China, Social Insurance and the Welfare State: A Global Historical Perspective
Social insurance and the welfare state have long been and remain of global interest. For example, the controversy surrounding health insurance that began in the late nineteenth-century industrialized world burns even brighter today in the world's capitals.1 In the United States, health insurance reform is currently a matter of hot debate, while China's long established dual-system of old-age insurance has recently become a major social issue. Most of the debates have been carried out within a national context, however, which is understandable given that social insurance issues have been always regarded as domestic in nature. But the development of social insurance and the rise of the welfare state have been deeply influenced by global patterns and models, as seems to be clear from the evolutionary course of social insurance in China in the twentieth century.
Social insurance has been a world-wide phenomenon since its invention in Germany in the 1880s.2 Social insurance is defined as government-sponsored programs providing benefits and services in such contingences as old age, sickness, unemployment, maternity, and work injury. It was first diffused from Germany to western and northern Europe, eastern and southern Europe, then to Australia, New Zealand, major Latin American countries, Japan, North America, and then to the rest of the world after World War II.3 China began to consider social insurance programs as early as 1923 and 1924, under the pressure of the International Labor Organization (ILO) which was devoted to promote the German social insurance around the world since its inception in 1919.4
Social insurance has proved to be the historical core of the post-war European welfare state, which is defined as state responsibility for securing basic welfare benefits for its citizens to maintain a national minimal living standard. Since the 1980s social insurance, especially the welfare state has been challenged by neoliberalism. In the case of old-age pension systems, in mid-1990s the World Bank began its global campaign of privatizing social insurance-based pension systems, especially in Latin America, Eastern Europe, and other regions and countries in the world; proposals were also considered to privatize the US social security system in 2005 under the Bush administration.5 In China the World Bank-promoted neoliberal pension system has increasingly directed China's pension reform since the mid-1990s.6 Nonetheless, social insurance systems, especially those adopted in the western and developed countries have remained the dominant form of social protection.7
This article falls into four sections. The first section briefly surveys the concepts of social insurance and the welfare state and analyzes the mainstream theories on the welfare state so as to reveal their significance in terms of world history as embodied in the notion of social citizenship. It also explores the long-lasting features of the German social insurance model and the global spread of social insurance programs since the 1880s. The second section critically surveys the literature on China's social insurance, arguing for the necessity of a global historical perspective which can incorporate China into the mainstream welfare state debates. The third section applies a global historical perspective to analyze China's labor insurance under high-tide socialism (1949–1976), showing that China's social insurance was rooted in the global social insurance movement which it learned from prevailing models elsewhere. The last section discusses how China's experience of social insurance systems, both capitalist and communist, may expand our understanding of twentieth-century China; it will also explore the pedagogical applications of this research as a case study in policy diffusion among nation-states.
Social Insurance and the Welfare State in World History
During the nineteenth century, the "social questions" caused by industrialization became the major issues in the industrializing European states. The "social questions" included labor conditions; public health, education and housing; and workers' risks like work injury, unemployment, sickness, old age, and the death of bread-winners that would lead to income interruption or loss.8 At the beginning, it was workers themselves who organized mutual aid funds to provide sickness and death benefits to their members. In the 1850s, the European states began to interfere in these existing voluntary funds, making these funds compulsory and requiring employers to contribute to these funds on behalf of workers. But it was not until the 1880s that modern social insurance emerged when Germany issued a series of social insurance laws which established national compulsory social insurance programs.
The German social insurance established a model that has endured for more than a century and reproduced itself in various countries. This model included five basic elements. The first element is coverage: from an individuals' perspective, it is about who has the right to protection; from a society's perspective, it is about who needs to be protected in the interest of the society as a whole. The second element is about the social risks to be covered. Should the government programs cover a comprehensive set of risks or only some of them? The third element is on eligibilities and benefits: under what conditions can the insured receive their benefits and how much should the benefits be? The fourth element is financing: who should pay for the system? Work injury insurance is normally paid solely by employers while other types of social insurance are paid by both workers and their employers. The state underwrites any deficiency of the funding. The fifth element is administration: who should participate in the administration: the workers, the employers, or the state.9 Historically, the tendency has been towards centralized administration by the state.
