 All right, that's fine. No worries. Good morning, everyone. Welcome to Political Science 303 once again. I think Tuesdays are better because we start at 10.30 instead of Fridays, which starts at 9-ish. OK, so you look more awake this morning. Some of you have other exams. I know, but they still showed up. Thank you for coming. OK, where did we leave off? Last time, ladies and gentlemen, we were discussing, I think we started off with political economy of economic and social policies. I'd like to complete my discussion there and then start off with a new part on governance and policymaking. But any questions from last time? Any questions, anything that concerns you? Anything that looks looked weird while you're working at home on it or about it? Everything looks crystal clear. That's surprising. OK, we'll see. All right, saturism. This was the last bit we were discussing. Consensus era, increased state responsibility, massive government intervention into the economy, fine-tuning, Keynesian demand management, taming the business cycle through the hands of the state, and the Keynesian welfare state, which we briefly talked about last time, with different programs. And then this was happening post World War II for about 25, 30 years, 1945, till about the early 1970s. What happens in the early 1970s? 72, 73, first crisis, opaque oil-induced crisis, unemployment stagnation of economic activity, a little bit of inflation creeping up with the prices of oil rising. Then a second crisis, 78, 79, winter of discontent. So massive disruptions, not only economic, but also social and finally political, that there was a swing from social democratic left consensus to the right. I think, yes, this would be your right. So we see the onset of the conservative revolution. Margaret Thatcher being elected to office, and she rolls back the state, or she promises to roll back the state with a set of policies, which we generally discuss under neoliberalism, or neoconservatism. Among these policies are or were liberalization, deregulation, privatization, and a monetized ideal or monetized doctrine of inflation is everywhere and always a monetary phenomena. Forget about your Keynesian tools. Focus on your monetary levers and restrict the growth of money supply so that there would be much less inflation in the economy. If you push money liquidity into markets, into the system, then prices will rise. So we don't want that. That's our chief economic evil, Thatcherites would argue. So let's fight against that. We may have some unemployment, but that'll taper off. Markets will clear, and markets will correct themselves. So that's about it. Under Thatcherism then comes 1990s new labor. The pendulum swings back to center, center left. New labor with a new platform for stability. They emphasize public finances. So stable finances, what do we mean by stable finances? What do we mean by state finances? Public finance. Taxes end. So you collect taxes and you expenditures. Very nice. OK, I'm very glad this morning. So taxes and expenditures, you want to stabilize them. You want to put them on a par. So stable finances, a market reinforcing mechanisms, instruments, policy instruments. And the political basis of support, or basis of political support, is quite untraditional in the sense that new labor, as we talked about, really addressed business groups or groups around business groups, not only traditional labor or traditional unions, but more widely distributed along both sides of the spectrum. So more pro-business. The idea is endogenous growth theory or new growth theory where human capital is very important. Ladies and gentlemen, what do we mean by human capital? Human capital. It has something to do with the labor force. That's very good. Education, trainings, experience, very good. So education, training, and experience, all of these make up one's quality of the labor force, make up one's human capital. From the individual's perspective, you invest into your human capital, you develop your skills, you attain higher levels of education, better quality education, and as you gain experience, you develop human capital. And the new growth theory says not only quantity of labor, but quality of labor matters. So human capital is very important. And investing into high-tech sectors, and these sectors, from semiconductors to computers, from energy to military equipment. So massive investment into these sectors, or out of which you expect high economic growth. So because there will be higher levels of value added produced there, high technology, and you'll be attaining higher levels of economic growth. And this would bring, or this would give Britain an upper hand in the game, in the new game of globalization. So Britain would benefit from surfing the tide of globalization. So that was the program under Platform for Stability and New Labor's program, which once again was in a way, or sometimes referred to as a third-way program. Then comes conservative liberal coalition followed by a conservative coalition in which we've got a commitment to deficit reduction of the deficit, deficit reduction to stabilize the UK economy, British economy. And there were cuts announced, which were centering on certain