Europe's Industrial Revolution did not only bring us the pleasures of pollution, but the welfare state too was a direct result of the then thriving economic climate. While its remnants are being methodically dismantled across the Old Continent as the blind belief in privatisation assumes evangelical dimensions, China, and the overall Asian continent, is investing in public spending.
A contradiction in terms? Not really. In a sort of symmetrically opposing movement, wealth is coming into the hands of the infamous 1 percent in the West, whilst enjoying a fair amount of redistribution in China. As the US and European middle classes shrink, in China they seem to be enjoying mass popularity. A recent edition of "The Economist," dedicated to the Asian style welfare state revolution, reports that China's rural health-insurance scheme, which in 2003 covered only 3 percent of the eligible population, now covers 97.5 percent. A stunning figure, especially when measured against such a short time span.
Meanwhile, unemployment and disability benefits are being axed in the oldest parliamentary democracy in the world (England); not to mention the severe budget cuts in the educational and the cultural sectors. So, despite the increasingly abstract terms on which global economies seem to function, a rather specific phenomenon is emerging: The welfare state, once a Western prerogative, is on the rise in China. This shift in social policies illustrates just how state-funded social provision rather than being a burden on the national economy, is actually an indication of its health. Though the neoliberal mantra insists - in the face of contradicting evidence - that reduced social spending equals a thriving economy, what is happening on a global scale is proving such convictions irremediably wrong.
As the financial crisis rages on, Western governments are cutting public spending on all possible fronts, raising the retirement age everywhere and withdrawing benefits meant to benefit those in dire need. According to their own logic, this should free the state of its parasites and make the economy grow again; this is clearly not the case right now. Furthermore, the two European states that are suffering less from the current economic meltdown are Germany and France, which also happen to be the two European countries with the strongest and most efficient welfare states.
The remarkable speed at which the Chinese economy has grown is likely to repeat itself in the creation of a welfare state, virtually inexistent a few years ago, but rapidly expanding at the moment. Though many in the West still hold several stereotypical perceptions of China and its growing power, the creation of a social security net begs for a deeper understanding of several major global changes taking place at the moment.
If in fact the burgeoning Oriental advancement tends to be contrasted with rhetorical disquisitions about the supposedly higher ethical standards of the West, reality points in a different direction. In addition, it is also worth noticing how the vainglorious pride that the West systematically pulls out when comparing itself to developing countries, China included, is increasingly lacking in substance. For the rights to housing, studying and medical assistance are fundamental human rights, the violation of which has only met relatively little resentment or resistance in the West. The dawning welfare state in China is in fact what the West should be looking at; its long-term sustainability however, is a different matter altogether.
"The Economist's" recent editorial reminded Asian governments that "social provision should be about protecting the poor more than subsidising the rich." Well said, and just the exact opposite of what is happening in Europe and America.
This article has been previously published here.