Nov. 16, 2006

Former President Jeff Lehman cites globalization as one reason for predicted decline of U.S. welfare state

We are moving from a welfare state to a welfare planet, predicted former Cornell President Jeffrey S. Lehman, Nov. 9 in Bache Hall, in one of his first formal scholarly presentations on campus.

Lehman's early academic life was to a large extent, he said, concerned with understanding the American welfare state and its interactions between democracy and capitalism. But in his talk, "From Welfare State to Welfare Planet," Lehman explained how his interests in this area have expanded from a multidisciplinary and comparative nation-state focus to what he broadly terms "the welfare planet" or globalization model.

Lehman is on leave from the Cornell Law School, where he is a professor, and has been serving as a senior scholar at the Woodrow Wilson International Center for Scholars in Washington, D.C., working on cooperation among transnational research universities.

"Within our frame of reference the nation-state was the big, big deal," Lehman said to an audience of roughly 200 people. "Policies were evaluated for their impact inside national borders. We looked across national borders only for comparative purposes."

But for the past year, in large part due to his increased travels to China and India, Lehman has been moving among different socio-economic and academic circles.

"I have been living in the world of globablization, as it is understood in developing countries and in the developed world by academics, government leaders and investors of capital," he said. "In the world of globalization, nation-states are not the big, big deal. The big, big deal is with the planet."

Nation-states do matter, of course, "but they are artificial constructs," Lehman said. "They have less fundamental significance than do questions of global capital, global labor and the transaction costs of shifting those factors of production, along with production, itself, from place to place."

Then he brought the point a little closer to home:

"It is only a slight exaggeration to say that in today's conversations, the United States and France and China and Bangladesh are spoken of in the way we used to speak about New York and California and Alabama," he said.

Lehman then addressed the "collisions between the domain of the self-autonomous welfare state and the domain of globalization." He said that in the past quarter century, the welfare states (defined by general financial support, social insurance programs and regulatory programs) that emerged throughout the industrialized world during the 20th century, have contracted. The "most popular explanation" for this change, Lehman argued, is globalization.

"Popular in the sense that it is has been politically popular, invoked in debate, in the form, 'We have to cut back on our welfare state if we are to be competitive in a global economy.' And it's been popular in the press."

Lehman quoted from Gunnar Myrdal's book, "Beyond the Welfare State," in which the author speculated about a transition to a "welfare world."

Who would create such a system, he asked. The World Trade Organization? Lehman went so far as to posit China as creating the example of financing a system for its social programs that would not appear immediately as a tax or as an additional cost of China labor.

"The history of the welfare state over the past 65 years has been a history of expansion, maturation, siege and partial retrenchment," Lehman said. "Globalization may or may not be the cause of today's pressures to cut back. But I believe it will be a factor in how the welfare state continues to evolve. And my optimistic side tells me that, in the end, globalization could play the central role, 50 years after Myrdal, from welfare state to welfare planet."