ (30/1/04), FR (30/3/04), and StuttgZ (8/7/05). This is a statement of a representative of a nonprofit provider network, featured in Die Welt (22/9/04). The quotation is taken from Rheinische Post (29/7/02). For the trade unionist’s statement, see TSP (1/3/03). The first comment is taken from TAZ (1/4/05, see also SZ 30/4/01); the second appears in FR (13/2/04). The third opinion figures in SZ (19/6/02). For similar statements from journalists, see, e.g., StuttgZ (2/11/00) or SZ (2/4/05). Concerning the reservation referring to bureaucratic burden, see TAZ (3/6/04) or SZ (13/2/04). Positive comments on the existing scheme figure in an account of provider associations presented to StuttgZ (27/1/05). The quotation is taken from a national board of experts in health care; see SZ (30/5/05). The example of the innovative market player is given by TAZ (5/4/05). The former quotation is taken from the Westdeutsche Zeitung (21/7/04). The point of view of the think tank (which is a liberal network attached to the social democrats) appears in Die Welt (26/1/05). This, for example, was a proposition of a health care specialist who later became a deputy of the social democrats (see SZ 4/3/05 and FR 12/4/05). Regarding the journalists’ points of view, see, e.g., StuttgZ (27/5/04 and 6/7/04). The two preceding quotations stem from an academic expert (TSP 16/11/05 and StuttgZ 6/2/04). The statement of the Catholic welfare association is provided by TSP (4/1/05). The following is based on articles published by two national newspapers (Le Monde [LM] and Libération [LI]) and a widely read Parisian daily (Le Parisien [PA]). In some cases, the analysis refers to further sources. This statement is taken from LI (16/4/04). The employer association, representing self-employed craftsmen, was quoted by LM (11/9/03). Concerning the previous quotation, see LM (10/5/04). One should note that the French labour movement embraces several currents that, at times, pursue different strategies. Whereas two of the so-called representative national confederations usually take a more radical stance in the political sphere and in collective bargaining, three others defend a strategy of institutionalized compromise in their relations with employers and governments. Although these differences sometimes have considerable political implications, they will (have to) be sidestepped in this section. These comments are taken from PA (5/11/03). They refer to a controversy about the terms under which public sector employees are entitled to retire (a debate held after the 2003 reform introducing new rules on this point). See LM (5/2/03). For the statement of the ambulance worker, see PA (20/5/05). The unionist’s statement on ‘acquired rights’—a French notion with high symbolic significance—is taken from LM (9/5/03). This critique is articulated in LM (17/6/03). Concerning the journalist’s concerns, see Les Échos (28/10/03). The statement of the liberal politician appears in LM (4/8/03).

Notes

225

207. This alludes to the existence of supplementary funded schemes for public sector workers. His comment is taken from PA (4/4/02); see LI (16/4/03) for the statement of the inspection body (Cour des comptes). The article of the journalist pleading for a differentiated analysis appeared in LM (12/3/03). 208. The argument on pensions as ‘deferred wages’ appears in LI (12/6/03). 209. See LI (26/5/03). 210. These comments are taken from LI (27/3/03), PA (12/5/03), and LM (28/3/03). 211. This is presented as a personal story in PA (26/11/02). 212. See LI (27/4/04); the statement of the employer association is taken from LM (24/4/04). 213. A declaration of the Episcopal council features in Les Échos (27/2/02). The unionist’s interest in ‘true choice’ is given expression in LM (4/4/03). The issue of flexible retirement and longer work for those with low pensions is raised in LM (11/6/03) and LI (5/6/03). 214. See LM (1/3/05 and 14/4/05). 215. For this charge against the financial services industry, see LM (8/4/04). The warnings quoted before feature in LM (24/2/04, 9/2/04, and 19/1/04). 216. Concerning the associations’ statements, see LM (11/10/04). 217. On the claim of the victims group, see LM (2/3/05). The journalists’ comment is taken from LM (1/12/03 and 13/10/03). 218. See LM (26/4/04). The comment of the think tank is taken from LM (14/3/05). 219. See LM (14/3/05) and PA (22/4/04). The recommendation to proceed to scrupulous individual analysis appears in LM (8/5/04). 220. This quotation stems from LM (1/12/03). The preceding ones are taken from LM (7/6/04, 5/6/04, and 19/1/04). 221. The two latter quotations are taken from LM (9/5/03). Concerning the viewpoint of the historian, see LM (20/5/03). 222. See LI (6/6/03). On the other hand, centre-right politicians espouse instead the principle of ‘equal pensions for equal contributions’ (LM 12/6/03). Concerning the comments of trade unionists, see LM (17/1/03 and 4/4/03) and LI (16/5/03). 223. On the latter argument, see LM (11/6/03). These two preceding quotations are taken from PA (12/5/03) and LM (11/1/03). 224. Concerning these two criticisms, see LM (24/2/04 and 9/7/03). 225. See LM (4/10/04). Concerning the claims of the financial services industry, see LM (8/5/04 and 21/3/03). 226. On the latter point, see PA (3/9/02) and LI (27/3/03). As for the (assumed) consensus over extending contribution years, see LM (13/5/03). 227. See LM (4/4/03) and PA (30/11/02). 228. The quotation is taken from LM (20/6/03). Concerning the suggestion on employers’ responsibility, see LM (17/6/03). 229. See LM (11/5/04, 5/6/03 and 18/6/03). 230. See LM (24/5/04 and 11/6/03). A similar comment is made by a banker in PA (22/4/04). 231. On the latter point, see PA (5/10/03). Concerning the statements and the evidence from the financial services industry, see LI (24/5/05), PA (2/8/03 and 2/2/05), and LM (21/4/03). 232. On such estimates, see LM (4/1/05 and 4/10/04); the preceding quotation is taken from PA (25/11/04). 233. See LM (25/10/04 and 24/4/04). The (alleged) capacity of fund managers is addressed in LM (17/6/03), and the cleverness of financial market consumers is at issue in LM (1/12/03).

