Born in the Northern end of Europe

The development of welfare services in Finland:following foreign examples and making national choices Jorma Sipilä CIF, Kiljava, August 4, 2009

Born in the Northern end of Europe • For us in Finland, the basic conditions of life are international: • International trade • Political alliances and agreements (EU, the Nordic Council, formerly the pact with the Soviet Union) • Existence of the state and the nation • Our future is not in our hands and has never been. • International = more important = appreciated • These thoughts are not always shared in big countries.

Finland as an object • Originally the more populated area of Finland was annexed to Sweden in the 12th and 13th centuries. • Birth of autonomous Finland 1808-09: France claiming Russia to attack Sweden because of its support to England. • Making the Finnish nation in the 19th century: supported by Russia to weaken the Swedish influence in Finland. • Option for independence: weakness of Russia in the end of WW 1, the difficulties of establishing the Soviet Union. • Lethal threat of losing independence in the 1930s: Finland into the sphere of interest of Soviet Union in its pact with Germany. • Survival in the WW II: Finns against the Soviet Union in two wars, more united than ever. This time Finland was the subject.

The early beginning of social policy • Industrial growth caused social turmoil in the 19th century threatening the power elites. • Social policy was a great political innovation to create peacefulness in society. • What about the diffusion of social policy? • There are different competing theories explaining the development of social policies: • Industrialism (”economy matters”), • Political power (”politics matter”) • Institutions (”institutions matter”).

The first steps of Nordic legislation • Based on analysis by Alestalo, Hort & Kuhnle (2010) • The Scandinavian Route as a peaceful process from semi-feudal agrarian societies to affluent welfare state societies • Social facts: • Scandinavia as a peripheral area in Europe in economic and political terms • Class of independent peasants (family farming) in strong position • Weak position of the landlords and aristocracy • Early working class movement consisting of industrial workers and a rural proletariat • Together a majority gaining political importance as democracy was advancing

Theories do not explain… • Why did the first major social insurance laws pass at about the same time in 1890-95 in four Nordic countries (Denmark, Sweden, Norway and Finland)? Reason for the similarity of timing? • The level of industrial development? • Uneven development among the Nordic countries • Advancing democracy? • Variations in the level of democratization (in Norway parliamentarism, in Denmark wider enfranchisement, in Finland limited self-rule only) • Political and administrative cooperation and coordination • The cooperation started ten - fifteen years later

Travelling ideas– national choices • German ideas of social insurance of the 1880s quickly drifted northwards • Possible solutions helped concerns about ’the social question’ to move higher on the political agenda • Public commissions set up: • Sweden 1884, Denmark 1885, Norway 1885, Finland 1888. • This did not mean that their proposals led to legislation. • Ideas move fast but their acceptance depends on political circumstances. • The sequence and contents of early legislation hardly at all followed the German example. • In Finland all the legislation had to be accepted by the Russian czar.

The Progressive Era without progress • Strained relationship between the Finnish autonomous government and the Russian administration in the 1890s and the 1900s. • The Finnish public administration was inable to promote reforms until 1917 when Finland got its sovereignity. • Thus, the culminating social question could not be relieved through social reforms. • In spite of active governmental committees and submitted proposals eg. on sickness insurance no progress in social legislation was achieved because of the right of veto the Czar had. • This was one of the reasons why social and political tension became critical.

Peculiarity: associations instead of the government • Social policy innovations were largely diffused in European or World conferences, which were exceptionally important arenas of social development in the progressive era. • Finnish civil servants could often not take part in those meetings as representatives of any government but as members of citizens’ associations only.

Independence and class war • The Russian control had been weakening during the war (WW I) but the opening political space was used to escalate power struggle in Finland. • When the political deadlock was over, the Czar killed and the Bolsheviks still weak the future was largely in Finns’ own hands. • The class war was started less than two months after the declaration of independence in December 1917. The reds were defeated with German help in four months. • Death toll 40 000, enormous human losses during and after the war. • The Communist party was forbidden between the world wars.

National independence without national integration • The outcome of the bloody class war led also the social democrats out of political power. Other European countries were developing their social insurance systems but Finland remained a poor relief country. Social expenditure stayed at an extremely low level until the 1950s. • The independent state joined the political-administrative meetings among Nordic countries in the 1920s but was in all terms much less developed than the others. Finns could not dream of anything like a ”people’s home”.