When the German model was spread to the rest of the world, it inspired a socialist model of social insurance as Lenin put forward his social insurance principles in 1912. As a negation of the German capitalist model, Lenin proposed a system to be solely paid by employers but administered by workers themselves. This system should cover all sorts of social risks and provide full-wage compensations to both workers and their families. Lenin's principles became the basis of the Soviet model of social insurance associated with Stalin in the 1930s.10 Both the principles of Lenin and the Soviet model were spread along with the global communist movement, while the German model spread around the world mainly due to the ILO's promotion and learning/emulation among nation-states. In China's case, from the late 1920s onwards the Nationalist government kept drafting social insurance bills following the German model, while the Communists imitated the Soviet model in the areas they controlled. Eventually the Communists established Soviet-style labor insurance in China in 1951, while the Nationalists in 1950 set up German-style labor insurance in Taiwan after they lost the civil war and retreated there. These two models—capitalist and socialist—existed well into the 1990s when a new global model of privatization (the Chilean model) spread in Latin America, Eastern Europe, and other places.11
In the post-war era, Western countries consolidated their social insurance programs and constructed the welfare state as we know it today. The term "welfare state" was first coined by Winston Churchill in 1941 as a contrast to the warfare state of the Nazis, and came into public usage after the publication of The Beveridge Report in Britain in 1942.12 The nature of the welfare state is embodied in T. H. Marshall's notion of social citizenship, the final stage of his three-phase evolution towards fuller citizenship.13 For Marshall, citizenship based on the British experience includes three components: civil, political and social rights. The civil citizenship includes rights that are necessary for individual freedom, which was realized through the long eighteenth century. Political citizenship includes the rights to vote and participate in sovereign parliaments, which was obtained during the nineteenth century. In the second part of the twentieth century came social citizenship, which was defined as "the rights to a modicum of economic welfare and security to…share to the full in the social heritage and to live the life of a civilized being according to the standards prevailing in the society."14 According to Marshall, the nature of social rights is attached to the status of citizenship, and a citizen by virtue of being a citizen should be guaranteed by the state a secure level of social welfare. Thus, the term "social citizenship" can be defined as "the belief that, since all citizens are assumed to be fundamentally equal in status and dignity, none should be so depressed in economic or social condition as to mock this assumption. Therefore, in return for the loyalty and virtuous civic conduct displayed by the citizen, the state has an obligation to smooth out any gross inequalities by the guarantee of a basic standard in terms of income, shelter, food, health and education."15
Yet, how is social citizenship actually realized by the state? Esping-Andersen's concept of "de-commodification" provides a good answer.16 This concept asks to what extent a citizen does not need to rely on the market for his or her basic needs in the circumstances of income interruption caused by social risks. Thus, social rights can be measured by the levels of and conditions for various benefits provided through various social insurance programs. For instance, Walter Korpi measures social rights during sickness by the level of and conditions for sickness cash benefits, with the purpose of finding out "the extent to which the normal living standards of an average industrial worker are protected through legislated rights to cash benefits during illness."17 Korpi's measurement is consistent with the concepts of social citizenship and de-commodification. As Korpi put it, social rights of individuals are "an outflow of their status as citizens."18
The growth of the welfare state in the 20th century is such a salient phenomenon in world history that a huge amount of literature has accumulated on it since the 1950s and 1960s. This literature can be categorized into two types: structural and institutional approaches. Structural approaches focused on structures such as industrialization and modernization as the driving forces.19 These theories argued that industrialization destroyed the traditional social protection institutions such as families, churches and guilds, and thus created a need for the state to provide social protection through social insurance and other forms. In the 1970s new studies emerged, arguing that the structural studies ignored human agency in their explanation. Thus these institutional approaches stressed the role of working class, middle class, political parties, and bureaucrats in creating and maintaining the welfare state.20 Since the 1990s, the structural approaches evolved to include globalization theories,21 while the institutional approaches evolved to include power-resources theories.22 Meanwhile, the structural approaches that emphasized economic factors led to the argument of convergence of welfare policies while the institutional approaches that focused on political actors led to the argument of divergence of welfare policies. At the margin of the literature, there emerged studies focusing on the role of international diffusion in the origins of the welfare state. These studies refuted the mainstream theories mentioned above either by quantitative or qualitative approaches, arguing that it was international diffusion that played the most important role in the origins and growth of the welfare state in the western industrialized countries.23
But these studies predominately focused on western industrialized capitalist countries including Japan, while ignoring the rest of the world—including China, the largest non-Western socialist state. Even the newly developed globalization theories and power-resources approaches, when extended and adapted to East Asia, Latin America, East Europe and developing countries, excluded China in their analyses.24 China was further excluded from the discussion on the East Asian welfare model as shown in the next section.