226

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234. See LM (29/12/03). The preceding quotation is taken from LM (21/4/03). 235. This quotation is taken from Les Échos (7/8/03). The sceptical view on the performance of private pension plans is presented in LM (21/4/03). 236. These statements stem from LM (11/1/03 and 11/6/03). The alimentation of funded schemes, so the argument went, presupposed declining salaries, which in turn impoverished the income basis of social security regimes. Concerning the assertion on demography, see LI (11/2/02 and 26/5/03). 237. See LM (8/7/03). This viewpoint was defended by an official advice committee comprising representatives of trade unions, employer organizations, members of parliament, the insurance industry, and the federation of individual shareholders. 238. See La Croix (27/2/02). 239. These comments are taken from LM (25/10/02) and LI (1/7/03). 240. This hope is expressed in LM (24/2/04). The preceding quotation is taken from LM (8/5/04). See LI (27/4/04) for the bank’s announcement on marketing secure products only. 241. The quotations are taken from PA (5/10/03) and LM (24/4/04). See also LM (11/10/04) and PA (2/8/03). 242. This opinion was expressed in LM (4/10/04). As was noted earlier, ‘choosing the right provider and the right product with certainty’ appears to many observers as ‘a mission impossible’ (LI 27/4/04). Concerning the two preceding comments, see LM (6/12/04 and 17/1/05). 243. This quotation is taken from LM (8/4/04). See also PA (26/9/03). 244. On their standpoint, see LM (5/2/03 and 26/5/03). 245. This observation was made in a business daily (Tribune de l’Expansion, 28/10/03). 246. See LM (31/1/04). 247. See LI (8/2/03). The journalist’s comments referred to before are presented by LM (5/10/02 and 10/9/02). 248. See LM (16/9/03). 249. The latter quotation is taken from LM (6/2/03), as is the previous one. 250. See LM (6/9/03). The journalist’s comment is taken from LM (31/1/04); the expert is quoted by LM (16/9/03). 251. See PA (20/3/03). Concerning the aforementioned aspects, see LI (21/9/04 and 19/2/04). 252. See LM (29/8/03, quotation) and PA (23/10/04). On the position of the care industry, see LM (21/9/04) and, for the position of care home associations, see LM (22/9/03). 253. The two latter quotations are taken from LI (19/2/03) and LM (22/9/03). Regarding the previous comments, see LM (15/9/03) and LI (20/9/04). The report on the charity against maltreatment appears in LI (25/3/04). 254. See PA (19/5/05). The aforementioned viewpoint of the academic is presented by LM (28/4/05). 255. See LI (11/2/02). The previous quotation is taken from LM (19/10/04). 256. See LI (14/3/05). The aforementioned comment of the expert is taken from LM (31/1/04). 257. See PA (19/12/02). He does not exclude, however, the establishment in the longer term of a scheme based on payroll contributions. The previous quotation is taken from LM (14/2/05) while the observation of the inspection agency is presented by LM (31/1/04). 258. See LM (28/4/05). The comment evoking the context of purchasing decisions appears in LI (14/3/05). 259. See PA (10/12/03). The article on volunteering appears in PA (5/3/05); the recommendation of the charity is presented by LI (22/8/03).