Conservative social progress: land reform • In social policy stagnation continued until the late 1930s. Instead of relieving the social question Finland concentrated on the land question. Finland was an agrarian country with slow economic development. The main solution to the social injustices was a land reform in 1920s: the crofters were helped to buy out the farms. • Strong temperance movement and international examples got Finland to stipulate a Prohibition Act 1919-32. • New legislation specifying bureaucratic rules for municipal social welfare in 1936. • In the late 1930s social democrats made a coalition government with agrarians. Their notable social reform was the earnings-related old age insurance covering all people with earnings (1938), devastated by war inflation.

WW II and new social integration • Two heavy wars against Russia 1939-40 and 1941-44 (together with Germany). Finland was not occupied by the Allies but for three years there was a control commission supervising the peace treaty • Death toll 80 000. 90 000 disabled soldiers, massive need of social welfare because of human and material destruction. Extensive compensations to the Soviet Union between 1944-1952. • Need for new kind of social and political integration during and after the war. The conservative and nationalist period was over. • Collective labour agreements • Population policies • Break-through of universalism • First large tax-financed benefit: child allowance 1948 • Communist party legalized.

Turning westwards – increasing Nordic influence • Germany had been very influential in Finland, particularly since 1918 because its support to the white government in the class war. Even a German king was elected but he never enthroned. • After the war political reorientation away from Germany toward the West, particularly Sweden and Nordic cooperation. Pact with Soviet Union. • Pact of Friendship, Cooperation, and Mutual Assistance 1948 • Nordic Council 1955 • Open labour market with Nordic countries 1955- • OECD 1969

Domestic politics • Skillful foreign and domestic policy made the Rural Party the strongest actor in afterwar politics. • Finnish specialities in the field of social policy have largely been outcomes of agrarian politics or of Center-Left compromises. • Social Democrats were split, which weakened the labour influence in social policy in the 1950s.

The golden years of universalism • Universalism was the postwar trend in the Nordic countries and in Britain. In principle it was an optimistic ideology that promised to end the class society and create social integration and order. • Before the WW II universalism was supported by the left. Later on the agrarians turned to be the main supporters of universalism together with communists. Social democrats became less enthusiastic, especially regarding income transfers.

Nordic universalism • The Scandinavian welfare model is often defined with the concept of universalism: • In social policy, the cornerstone of the model is universalism. The Scandinavian countries have – at least on paper - set out to develop a welfare state that includes the entire population. Global programs are preferred to selective ones: free or cheap education for all in publicly owned educational institutions with a standard sufficiently high to discourage the demand for private schooling free or cheap health care on the same basis child allowance for all families with children rather than income-tested aid for poor mothers, universal old-age pensions, including pension rights for housewives and others who have not been in fainful employment; general housing policies rather than ”public housing” (Erikson, Hansen, Ringen & Uusitalo 1987)

Universalism and social investment • The idea of universalism supports investment in all children and in human capital thus following present recommendations by the EU and OECD. • The particular idea in Nordic universalism is to increase employment and to improve the quality of labour force. • Benefits supporting women’s access to labour market have been very central • Universal benefits (education, daycare, child allowances) have been financed by the state taxation and not by contributions. • Nordic policy choices have made universalism strong and popular; not a target of criticism like in Britain. • Mostly social investments have taken the form of universal allowance or a service provided locally. • the risks are the costs of universal benefits and their exposure to retrenchment -- they are not protected by individual contracts (like employment pensions)

Universalism in Finnish politics • Finnish universalism has favoured poor regions and people outside the labour market. • All benefit but all do not pay. • Fighting for benefits to the non- and unemployed was a clever political strategy in an underdeveloped economy. • New people’s pension in 1956 – higher benefits to the poor. • Finally as the last Western country Finland got the sickness and maternity insurance in 1963, with the daily allowance covering also people with no income. • Higher child allowances for parents with more children. • Regional hospitals and social welfare institutions all over the country. • Health and social services in all municipalities: higher state support for poor municipalities. Primacy to poor municipalities in home help. • No school fees, free meals since the war.