Study of China and the Welfare State
Scholarship on China is understandably slow to engage in the mainstream welfare state discourse, which is the same as those of other non-western and developing countries. It was not until the mid-1980s that scholars began to pay attention to the welfare systems in East Asia, especially Japan and the "four little tigers" (China is not included), due to the rise of "Asian economic miracle." Some of these studies have followed the convergence thesis, arguing that East Asian welfare system would converge with the western systems. As Aspalter puts it, "it can be expected that similar structures of social stratification (by class or be status), similar social movements, similar power of comparable political parties, similar party coalitions, and similar class coalitions and so forth make similar cross-national welfare state development likely and support the convergence of social systems."25 The majority of these studies, however, have treated East Asian social welfare as having its distinctive characteristics, focusing on building an East Asian welfare model.26 This model is argued to have its roots in Confucian values, which are, it is argued, decisively different from the Western welfare state that is rooted in Judaeo-Christian values. The social rights which are the basis of Western welfare state did not have such a role in East Asia, where corporate development was more important than individual rights. Thus, the Western welfare state could not be emulated by non-European societies. As Elmar Rieger and Stephan Leibfried put it, "Western values have decisively shaped the social politics of Western countries and continue to do so, but they have been unable to leave a decisive mark on social politics in East Asia."27 And "in fact, the development of social policy in Europe and North America is—in a world-historical perspective—highly idiosyncratic."28
Although China was normally excluded from the discussion of the East Asian welfare model, numerous studies have addressed China's social security reforms.29 These studies are not historical and have focused on the economic reform era (1978 to the present), putting social security reform against the backdrop of economic system reforms.30 In the larger literature of industrial policy, social security is often treated as supplementary.31 In the relevant literature, social security is often treated as one of the unique features of the Danwei, China's work units.32 There are some historical studies of China's social security, which were confined in the framework of socialism and focused on the second part of twentieth century.33 Since the 1990s, some scholars in China have produced historical studies on China's social insurance and labor laws in the 1930s and 1940s, but most of them are merely descriptions of the concrete contents of the regulations and laws without much discussion of the social, economic and political contexts, let alone the global debates.34 Recently, a few studies analyzed how Soviet labor laws influenced those of China, but they only focused on the late 1940s and 1950s.35
Thus, the mainstream scholarship on China has not yet joined the theoretical discussions on the welfare state. But Bin Wong's essay on citizenship in Chinese history is an exception.36 Wong's essay was consistent with his book China Transformed, in which Wong employed a two-way comparative approach to study Chinese history, in order to go beyond the dominating western-centered impact-response paradigm originated in the 1950s and the China-centered perspectives which emerged in the 1970s in the US.37 Wong argued that theories and concepts based on European experiences did not apply in China, not because of culture but because of a unique Chinese historical trajectory which was qualitatively different from that of European experience. Employing Marshall's concept of citizenship to "help illuminate relations between the Chinese government and the people it rules," Wong argued that it "did not exist in quite the same terms in China."38 Instead, Wong argued that the Chinese state and elites provided various popular social welfares—equivalent to the substantive content of European social rights—because of Confucian paternalism in late imperial China (1368–1911).
Thus, Wong argued that while European social rights were realized through bottom-up social movements, the substantive contents of European social rights in late imperial China were guaranteed from the top down by the state. Moreover, in the first half of the twentieth century, when European social rights became an increasingly prominent feature of citizenship, the Chinese state's ability to provide social welfare was in decline in its post-imperial period. In the second half of the twentieth century, when the European welfare state matured after World War II, China under communism provided extensive and substantial social and economic rights, such as "the iron rice bowl," health care, housing, and subsidized prices on daily necessities, to its urban citizens, and collective provision of basic subsistence, medical care, and education to its rural peasants. Since the 1980s after the economic reform began, however, the Chinese state withdrew its commitment of providing comprehensive benefits to its citizens.39
Wong's narrative of the substantial social rights in China provided an excellent brief outline of Chinese states' historical provision of social welfare to its people. However, such a narrative has its fundamental flaws. First, the social welfare benefits such as emergency relief, soup kitchens, public work, poorhouses, and orphanages provided by late imperial China were not unique, instead, common in the contemporary world. The social welfare provided by late imperial China can be categorized into two kinds: one was provision of emergency relief to famine victims through the public grain granary system, soup kitchens, and public works projects;40 the other was poorhouses and orphanages for the aged, blind, orphans, and others who did not have any relatives and friends to fall back on. Except for the public grain granaries, other measures widely existed in the world. For instance, the early modern European states provided social welfare through their poor-law systems. In 1601 Britain issued its famous English poor law, which was the first state legislation representing the most highly developed state poor relief in Europe. The British poor-law system was financed by taxes, supervised by the central government and administered by local authorities. By the mid-nineteenth century, this system had already grown into a very expensive one. In 1850 more than 1 million people (about six percent of the population) received relief in England and Wales, among whom 123,000 were indoor paupers and 886,000 outdoor recipients.41 The poor-law system was universal throughout Europe, and there was much borrowing and learning among the states.