Notes

227

260. See LM (14/9/03). The expert’s opinion is presented by LM (15/9/03). 261. See LM (21/8/03) and LI (26/8/03). This is endorsed by the association of private care homes (LI 22/8/03). 262. See PA (6/11/03). Similar comments from the many experts interviewed by the press following the ‘heat wave crisis’ appear in LM (9/9/03 and 16/9/03). 263. See LM (28/8/03). The comment stating a ‘collective denial’, which is an assertion referring to senior citizens suffering from Alzheimer’s disease, stems from LM (22/9/03). 264. See LM (20/11/03). LM (16/5/05) reports on the intentions of the trade union. 265. For these two comments, see LM (4/11/03 and 14/11/02). 266. See LI (29/10/03 and 7/11/03). 267. See LI (2/9/03) and La Croix (11/12/03) for these quotations. Similar statements appear in PA (18, 21, and 22/4/05). 268. This action group is taking centre stage in numerous articles published on this issue (see, e.g., LM 14/4/05). Concerning the suggestion of an increased inheritance tax, see LM (16/9/03). 269. See LM (6/9/03). The comment from the regional representative is taken from LM (13/5/05). 270. See LM (29/8/03). The comment from the pensioner group is presented by LI (8/2/03). 271. See LI (3/11/03), LM (3/9/03), LI (8/9/03), and PA (16/5/05). 272. See LM (2/10/01). 273. These quotations are taken from LM (13/9/03) and LI (8/9/03). 274. These statements appear in LM (28/4/05 and 16/9/03). 275. See LI (25/5/05) and LM (5/11/02). The two aforementioned comments are taken from LM (28/8/03) and LI (22/8/03). 276. See LM (19/10/04). 277. See PA (25/11/03), referring to the situation in a particular département. With regard to problems in the benefit system, see PA (20/12/02) and LI (9/1/03). 278. For the comment of a pensioner group, see LI (8/2/03). 279. Concerning the journalists’ comments, see LM (17/04/02 and 14/2/05). The appraisal of the ‘French model’ appears in LM (14/2/05). 280. See LM (19/10/04). The suggestion of the network agent is presented by PA (28/7/04). 281. See LI (11/2/02). Concerning the aforementioned report on ‘good practice,’ see PA (19/5/05). 282. See LM (25/10/04). The previous comment is taken from LM (31/1/04). 283. See LM (14/3/05). 284. This also holds for countries with a long-standing tradition of nonstatutory retirement provision where major stakeholders now openly defend the transition from defined benefit corporate provision to defined contribution (personal) schemes. 285. In economics, there are various normative concepts around this understanding of efficiency. The most prominent of these is Pareto-efficiency. This concept says that, given a set of alternative allocations and a set of individuals, a move from one allocation to another is efficient unless there is an alternative that leaves at least one individual better off without reducing the advantages of any other individual. However, the interpretation of effectiveness underlying the notion of ‘general output for money’ is predicated on what can be measured and predicted—hence, collateral damage emanating from long-term or incalculable effects is accepted. 286. During the period of investigation, stock markets collapsed and recovered only slowly. The expectations of the profitability realized by funded pension

228

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plans (especially those based on private equity) therefore rely on extrapolations of past results into the future. 287. This notion draws on Pierson (2001, 414), who has seen entire welfare systems affected by what he named ‘institutional stickiness.’ 288. The difficulty resides in means-testing eating up modest personal savings whereas nonmeans-tested pensions may go far beyond the basic needs of a retired person.

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Index

A Abelson, J. 65 Abolafia, M.Y. 97, 98 academic experts elderly care 139, 142–3, 149–50, 150–1, 158, 169, 170, 171 pension systems 7, 129, 133, 134, 154, 155, 156, 162, 164, 165, 166 advocacy groups 137 ageism 104, 148–9 Alexander, J. 6 Almond, G.A. 96 Anderson, B. 8, 83 Anttonen, A. 4, 102, 103, 109, 186 Archer, M.S. 83, 87, 91 Aronson, J. 4 Arts, W.A. 92, 96, 116, 184 Ascoli, U. 4, 13, 105, 106, 119 Axtmann, R. 97

B baby boomers 105, 122 Bache, I. 19 Baldock, J. 1, 8, 19, 59, 85, 91, 92, 93, 117 Bang, H.P. 87 Barbier, J.-C. 93, 186 Barry, A. 90 Bartlett, W. 3, 16 Bauman, Z. 88, 90, 98, 100 Beck, U. 86, 89, 94 Beck-Gernsheim, E. 94 Béland, D. 21, 107, 108 Benson, R. 126 Beresford, P. 14 Biggs, S. 105, 106 Blackburn, R. 27 Blekesaune, M. 92, 95 Blomqvist, P. 5, 122 Bode, I. 16, 97, 197

Boggs, C. 126 Bönker, F. 13 Borre, O. 92 Bowpitt, G. 116 Brandsen, T. 3, 12, 14, 16, 17 Brandt, A. 116 Bridgen, P. 119 Britain comparisons 77–82, 196 elderly care in 27–30, 59–61, 138–43, 181, 182, 183 liberal regime 2, 9 media communication in 133–43 moral issues 178, 179, 180, 181, 182, 183 pension system in 23–7, 54, 56–9, 106, 118–19, 133–8, 178, 179, 180 transnational assessment 51–4, 55 Bromley, D.W. 88 Burrows, R. 94

C Canada comparisons 77–82, 196 elderly care in 33–7, 64–6, 148–52, 182, 183, 184 liberal regime 2, 9 media communication in 143–52 moral issues 177, 178, 179, 180, 182, 183, 184 pension system in 30–3, 61–4, 106, 118– 19, 143–8, 177, 178, 179, 180 transnational assessment 51–4, 55 Canadian Pension Plan (CPP) 31, 63, 147 Cannan, C. 95 Care Trusts (UK) 28, 60 Cerny, P.G. 11 Chamberlayne, P.R. 92 Chan, C.K. 116

