Social policy

Social policy is used in many aspects of administration and politics, and it is concerned with welfare and social services (Anyon 2014). Social policy refers to the concepts and rules that are intended to demonstrate living circumstances. Healthcare, public services, criminal justice, education, and even work are frequently related with social policy. According to Deeming and Smyth (2015), social policies are activities that affect society by influencing how people access commodities and services, and this could be because social policy influences the distribution of products or services (p. 297). Depending on the use of the term, social policy has different meanings among different people and institutions according to Paul (Global Policy Forum), social policy encompasses government interventions and intentions of such interventions, it also covers the administrative and financial agreements reached at in a bid to improve the standard of living of the people, improve their access to resources and also make access of goods and services convenient (Spicker 2014). Social policies often have profound impacts on the society which is being targeted by it and this could be because of the fact that it has the power to change economic policies that might affect trade, demand and supply as well as government intervention in the economy.

Economic ideologies are the founding principles of social policies because the economy and social policies are intertwined, for example, social policies could be used to reduce the rate of unemployment and other even justifies government intervention in the economy. Keynesianism and neoliberalism ideas impact social policies and, when using them, it would be important to consider the ones that are more profitable to the society as a whole (Visser 2013 p. 421). It is from social needs that social policy stems and according to (Pellizzoni 2011 p.795), social needs are the relationships, services and goods that are necessary for satisfaction of the basic human needs such as housing, employment and standard of living. Economic policies are used in making social policies since economic policies affect the wellbeing of people since they have an effect on the cost of living and individual ability to meet their basic needs (Spicker 2014). At its core, social policy aims at improving welfare of the society and fosters their ability to meet basic needs including but not limited to, education, health, housing and social security (Anyon 2014). Key areas targeted by social policies are welfare of the people, poverty reduction, social justice, unemployment, standard of living, healthcare, housing, urban development and criminal justice.

Keynesianism

Keynesianism is a social policy positing that total government spending in the economy affects inflation and output in the economy, and this means that government spending has the ability to influence both national output and gross domestic product (Visser 2013 p. 421). Keynesianism was prevalent in the post war economic recession where to increase demand and stimulate economic growth; the government increased its spending and lowered the rates of taxes thus having an impact on reviving the economy by positively influencing the aggregate demand (Crouch 2014, p.7). According to Pellizzoni (2011), government intervention plays a role in reducing unemployment reduced taxation and interest rates to more investment thus creating jobs (p.800). According to Paul (Global Policy Forum), the market requires intervention in order to stimulate economic growth and raise the aggregate demand, this theory has proved to be effective in economic depressions where there is less aggregate demand, businesses in these times are unprofitable and any close down causing massive layoffs making the rate of inflation and unemployment high (Visser 2013 p. 421).

This theory posits that the government can intervene indirectly through fiscal and monetary policies; increasing government spending, reducing the rates of taxes and increment of revenue (Crouch 2014, p.7). When taxes are high, people spend less and save more, this has a negative impact on the demand for goods and services and because of this, businesses become unprofitable. According to Paul (Global Policy Forum), the Rudd Government’s 1999 fiscal stimulus that targeted to amend their social security policy in order to increase spending during the Christmas season hence stimulating economic growth (Visser 2013 p.421). Keynesianism is one of the simplest, intuitive and practical theories and it leverages on the idea that businesses would be encouraged to hire more people if they perceived that they are going to increase their sales and income but when demand aggregate fall, businesses decrease production and lay off workers. Unemployment would lead to an even higher drop in aggregate demand and when firms see that the demand is rising, they would hire people and increase production once again (Crouch 2014, p.7). If this is let to happen, the economy would be in a cycle of business boom and depression and it is at this point that exogenous government intervention is necessary to increase demand and in turn increase employment (Palley 2015, p.45). Keynesianism also focus on aspects such as government intervention in welfare of individuals and this is done by enactments that govern wages and foster wellbeing of individuals.

How Keynesianism Frame Social Policy

Keynesianism argues that government spending is important in stimulating economic growth, reducing inflation and unemployment (Crouch 2014, p.7). Liberalisation of the economy could lead to increment in competition and increase in the number of firms that are in a bid to satisfy the consumer, this would lead to increase in job opportunities. However, according to Paul (Global Policy Forum), job opportunities are exactly what the society needs. Job security, fair employment and should fair incomes are good to the society. People should be protected from discrimination during the employment process and workers should have a right negotiate their salaries through the different processes allowed by the law (Palley 2015, p.45). Keynesianism advocates for standardization of wagers and support to the worker that increases their bargaining power. Government intervention in social policies are often depicted through the introduction of programs such as training wage, job subsides and reciprocal obligations (Anyon 2014), that carter for the welfare of the society and bring about economic reforms simultaneously. In order to achieve full employment and social welfare for people, the government should intervene and ensure that businesses do not supernormal profits at the expense of the workers and consumers (Palley 2015, p.45). Keynesianism argues that the government should intervene in the labor market by enacting legislations meant to protect the workers, increase their benefits and assure them of safe and healthy working environments (Spicker 2014). This theory argues that the government should take an active part in some aspects such as health order to societal well-being.