Introduction of social work • Strength of municipal social welfare with its bureaucratic rules for poor relief, child welfare and treatment of alcoholics (1936 legislation). • Conscious introduction of social work in the interest of developing health care, family counselling, care of abusers etc in the 1950s. • Major role by voluntary organizations • Social work education at the School of Nursing • US-Finland educational bridge (eg. Kiljava 1956) • expert visits, seminars, fellowships

Criticism against social casework approach • Municipalities • suspecting individual treatment and defending the financial and bureaucratic approach in 1960s • School of Social Sciences as the main educational stronghold • Leftist criticism • in the late 1960s influenced by international New Left • ”social problems are societal, not individual; we have to change the society” • In Finland this movement turned soon national and was swallowed by the old left, strong influence over the youth by the orthodox fraction of the Communist party

Social work education to the university faculties • Social Policy as a university discipline with all degrees in 1945 (Helsinki and then the School of Social Sciences, Turku, Jyväskylä etc.) • Social work (”social welfare”) had been a study program on BA level in the Finnish and Swedish schools. It became a new orientation in the Faculties of Social Sciences in the 1960s. • Degree reform in the 1970s demanded work-oriented educational programs; therefore degrees of Social Work were created in the Faculties of Social Sciences and located at the Departments of Social Policy. • Social Policy as a major discipline has been rare in the academic world (Britain and Finland main exceptions). • Developing Social Work as a discipline in the context of Social Policy has been a unique Finnish arrangement. All the first professors of Social Work came from Social Policy. • Later on Social Work has become a large discipline because of the permanent lack of social workers and its special connection to Social Policy has almost vanished.

The Finnish disposition to pay cash-for-care • Cash for care as the most debatable Finnish social welfare innovation • popularity • broad political support – not seen as a second best arrangement as in other Nordic countries • in elderly care the most frequent in Europe in the early 1990s • most of the parents use the child home care allowance for a while, at least • international feminist criticism • Experiments both with child care and elderly care in the late 1970s; national legislation in 1985 and 1993. • Compensation for non-users was an important political victory for the agrarians • Parents’ entitlement to get a daycare place for children under 3 after the parental leave in 1990 (under school-age 1997) was compensated by an allowance to those who parents of children under 3 who did not use the service.

Questioned but increasing • Plenty of criticism on the CHCA: • Feminists: trap for women and their careers; supporting traditional division of labour in families. • Economists: supporting women’s non-participation in labour force; payment does not provide care. • Early educators: payment for neglecting the opportunity of professional education in the age when it has strongest influence. All users are not competent parents. • New maternity norms • Longer stay at home means better motherhood. • Followers in Norway, Sweden and Eastern Europe • favoured particularly by religious conservative parties • the Norwegian legislation avoids pitfalls better • local, not a national system in Sweden • ”The best and the worst care is given at home.”

Economic globalization – internationality as enforcement • Pressure toward the ”competition state” • the necessity to attract international investment (”new welfare state including the capital”) • social policy as social investment, not as social consumption • strong interest in cheap labour force immigration • weak restraints against increasing inequality • from universalism toward selectivism and marginalism • universal benefits are costly and easy targets for cuts • strained public economy threatens the quality of universal services • how to uphold the popular support without quality? • Clear signs of such development in international policy papers and in Britain, Finland and Sweden • recession in the 1990s hastened new politics in Finland

Future of the Nordic welfare model is not easy • Economic discourses tend to be oversimplified • In 1990s economists were ready to bury the Nordic model; ten years later they praised it • The Nordic model is still rational and efficient • its Finnish version even not expensive • External and internal conditions have changed • Limits to charge employers are more international. • Middle class makes the majority: • most people do not know if they gain or lose in collective arrangements • no permanent choice between good benefits and low taxes • Homogeneity of population has decreased; national integration is not a self-evident goal as it was.

It’s the economy, stupid! • During the financial crises the nation state is the strong player because only the states can take enormous loans. • When the recession is over, the states will be in debt and do their best to attract private investments. • The politics of retrenchment will be sharper than ever • Costs and duties will be transferred to families, particularly the health and social care for the elderly • Probably the Nordic model will experience backlashes, particularly in terms of quality and equal service.

Not the economy only, stupid! • Nordic citizens are proud for their societies that have functioned well. • Investors appreciate peaceful, risk-avoiding societies. • Nordic citizens are still inclined to make rational decisions • They know the facts and the alternatives better than any other people in the world. • We are still far from a situation in which people do not trust the welfare state. Universal benefits have the strongest support among ordinary people. • Democratic politics is the best protector of the Nordic model.

Nordic model is not the issue • The role of internationality has changed: • not only a reserve of national solutions to be borrowed, not only a battlefield of military alliances, but a world system that puts absolute demands • In a world facing climate change, rising food prices, hunger and lack of potable water present structures of social welfare are seriously insufficient. • It will be difficult to introduce international large-scale welfare policies but managing the alternative, international mass migration is at least as difficult. • Human survival will be the issue – not the perpetuity of any social models.

Finnish stones are sustainable Jurmo Island Enjoy the CIF conference!

Born in the Northern end of Europe