246

Index

Chappell, R. 12 charities elderly care 138–9, 140, 142, 150, 151, 169, 170 pension systems 134, 138 Christensen, T. 13 Clark, D. 3, 196 Clark, G.L. 2, 4, 38, 43, 44 Clarke, J. 6, 13, 17, 20, 95, 105, 118, 122 Clasen, J. 37, 114 Coates, D. 11 Cole, T. 107 collectivism 110 age of 101–9, 173 care provision 103 culture of markets 105–7 effect on market capitalism 103 elderly care 102–3 gender gap 103–4 governance 34, 38 income support/social care difference 102, 102–3 inequalities 103 moral economy approach 107–9 multiple changes in provision 104–5 new cognitive framework 174–6 old age as social phenomenon 101 paternalist 101–3 pension systems 102 ramifications of 103 social status 103 welfarization of old age 101 Commission for Social Care Inspection (UK) 60 communication see mass media Community Care Access Centres (CCAC) (Canada) 35, 65 consumer associations elderly care 139, 140 pension systems 135, 138, 139–40, 155, 163 Cook, T.E. 127 Cooke, M. 31, 63 Corbett, T. 93 corporate business representatives 134, 147, 154, 155, 166 corporatist welfare 20 Coughlin, R.M. 96 Cox, J. 102, 105 Craig, G. 117 Crouch, C. 20 culture 190 analysis of 125–6 assessment of facts 8

catch-all explanation 83 collective representation 84–5 comparisons 193–8 concept 90–1 critical role 5–6 cultural turn 6 decision-making 87 development of 85–6 dialogue model 86–7 extrinsic change 90 flexibility of 91 functionalist turn 85 global comparisons 8–9 human agency 86, 88 individualism 89–90 institutions 85, 88, 90 Marxian view 84 modernization theory 89 neglect of 83 nondeterministic approach 85, 86 norms 91 poststructuralist view 87 Protestantism 85 role of 84 sense-making 7–9 sensitivity to change 88–93 social sciences interest in 84–101 subsystems 85–6 values 85, 86, 87 see also market culture; national cultures; welfare culture

D Damone, H.W. Jr 15 Dart, R. 17 Daykin, C. 24, 54 Denton, M. 123 deservedness/duly earned entitlements 111, 111–12, 113–15 elderly care 138–9, 148, 157, 167–8, 183–4 model 113–15 pension systems 133–4, 143–4, 153–4, 161–2, 177–8 dignity/need-based (basic) support 111, 111–12, 115–17, 186 elderly care 139–40, 148–9, 157–8, 168–9, 183 emphasis on 197 model 115–17 pension systems 134–5, 144–5, 154–5, 162–3, 178–9 DiMaggio, P.J. 99, 128 Dixon, J. 13

Index Dobbin, F. 97, 115 Donahue, J.D. 12, 89 Durkheim, E. 84, 99 elderly care additional services 35, 70 agency competition 107 assessment system 28, 29, 41, 60 British 27–30, 59–61, 138–43 Canadian 33–7, 64–6, 148–52 Charity-based 116 collectivist view 102–3, 104 criticisms/debates 61, 71, 76 cultural aspects 6 dispersed nature of 27, 49–50 domiciliary services 35, 42, 48, 49, 59, 60, 61, 69, 71, 75, 77, 141 French 48–50, 75–7, 167–73 funding systems 28–9, 30, 34, 35, 40–1, 48–9, 50, 59–60, 65, 66, 71–2, 107 German 40–3, 69–72, 157–61 inspection/regulation of 4, 20–1, 33–4, 35–6, 43, 49, 53, 59, 60, 76, 107, 141 interagency rivalry 50, 75–6 local authority management 28 long-term care insurance 18, 40–1, 42, 51, 69, 71–2 market system 2, 4, 28–30, 35, 36–7, 42–3, 49, 50, 59, 61, 64–5, 69, 75, 77 means-tested assistance 41–2 media communication on 138–43, 148– 52, 157–61, 167–73 moral issues 112–13, 115, 116, 118–19, 120–1, 138–43, 148–52, 157– 61, 167–73, 174, 181–3 multi-service centres 41 nursing provision 48, 76 pay-as-you-go system 160 personal allowance scheme 18, 48, 49– 50, 75, 167, 168, 170, 172 personal/nursing distinction 28 private sector 29, 35–6, 49, 65–6, 70, 75, 107 public entitlements 28–9 purchaser-provider split 107 quality of service 71, 76 rationing of services 59 relatives’ assistance 29, 34, 50, 69 residential facilities 28, 29, 34, 41, 42, 43, 48, 50, 60, 64–5, 70, 76 self-realization dimension 117 social citizenship link 115, 117

247

state involvement 33–4, 48–9 transnational comparisons 53–4, 55, 79–80, 82, 197 voluntary sector 29, 49

E Elster, J. 115 employer associations elderly care 171 pension systems 135, 136, 163, 164, 165 Entwistle, T. 188 Eriksson, B. 117 Ersson, S. 6, 97, 110 Esping-Andersen, G. 1, 8, 96 Estes, C. 4, 102, 104, 105, 107, 109 European Union (EU) 13 Evers, A. 40, 105, 119 Exworthy, M. 17