Neoliberalism

During the post war stagflation, there was an increase in the need to free the market and eliminate government intervention in order to make the economy market oriented. Governments had to privatize some of its businesses and make efforts to change the economy from planned to free market (Palley 2015, p.45). Change of the economy from planned to free market was intended to foster entrepreneurship and economic development (Deeming and Smyth 2015, p.297). Neoliberalism refers to the process where the government liberalise the economy by little or no interventions and involves policies such as privatization of government institutions, free trade and reduction in government spending in a bid to influence economic growth. It focusses on increasing the role of the private sector in the economy (Peck and Theodore 2015). This economic policy is advocate for change of the economy from Keynesian consensus to market economies where the laws of demand and supply influence the distribution of goods and services in the economy (Wacquant 2010, p.220). Globalization came as a result of neoliberalism and most governments have had to restructure their economies using this policy. In simple terms, neoliberalism is a policy as well as an economic model that seeks to change ownership and administration of factors of production from public to private hands. At its core, this policy seeks to bring about the principles of neoclassical economics and postulates that the government must reduce its intervention in the economy by reducing subsidies, enacting tax reforms, limiting deficit spending (Deeming and Smyth 2015, p.297). Neoliberalism also seeks to exterminate fixed exchange rates, government regulation and privatization of the different businesses run by the government. In essence, neoliberalism implies that the economy should be left free from intervention by the government by eliminating barriers to trade so as to give the actors of the economy a free environment that would foster economic development (Palley 2015, p.45).

How Neoliberalism Frames Social Policy

Since neoliberalism encourages little government intervention in the economy, it promotes the deregulation of most aspects of the economy even privatization of government businesses (Wacquant 2010, p.220). According to neoliberalism businesses seek to increase their market share by customer satisfaction and increased production, this leads to employment, increased national output and reduced rates of unemployment (Peck and Theodore 2015). Since Keynesianism advocates for government intervention during economic recession, it does not promote long lasting solutions that would see the economy through time such as stagflation and high unemployment rates (Visser 2013 p.197). From early 1970s, there has been a gradual abandonment of Keynesianism and Neoliberalism has led to increased employment and growth in many multinational institutions due to globalization (Peck and Theodore 2015). Abandonment of Keynesianism came due to its inability to solve pressing needs of countries and it proved ineffective during stagflation period. In the current time, there is need for globalization and expansion of industries and businesses beyond national boundaries and this could only be possible if there was no intervention in the economy (Deeming and Smyth 2015, p. 297). Neoliberalism stresses the need of free competition thus market forces would allocate resources and distributing wealth in the economy. Neoliberalism postulates that there should be no government intervention in the market in form of social policies leading to freedom of trade. Market forces would be self-correcting and equilibrium would be achieved automatically (Wacquant 2010, p.220). It argues that government intervention and its responsibility in societal welfare increases the rates of irresponsibility (Deeming and Smyth 2015, p. 297). Neoliberalism posits that continuous economic growth and welfare can be achieved in a free and fair market.

Conclusion

Keynesian and neoliberal polices are often mixed in many countries resulting in what is known as mixed economies where there is free trade and government interventions in some areas such as healthcare (Visser 2013 p.197). Mixed economies come with individual and market freedom. In mixed economies, some sectors of the economy such as banking are put into private hands and this fosters individual freedom, however, there are government regulations that ensure welfare of individuals working in the private sector and it includes minimum wage bill and enactments that govern safe working conditions. It is clear that neoliberalism favours freedom of individuals while Keynesianism favours the welfare of the whole society, Neoliberalism perceive Keynesianism as a threat to individual freedom and a barrier to development of free markets where there is freedom of movement of goods or services (Spicker 2014). However, it would be important to note that Keynesianism protects the interest of the whole society while protecting them from harm and promotes social justice in the long run (Anyon 2014).











































References

Anyon, J., 2014. Radical possibilities: Public policy, urban education, and a new social movement. Routledge.

Crouch, C., 2014. Introduction: labour markets and social policy after the crisis. Transfer: European review of labour and research, 20(1), pp.7-22.

Deeming, C. and Smyth, P., 2015. Social investment after neoliberalism: policy paradigms and political platforms. Journal of social policy, 44(2), pp.297-318.

Palley, T.I., 2015. The theory of global imbalances: mainstream economics vs. structural Keynesianism. Review of Keynesian Economics, 3(1), pp.45-62.

Paul, J.A., the United Nations and Global Social-Economic Policy-Global Keynesianism for a New Era. Global Policy Forum (GPF).

Peck, J. and Theodore, N., 2015. Fast policy: Experimental statecraft at the thresholds of neoliberalism. University of Minnesota Press.

Pellizzoni, L., 2011. Governing through disorder: Neoliberal environmental governance and social theory. Global Environmental Change, 21(3), pp.795-803.

Spicker, P., 2014. Social policy: Themes and approaches (Revised second edition). Policy Press.

Visser, J., 2013. From Keynesianism to the Third Way: Labour relations and social policy in post-war Western Europe. Economic and industrial democracy, 21(4), pp.421-456.

Wacquant, L., 2010, June. Crafting the neoliberal state: Workfare, prisonfare, and social insecurity. In Sociological Forum (Vol. 25, No. 2, pp. 197-220). Blackwell Publishing Ltd.