Just read Jon Cohn. I wish I was still teaching comparative public policy, because this is one of the best intros to comparative welfare state development that I've ever read.
Here's the lede:
In today's political lexicon, "Detroit" has become synonymous with failure--a shell of a city inhabited by a shell of a once-mighty industry. It is, in various tellings, the product of individual achievement laid low by collectivism run amok, or of innovation smothered by addled corporate managers and sclerotic labor contracts. Libertarians against unions, environmentalists against gas-guzzlers, or car enthusiasts against bad engineering--everybody can find something to loathe.
But, for all of Detroit's mistakes, it is also a victim of something it did right: ensuring a middle-class lifestyle for bluecollar workers. When the carmakers, pushed by unions, agreed to provide workers with a steady level of purchasing power, comprehensive health benefits lasting into retirement, and various forms of workplace rights, they were promising something that all Americans covet. And, while the financial costs and managerial constraints associated with that effort have helped bring domestic carmakers to the edge of collapse, ultimate responsibility for this situation lies beyond Detroit.In a more enlightened society, after all, government would have made those promises and extended them to all workers, thereby spreading the burden of financing them to all taxpayers. That's how it's done in Europe and in Japan--which, not coincidentally, is the home of Detroit's most successful competitors. But the U.S. government never took that step. So, instead of a public welfare state, we got a private one, administered for only some workers and paid for by their employers. Sooner or later, this arrangement was bound to fail.
The creation of this privately run welfare state came neither easily nor quickly. It was the result of a decades-long transformation, carried out in two stages: first, when unions took advantage of New Deal legislation to transform life on the factory floor; then, when unions used their bargaining power to secure more generous compensation. And, to appreciate just how dramatic those changes were, it's worth recalling what life as an autoworker was like before this transformation began.
And the conclusion, for those looking for a quick fix:
Fortunately, there is. It's a model for the welfare state that already exists in other parts of the world and that, as it happens, has been getting a lot of international attention in the last few years. It's the Nordic or Scandinavian model, so named for the part of Europe where it's practiced, and its philosophy is simple. In these countries, government guarantees everybody, even blue-collar workers, most of the things Detroit once guaranteed its workforce--like middle-class wages, full health benefits, and subsidized day care. The government also guarantees nearly full incomes for the unemployed. Organized labor is still a big part of the picture; Scandinavia is actually the most heavily unionized part of Europe. But unions there serve a somewhat different function. Instead of trying to restrict hiring and firing--or, for that matter, obstructing trade--they focus on improving labor conditions and training displaced workers to find new work. They have a less adversarial relationship with management, although that has a lot to do with the fact that Scandinavian employers don't constantly attack unions the way American employers do.
Even though it takes high taxes to support such generous government programs, the Scandinavian economies are strong. That's led some center-left economists to suggest that this model for the welfare state represents the best hope for guaranteeing the kind of economic security companies once provided, but no longer can. As it happens, President-elect Obama's agenda includes universal health insurance, more subsidized child care, and better worker retraining--not to mention labor-law reforms. And, while Obama hasn't been talking up Sweden lately, his approach to policy suggests that he, too, believes government must assume the responsibility for providing benefits--and guaranteeing livelihoods--that once belonged to corporate America.