F Faith-based providers 159 family associations 150 Featherstone, M. 104 financial advisors elderly care 141, 159, 172 pensions 135, 137, 144, 145–6, 147–8, 154–5, 163, 164, 165 Financial Services Authority (FSA) (Britain) 26, 58, 59 Fligstein, N. 7, 98 Flinders, M. 19 Flood, C. 16 Foster, L. 112 France comparative synopsis 77–82 comparisons 196 corporatist tradition 2, 9, 20 direct payments system 18 elderly care in 48–50, 75–7, 167–73, 181–3 media communication in 161–73 moral issues 180, 181–3 pension system in 43–7, 72–5, 106, 161–7, 180 transnational assessment 50–4, 55 Furedi, F. 121

G Galbraith, J.K. 94, 122 Geertz, C. 90, 91 Gelissen, J. 96, 184 Gen, E.N. 2 Germany

248

Index

comparisons 77–82, 196 corporatist tradition 2, 9, 20 direct payments system 18 elderly care in 40–3, 69–72, 157–61, 182, 183, 184 media communication in 153–61 moral issues 178–81, 182, 183, 184 pension system in 37–40, 66–9, 106, 153–7, 178–81 transnational assessment 51–4, 55 Gibelmann, M.D. 15 Giddens, A. 3 Gilbert, 1, 12, 13, 17, 95, 105, 118 Ginn, J. 104 Glasby, J. 18 Glatzer, M. 8 Glendinning, C. 18 Goodin, R.E. 96, 118 Gordon, C.C. 108, 109 governance best value arrangements 187 Canadian 147, 150, 191 care systems 20–1, 64, 160, 173, 182 collectivist mode 34, 38 competitive 54, 95 corporate pensions 63 culture governance 87, 88 institutional 12–13, 14 intermediate 157 interpretations of rationality 120 market-based 51, 69, 82, 89, 174, 176, 177, 181, 187 mixed modes 3, 15 more advocated 1 multilevel 19–20 organizational framework 73 PERP model 47 quasi–market 76, 78, 181, 183, 192 shared 187 side-effects 120 social partner pensions 52 social welfare provision 20 social/institutional phenomena 15 societal integration 126 sound management 142, 151 trade union participation in 32 government consultants 133, 136, 138 Graefe, P. 119 Granovetter, M. 100

H Habermas, J. 86, 126 Hardy, B. 28 Harris, J. 93, 95

Health and Social Services Centres (CSSS) (Canada) 35, 36, 65 Hepworth, M. 104 Hertzler, J. 88, 91, 127 Hewitt, M. 12, 93 Hinterlong, J. 104 Hirdes, J.P. 34 Hochschild, A.R. 104 Hofstede, G. 96 Holzmann, R. 13 Hood, C. 14 Hugman, R. 1 hybrid cultures best value arrangements 187–8 collective deservedness 185 concept 184 context steering 186–7 flexible entitlements 185 need-oriented activation 186 procedural norms 186–8 substantial norms 185–6 Hyde, A. 13 Hyde, M. 4, 18, 119, 123, 186

I Inglehart, R. 89 institutions 9–10 comprehensive implementation machineries 12 control of risk 12 deliberate control of 14 governance of 12–13, 14 infrastructure 11–13 input-based partnerships 16–17 islands of marketization respite 13–14 legal apparatus 12 liberalization of 12 market agenda 11–15 meeting basic needs 12 and New Public Management 13 performance standards 17 privatization 15 public bodies/quangos 16 quasi-market regime 14, 16–17 regulation 15–16, 18 social policies 12 social redistribution 12 sociology of 9 subsidized markets 17–19 varieties 15–19 welfare consensus 12 insurance experts elderly care 151 pension systems 136, 164

Index International Monetary Fund (IMF) 13

J James, O. 21 Jordan, B. 1, 94, 95, 117 Joseph, S. 83, 87, 93, 94 journalists elderly care 139, 140, 141–2, 142, 148, 150, 151–2, 158, 159, 160, 167, 168–70, 172, 173 pension systems 134–5, 136, 137–8, 144, 145, 146, 147, 154–5, 156, 162, 163, 164–7

K Kahl, S. 92 Katz, M.B. 16 Keat, R. 100 Kemp, C.L. 123 Kemshall, H. 19, 89, 93, 95, 105, 114, 122, 123 Kendall, J. 3 Kersbergen, K.V. 96 Knapp, M. 59 Knights, D. 93 Kohli, M. 107, 114 Kuttner, R. 12, 13, 99

L Laegreid, P. 13 Laing, W. 59 Lamping, W. and Rüb, F.W. 39 Lane, J.-E. 6, 13, 97, 110 Langan, M. 95 Langley, P. 4, 106, 109 Le Bihan, B. 4 Le Grand, J. 3, 14, 16, 122 Leibfried, 92 Leichsenring, K. 106 Leitner, S. 109 Leonard, P. 3, 94 Lessenich, S. 109 Levine, D. 97 Levy, J.D. 93 Lewis, J. 17, 94, 196 Li, J. 32 Lightman, E.S. 30 Lind, J. 8 Littlechild, R. 18 Longino, C.F. 108, 109 Lowe, R. 119 Ludwig-Mayerhofer, W. 93, 186 Lyon, A. 19 Lyotard, J.-F. 87

