The Virtuous Circle of Sustainable Welfare as a Transformative Policy Idea

Tuuli Hirvilammi

doi:10.3390/su12010391

Abstract

Welfare states are highly dependent on the economic growth paradigm. Especially in social democratic welfare states, growth dependence has historically been accompanied by the notion of a virtuous circle, which ensures that social policy measures do not conflict with economic growth. However, this policy idea ignores the environmental impacts that are now challenging human wellbeing and welfare goals. In this conceptual research article, I reframe the virtuous circle of the welfare state by revealing its unintended consequences and internal contradictions before introducing a more sustainable policy idea. I argue that this new concept—a virtuous circle of sustainable welfare—could have transformative potential in designing a planned and socially sustainable degrowth transformation. Drawing on historical institutionalism, degrowth, social policy and sustainable welfare state research, I advocate for the virtuous circle as a heuristic tool to provide an appealing and convincing narrative for sustainable welfare state beyond growth. The policy idea of virtuous circle addresses interrelated institutional reforms and positive feedbacks between different institutions and policy goals. It also emphasizes that a holistic approach is necessary to avoid trade-offs and contradictions between social, environmental, and economic policies.

Highlights

In growth-based welfare states, zero economic growth typically leads to negative consequences for wellbeing [1]
The growth dependence has historically been accompanied by the policy idea of a virtuous circle, the notion that social and economic policies are interrelated and that social policy measures do not conflict with economic growth
I have argued that the new policy idea of a virtuous circle of sustainable welfare could have the transformative potential to design a planned and socially sustainable degrowth transformation

Summary

Introduction

In growth-based welfare states, zero economic growth typically leads to negative consequences for wellbeing [1] (pp. 74–75). I suggest that reframing the original policy idea by revealing its unintended consequences and internal contradictions can pave the way for a more sustainable alternative This conceptual article combines research on social policy and welfare states, the theory of cumulative causation [22], and the virtuous circle concept with research on sustainable welfare and degrowth. Expansive social policies and increases in social expenditures became legitimate when political forces found compromises between the interests of employees and capitalists It was this economic reasoning that made the wealthy population support expansion of the welfare state and the redistribution of income, whereas the working class began to favor economic growth due to its clear connection to the overall good and its benefits for society [28]. Welfare states became integral parts of growth constellations that introduced mass production and consumption and increased the use of fossil fuels and natural resources [33] (p. 52)

The Virtuous Circle and Its Challengers

Reframing the Virtuous Circle from the Ecological Perspective

Towards the Virtuous Circle of Sustainable Welfare

Discussion and Conclusions