Second, Wong ignores the decisive differences between the social rights realized in Europe in the second half of the twentieth century and the social welfare provided in late imperial China. Like the poor law relief in Europe, imperial China's social welfare targeted at the poor, while European social insurance benefits, the core of European social rights, had nothing to do with the poor but were for wage earners and employees who relied on employment.42 Moreover, the financial sources for social welfare came from government revenues and private donations, while those for social insurance come from the contribution of employers and employees with states subsidies in time of revenue deficits. Furthermore, social insurance benefits, as rights based on recipients' payments, were adequate to maintain a minimal living standard in the developed countries in the post-war era,43 while social welfare benefits were often merger and stigmatized in both imperial China and in early modern Europe.44 Furthermore, Wong's statements on post-imperial Chinese states and Communist China before and after the economic reform beginning in 1978 overlooked the new developments in China's social welfare in the twentieth century, which will not be discussed here due to the space limits of this study.45
This critical literature review calls for a genuine global historical perspective to study the welfare state in general and China's social insurance in particular. This task is even more urgent since modernization theory still prevails in the studies of China's social policy; and China is still following global models in its social security reforms,46 although the policymakers are rhetorically advertising "a socialist social security system with Chinese characteristics."47
Social Insurance in Twentieth-Century China: A Global Historical Perspective
What is such a global historical perspective to the study of China's social insurance in the twentieth century? Such a perspective should not only put China's experience in a global historical context, but also reveal its patterns and driving forces, and the implementation of the adopted policy. Thus, a global historical perspective will empower us to treat China's social insurance as part of the global diffusion of two major social insurance models since the 1880s; it will reveal the motives of China's policymakers in emulating certain global models, and enable us to understand that global models only provided the basic framework while national politics determined the timing and specifics of the adoption. This should allow us to realize that copying institutions from global models will normally lead to failure in implementation which is subject to domestic politics.
Here I will apply such a perspective to analyze China's labor insurance (1949–1976), which serves as the baseline of the ongoing social security reforms since 1980s. Communist China was established in October 1949, and a drafting committee on labor insurance was formed in November 1949. After about a year of preparation, the labor insurance regulation based on the Soviet model was issued in February 1951. Communist China's adoption of the Soviet model had its global historical roots, as discussed earlier in this article, but also was strengthened by the Cold War which divided the world into two camps: capitalist and socialist. For ideological, historical, and strategic reasons, China joined the socialist world led by the Soviet Union and followed the Soviet Union in every aspect of its state-building processes.48 As a part of socialism, the labor insurance system was regarded as indispensible for China's socialist construction. Thus, the motive of Chinese policymakers was to imitate the Soviet model of social insurance to build socialism in China. More specifically, China wanted to show its socialist allies that it had adopted a socialist labor insurance system as a symbol of being part of the socialist world; also, China wanted to show its people that the new China was superior to the old China, because the Nationalists were unable to adopt a labor insurance system.
During the concrete drafting process, Li Lisan played a critical role. Li was one of the earliest party leaders in organizing the labor movement in the 1920s, and the highest leader of the party from 1928 to 1930, when he was removed from the position and forced to go to the Soviet Union. Li returned to China in 1946 with an excellent command of the Russian language. In 1949 Li was appointed the Labor Minister and Chairman of the Trade Union Central of the new China, and thus he was in charge of the drafting committee on labor insurance. At that time, the international section of the Trade Union Central had four Soviet experts who helped with the drafting process.49 Thus the national labor insurance system followed all the essential principles of the Soviet model, but was also modified to fit into China's circumstances, such as the low level of economic development, lack of administrative resources, and shortage of government revenue.