249

M McClelland, D.C. 89 McDonald, P.L. 30 McGann, J.G. 129 Mandin, C. 46 Mann, K. 1, 5, 17, 57, 93, 123 Mantzavinos, C. 99 market culture care systems 106–7 competition 99 concept 97–8 destructive forces 99 domestication of 89 expansionist tendencies 100 freedom of choice 100 implications 107 institutionalization of 99–100 knowledge–creation/knowledge diffusion 98 legal structures 99 market embeddedness 100, 106 Marxist/Weberian theses 100 moral aspects 98–9, 100 in old-age provision 105–7 quasi markets 100 regulation of markets 106, 107 shared expectations 99 social nature 97–101 social support/income provision 106 sources of restraint 99 trustworthiness 98–9 values/customs 98 see also culture; national cultures; welfare culture Marshall, T.H. 89, 93 Martin, 3 Martin, C. 4 Martin, S. 188 Marx Ferree, M. 127 Marx, K. 84 mass media 7–8 analysis of 126 in Britain 133–43 in Canada 143–52 on elderly care 138–43, 148–52, 157–61, 167–73 in France 161–73 in Germany 153–61 moral dimensions 132 new interpretations 177–84 on pension systems 133–8, 143–8, 153– 7, 161–7 reflection of institutional ideology 127 representative of official culture 127

250

Index

research design/methodology 127–32 sense-making 126–7 societal integration 127 Mau, S. 95, 107, 114 Maurice, M. 8 Mayhew, L.H. 126 Means, R. 4, 28, 59, 60 Meyer, J. 97, 120 Meyer, T. 119 Miller, M. 11 Minkler, M. 107 Minns, R. 4, 13 moral economy application 108–9 concept 107–8 dimensions 194 elderly care 112–13, 115, 116, 118–19, 120–1, 138–43, 148–52, 157– 61, 167–73 fuzzy 197 general cognitive frames/particular interpretations of norms 112–13 generational concerns 108 individual freedom 112 individual versus collective 111, 123 institutions 113 mass media communication 132 new elements 174–6 new interpretations 184–8, 194–5 norms of reciprocity 110, 111, 112 optimum outcomes 111 pension systems 112, 113–15, 116–17, 119, 120, 133–8, 143–8, 153– 7, 161–7 quality of welfare states 109 rise of welfare markets 109–10 sense-making 173 socioeconomic factors 108, 109 substantial/procedural issues 111, 112 thought experiment 110–13 towards a new approach 121–3 Münch, R. 85, 126 Myles, J. 4, 31, 63, 102, 107, 108, 114

N Nash, K. 6, 84 national cultures charities versus quangos 97 differing regimes 96 institutions 96–7 political systems 96 risk-management 96–7 sociological view 96–7

see also culture; market culture; welfare culture National Health Service (NHS) (UK) 27, 28, 183–4 National Service Framework for the Care of Older People (UK) 60 Nettleton, S. 94 new managerialism 95 New Public Management 13, 16, 193–4 Newman, J. 19, 94, 95 Newton, K. 126 Neysmith, S.M. 4 nonprofit providers 157, 160, 170, 171, 172 Nye, J.S.J. 89

O Offe, C. 94 Old-age provision age of collectivism 101–9 care of elderly 2, 4, 5 comparisons 55 corporatist tradition 2, 9 culturally embedded 2, 4 culture of 101, 104–7 liberal markets 2, 9 market dynamics 77–82 marketization of 2, 4–5 multifaceted/ambiguous 105 multiple changes in 104–5 organizational roles 20–1 pension systems 2, 4, 5 poverty risk 5 protection/empowerment 5 society-centred 5 toward a new moral economy 121–3 transnational assessment 50–4 values/objectives 5 O’Neill, J. 98, 100 O’Reilly, P. 19 Organization for Economic Cooperation and Development (OECD) 13, 21 organizations international agencies 21 landscape of/major players in 19 lead-agencies/partnerships 20 private companies 21–2 public/user interests 21 regulating agencies 20–2 retirement saving vehicles/elderly care services 20–1 specialized welfare agencies 20 think tanks 21

Index traditional players 19–20 Osberg, L. 64

P Palier, B. 46 Parsons, T. 85–6 Pedersen, A.W. 185 Pension Regulator (Britain) 26 pensioner groups 21, 129 elderly care 157–8, 168, 171, 172 pension systems 133, 134, 138, 144, 153, 154, 166 pensions Beveridgean approach 23, 30 British 23–7, 56–9, 106, 133–8 Canadian 30–3, 61–4, 106, 143–8 Central-state provision 31, 120 collectivist view 102, 103–4 common patterns/differences 78–9, 197 continuity of income approach 30 contracting out 24, 27 corporate sector 25–6, 32–3, 37–8, 43, 51, 52, 57, 64, 69, 115, 119 CPP/RRQ semifunded system 31, 63, 147 crisis in 136 cultural aspects 6 DC/DB schemes 26, 27, 33, 39, 45, 47, 57, 59, 62, 64, 68, 72, 73, 74 debates on 31, 106 federal funds 38–9 female 24, 25, 26, 31, 37, 44, 67, 103– 4, 114, 116 final salary schemes 25–6, 31, 32–3, 38, 106, 114, 119, 136, 137 financial markets 25, 33, 46, 56 flat benefit system 30, 31 French 43–7, 72–5, 106, 161–7 fully-funded 38 fund management 26, 146 generational conflict 154 generational deservedness 113–14 German 37–40, 66–9, 106, 153–7 graduated/state earnings related 24 indexed nature of 31 liberal tradition 23 life insurance policies 38, 46, 67, 68, 73 lump-sum withdrawals 40 mandatory provision 44, 58–9 market forces 2, 4, 27, 33, 37, 40, 45–6, 54, 56, 62, 67 means-tested 24, 31, 44, 135, 138 media communication on 133–8, 143– 8, 153–7, 161–7

