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1. Does the welfare state have a future in an era of austerity and globalization?
The welfare state denotes a system of governance where state undertakes to protect its citizens, particularly those in economic or social need, through financial and institutional assistance. As such, it is considered a fiscally costly system, which has in recent decades been increasingly eroded due to national austerity measures. Here, the global financial crisis of 2008/2009 has played a major role. Yet, while increasing economic interdependence – including economic precarity – has been cited as a defining element of globalization, theorists on the latter remain skeptical whether this has indeed taken on unprecedented forms and can thus suffice as a marker of globalization per se.
2. What is a competition state and how might it confer a competitive advantage upon a national economy in an era of globalization?
Nonetheless, a central debate among globalization theorists has been an analysis of the transformative nature of state forms, pointing to a shift in statehood from one revolved around welfare states to one conductive to the so-called competition state (p. 10-13). The latter denotes a state whose principal strategy rests on marketisation. In doing so, it endeavors to make economic activities that are located within national territories more competitive in international and trans-national terms. Two consequences are largely cited as products of such measures. The first sees in the emergence of the competition state the erosion of the welfare state, where the former’s pursuit of free market mechanism ensures decreased protection of citizens from such (often exploitative) forces. The second consequence that is cited however, is the competition state’s ability to attract transnational corporations and companies, whose pursuit of capital is often hindered by the burden of welfare states. Whether this dynamic can be regarded a long-term and indeed sustainable (economic) advantage, however, is one that will largely depend on your own views regarding related matters, most notably perhaps the role and responsibility of states or other political institutions to its citizens, particularly in relation to a capitalist economic system that purports the commodification of labor, as well as the sustainability of such a system.