programs, which had something to do with the welfare state, which included, for example, housing subsidies provided to low-income households, an increase in the age of pensions. For anyone to be eligible to pensions, full pensions once, if and when, or once you retire, you need to come at, you need to complete an age. In the West, this hovers around 65 years of age. In Turkey, it used to be somewhere 20, 30 years ago, somewhere around 45 for women, 50 for men, has been creeping up, 55 for women, 60 for men. And now we're always discussing whether we should increase this parameter to 65 for women and 60 65 for men and 60 for women. So if you increase the pensionable age, the pension age in which you'd be eligible for standard full pensions, are you giving more benefits or are you giving less benefits? If you're increasing the age of pensions or pensionable age, less benefits. So the state in a way would be economizing, would be cutting from those programs. So pension age increased. Child benefits, especially for higher income or middle-class families, they've been reduced. And some welfare benefits to be reduced. All of these, the government announced, would be amounting to about 20% of the savings, about 20% of the entire budget aiming at social services and social aims. So a 20% cut in those. That was one of the programs in terms of the role of the state for the conservative liberal government. Then comes social policy. So these were basically, we've covered 20th century economic policy, the role of the state and the economy, the role of the British state and the economy. Now let's discuss in a little bit more detail what do we mean by developments in social policy. We see the onset, the emergence of the British welfare state during, in fact, during the war. The plan was there. Lord Beverage has drafted or had drafted a plan to build, to introduce a welfare state, a state free of all social ills. That was the plan. It's sometimes referred to as the British, I'm sorry, the Beverage Plan or Beverage Report, 1943, at the height of World War II. So when the war was over, you remember that there was common misery and that there was some room, a political window of opportunity for change. Yes, there was collectivism, but the British ideals of less affair had always been lingering before World War II. But after World War II, given common misery, given poverty, given mass destruction, people believed that they needed a change. And the way to bring about that change had to be through the hands of the state. So instead of the invisible hand of the state or invisible hand of the market, I'm sorry, they chose as an outcome of the consensus among labor and capital and all sectors, they chose to bring about economic growth through the hands of the state. So that's what we mean by the consensus area era. That's what we mean by the collectivist era or the collectivist consensus. And sometimes this is referred to as the era of embedded liberalism. This is liberalism because the state would intervene at the macro level. It would build the infrastructure, but it wouldn't intervene into micro sectors. So it would make possible an environment conducive for economic growth and social well-being. It's sometimes referred to, as I said, embedded liberalism. It's embedded because there was a consensus behind it. It was embedded socially as well as politically. OK. The kind of the welfare state that the British installed or introduced was an extensive welfare state. But this wasn't particularly a generous welfare state. Unlike the welfare states in Scandinavia up north and to a certain extent continental European welfare states, the British welfare state is not a particularly generous welfare state. So the benefits programs are there. They're quite developed. But they're not necessarily help individuals make a living out of it. Yes, they do protect the poor and the needy and those under risk in the labor market. But they're not generous enough for individuals to sustain a good life. A high standard of living. One exception is the National Health Services, which is the health care as well as the sickness program, which is based on the principle of universalism. So anyone who is a British citizen, regardless of whether you contribute to the state through social security contributions, you're entitled to health care or benefits, these kinds of benefits, as well as services. So it's a universal service. And every citizen, every British citizen can benefit from it. The idea is that the welfare state is comprehensive in the sense that it is very much developed. It has all kinds of programs. It was, in a way, a pioneer in the advanced industrialized world in terms of a comprehensive system. So it incorporates all kinds of programs. So there is the program for pensions, unemployment insurance, health care, which includes partly sickness, disability, child care, maternity benefits, housing benefits, social assistance, what have you. So all areas that come under a typical welfare state, as we know it now, have been provided since the end of World War II. So the British welfare state is about, is it 70 years by now? It's about 70 years old. So it's a comprehensive welfare state? Yes, not necessarily.