251

minimum income guarantee/Pension Credits 25, 134 moral issues 112, 113–15, 116–17, 119, 120, 133–8, 143–8, 153–7, 161–7, 174, 177–81 National Insurance schemes 24 nonpublic provision 51 occupational plans 25, 26, 45, 58, 62, 67–8, 73, 74 Old age security 31 pay-as-you-go 25, 37, 38, 44, 47 PERP/PERCO 46–7, 73, 166 personal plans 26–7, 38, 56–7, 61, 64, 68, 72–3, 136 portability of 40, 45, 47 private sector 26, 32, 37, 39, 43, 45, 46–7, 56, 58, 73, 106, 134, 143, 154, 155, 156–7 public sector 25, 31–2, 37, 38, 43, 44, 62–3, 66, 69, 74, 144, 153, 162 public-private mix 24, 31 reforms 31, 37, 39–40, 45, 46–7, 59, 72, 74, 106 regulatory frameworks 26, 32, 39, 46, 47, 52, 56, 73, 106, 114, 136–7, 138 rights/responsibilities 134, 135, 145, 155 savings schemes/plans 27, 33, 69, 73–4, 166 secondary 24, 56 self-employed 27, 44, 46, 113–14 semipublic/nongovernmental funds 153 SERPS/S2P schemes 24, 25, 26, 58, 135 shortcomings 136–8, 144–5 social assistance 39 social partner model 39 social security 20, 120 stakeholder schemes 26, 27, 56, 58, 136 subsidies 39, 68 tax-advantaged schemes 17–18, 57, 61 transnational comparisons 51–3, 55 underfunding of 56–7, 62 universal character 23, 24, 30, 37 voluntary arrangements 46 Perri6 3, 14 Pfau-Effinger, B. 6, 7, 92, 93, 95, 104 Phillipson, C. 104 Pierson, P. 2 Pinker, R. 3 Podolny, J.M. 99 Polanyi, M. 1, 89, 108 politicians 88

252

Index

elderly care 57, 71–2, 75, 129, 149, 150, 152, 157, 170 pension systems 5, 7, 129, 147, 154, 165 Powell, J.L. 3, 5, 19, 83, 101, 104, 105, 106 Powell, M. 17 Powell, W.W. 99 Powlicka, 105 Primary Care Trusts (PCT) (UK) 28 provider associations, elderly care 140, 141, 142

Quadagno, J. 92, 95 Quasi-markets 14, 16–17, 19, 76, 78, 100, 181, 183, 185, 192–3

individual initiative 175 model 117–19 pensions 135–7, 145–7, 155–6, 163–5, 179–80 Reutter, W. 3 Riches, G. 30 Rieger, 92 Ring, P.J. 24, 56 Robertson, A. 104, 105, 107 Rodgers, J.J. 108, 122 Roggen, B.Y.H. 45 Rothstein, B. 92, 117, 118, 121 Rowlinson, K. 24 Rozin, P. 116 Rueschemeyer, D. 8 Rummery, K. 89, 116, 117 Ruschemeyer, D. 92

R

S

Ranci, C. 4, 13, 105, 106, 119 Rathgeb Smith, S. 17, 18 Ray, L. 3, 84, 91, 98 Régie des rentes du Québec (RRQ) 31, 63 research academics 129 assumptions 125–6 collective sense-making/hybrid settlements comparison 173–88 communications as they stand 130 compilation of articles 128 context of communication 131–2 design/methodology 127–32 exploitation of material 131 filtering system 130 final message review 130–1 first-round data review 128–9 general approach 125–32 journalists 129 language problems 132 limitations 130–2 media communication 126–7 moral issues 127–8 nonissues 131 organizational 129 qualitative content analysis 129–31 second-round investigation 129–30 sense-making 125–6, 132–73 think tanks 129 responsibility/statutory enactment 111–12, 117–19 basic fairness 175–6 elderly care 140–2, 149–51, 158–9, 169–71, 182–3

Sachβe, C. 16 Salamon, L.M. 16, 118 Sayer, A. 108, 109, 122 Sayer, D. 3, 84, 91, 98 Scarborough, E. 88, 92 Schmähl, W. 39 Scott, W.R. 16 semipublic providers 159 sense-making cleverness/education 174 collective 173–88, 193–4 consumer awareness 174–5 culture 7–9 fuzzy compromise 195–6 mass media/public debate 126–7, 132–73 moral economy 173 new interpretations 174–6 responsibility 175–6 sound management 176 Shewell, H. 12 Shionoya, Y. 93, 98, 99, 116, 118, 121 Skopcol, T. 92 Slater, D. 11, 12, 14, 99, 100, 120 Smart, B. 2, 6, 11, 84, 89, 90, 95, 98, 100, 127 Snell, J.G. 30, 113, 119 social gerontology 9 social policy 9 social sciences asymmetric development 87 capitalism 84, 85, 89 citizenship 93 classical thinkers 84 collective consciousness 84–5

Q

Index consumption 90 contract morality 84–5 dialogue/value-based communications 86–7 domestication of markets 89 economic/political power 87, 89, 95 human agency 86, 88 hyper-realities 87–8 institutional setup 88–9, 90, 93, 94, 95, 97, 99–100 interest in culture 84–101 markets 97–101 moral agenda 92–5 moral hazard 94 national cultures 96–7 postmodern narrative 87, 88, 90, 91 protestant ethic 85 reflexive modernization 86–7, 88, 89 risk society 89–90 socioeconomic change 84 subsystems 85–6 welfare markets 90, 91–6 sound management/institutional security 111–12, 119–21, 187–8 elderly care 142–3, 151–2, 159–61, 171–3, 181 measurability 176 model 119–21 pensions 137–8, 147–8, 156–7, 165–7, 1801 Spulber, N. 15 Starkey, F. 117 Stern, M.J. 3 Storey, J. 87, 91 Strathdee, R. 3 Street, J. 126, 127 Surender, R. 196

T Talbot, C. 13, 14, 17 Taylor, M. 16 Taylor-Gooby, P. 1, 5, 14, 16, 59, 89, 95, 116, 121, 122, 196 Thelen, K. 97 think tanks 21 elderly care 139, 141–2, 158, 159, 172 pension provision 129, 136, 143–4, 153, 155 Third Way politics 3–4, 93, 196 Thompson, E.P. 88, 108 Thrall, T. 126 Titmuss, R.M. 92 Tonkiss, F. 11, 12, 14, 99, 100, 120

253

trade unions elderly care 140, 142, 149, 158, 160, 167, 170, 172 participation in governance 32 pension systems 133–4, 135, 137, 138, 144, 145, 146–7, 154, 155, 161, 162, 164, 166, 167

U Ungerson, C. 4, 8

V Vaillancourt, Y. 36 Valkenborg, B. 8 van Berkel, R. 14 Van Crefeld, M. 120 Van der Aa, P. 14 Van Deth, J.W. 88 van Thiel, S. 14 Verba, S. 96 Verburg, R. 92, 116 Vickerstaff, S. 102, 105 Victor, C. 2, 102 Vidler, E. 19 Viebrock, H. 18 Vincent, J.A. 2, 101, 103

W Waddan, A. 21 Wahidin, A. 19 Walker, A. 104, 105, 112 Walker, C. 15 Walsh, K. 16 Wanner, R.A. 30 Ward, S. 27, 58 Weber, M. 6, 85, 98, 99 welfare associations 41 welfare culture ambivalence in 105 concept 92 culture of contentment 94 culture of poverty 94 development of 95 (dis)empowerment of social groups 93 eradication of welfare dependency 93 extrinsic cultural change 93, 94 formation of 92 individualism/collectivism mix 105 institutionalised provision 93 interpretation/resistance 94, 95–6 intrinsic dynamics 94–5 macrocultural factors 92 moral logic of 92–3, 95

254

Index

politics of welfare 93 postmodern approach 94–5 provision of social welfare 91–2 religious influences 92 social citizenship 93 social policy interest 91 Third Way approach 93 value choices 92 welfare-to-work programmes 93 workplace 95 see also culture; market culture; national cultures welfare markets advantages of 2 agenda 11–15 background 1–2 commercialized individualism and 3 comparisons 77–82, 192–3, 194, 196–7 competitiveness of 2 complexity of 189–90 contract culture in 3 cultural challenge 4–6 cultural change 3 cultural embeddedness 19 future dynamics/assessment of 2 governance/partnership models 3 hybrid cultures of 3, 184–8 institutional design/variety 9–10, 15–19 internal dynamics 192 logics 191 management 16 mechanism 191 old-age provision 2, 4–5 organizational landscapes/dynamics 19–22 as phenomenon sui generis 2–4 pragmatism in 3

recasting of state institutions 2–3 regulation of 51, 78 resource allocation 78 rise of 1–2, 11, 19 role of 2, 190–1 similarity/variety between 51 social/cultural phenomenon 4 subsidized 17–19 Third Way politics 3–4 welfare state as closed shop 20 creation of welfare consumer 1 cultural factors 91–6 golden age ’agencies’ 13 interpenetration of systems 1–2 market/nonmarket dichotomy 1 moral quality of 109 protection from market forces 1 rights/responsibilities 118–19 social engineering of 3 Welzel, C. 89 White, D. 16 Whiteside, N. 4, 18 Williams, C.C. 13 Wistow, G. 16 Witten, M. 84 Wollmann, H. 13 World Bank 13, 21 World Trade Organization (WTO) 13 Wuthnow, R. 84 Wyait, M. 3

Z Zelizer, V.A. 115, 123 Zijderveld, A. 92, 94 Zinn, J.O. 89