Following the Soviet model, this labor insurance regulation did not require workers' contributions; it did not provide unemployment insurance, but set up all other types of social insurance; it put the trade unions in charge of its administration; it copied many details regarding eligibility and benefits, including special treatment of trade union members, model workers and hero veterans; it excluded those who were deprived of their political rights and those who were deprived of civil rights.50 But Li also modified the Soviet system. For instance, China's labor insurance was applied to all kinds of enterprises with more than 100 workers, due to China's poor administrative ability, and labor insurance funds came solely from employers' contributions without any transfer from the state budget, because of China's shortage of revenue.
Meanwhile, the Chinese policymakers claimed that China's labor insurance was part of the international socialist social insurance system, which was inherently superior to capitalist social insurance.51 The reasoning was that the Soviet social insurance absorbed the essence of the capitalist system while abandoning its shortcomings. While workers in capitalist countries had not only to contribute to the system for their own benefits but had also to support a parasite class of government agents who ran the system, workers in the Soviet Union were not required to pay and were in charge of the system. In addition, the officials claimed that unemployment was eliminated in the Soviet Union and thus there was no need for unemployment insurance in socialist countries.52
Once the initial labor insurance system was established, it was subject to national political forces in its implementation. From 1951 to 1976, the evolution of the labor insurance system can be divided into three stages: initial implementation of the system from 1951 to 1953; perfection of the system from 1953 to 1956; and the weakening and breakdown of the system from 1956 to 1976. From 1949 to 1953, the major tasks of the state were to consolidate power and rebuild the economy. The state used labor insurance to strengthen its political legitimacy, because labor insurance was so welcomed by the workers, just as land reform had attracted the peasants.53
In 1953 when the Party issued the "general line for socialist transition," the major task of the state was to transform China into a socialist country. This started the first five-year plan focusing on heavy industrialization, modeled on the Soviet experience.54 As a result, China's labor insurance system was further perfected by moving in the direction of the Soviet system. First, the stated objective of labor insurance was to "serve production."55 This was consistent with that of the Soviet system, which was fundamentally different from capitalist social insurance, which was to meet the workers' needs on a contractual basis. Second, the benefit levels were significantly increased and eligibility was greatly liberalized in order to encourage workers to engage themselves in the large-scale production. Third, labor insurance was extended to retail stores and commercial enterprises to facilitate the socialist transition processes. In such an atmosphere, in 1956 the national trade union proposed a universal social insurance system for all workers and employees in all kinds of work units by following the Soviet model.56
But the year 1956 turned out to be the turning point of learning from the Soviet model in general and social insurance in particular. The Soviet-style industrialization proved to be too costly and agriculture was being ignored. For labor insurance, two issues stood out: the rising costs and the unbalanced coverage. For the first issue, it was particularly due to the rise of the medical care expenses which was in turn partially due to exploitive usage.57 The second issue of the unbalanced coverage referred to unequal treatment of non-permanent workers who received much fewer labor insurance benefits or even no benefits at all. The result was workers' revolts, worsened by the incidents in Hungary and Poland.58 For instance, in 1956 labor disputes broke out in Guangzhou in which the workers used the 1956 Hungarian incident to demand higher wages and benefits. In Shanghai many strikes broke out in May and June of 1957, the number of which even surpassed those in 1919, 1925, and 1946.59 From September 1956 to March 1957, a total of 10, 000 workers (mostly temporary and contract workers) and 10,000 students went on strike around the country.60
Despite workers' revolts, the Communist party in 1957 responded to the costly Soviet model by issuing its new general line of "building socialism more, faster, better, and cheaper." As a result, in the following twenty years between 1958 and 1978 mass campaigns became a tool for policy implementation because of China's weak administrative resources.61 During the Great Leap Forward, the party mobilized workers by political incentives rather than mere material incentives.62 In such a political atmosphere, the previous trend of expanding the labor insurance system was restrained. In coverage, the labor insurance system was curbed by initiating the worker-peasant system, and absorbing housewives and other urban laborers into the small-scale street owned enterprises during the Great Leap Forward. The worker-peasants were not eligible to labor insurance, while the workers in the small street owned enterprises barely received any labor insurance benefits. In eligibility and benefit levels, although there were no official changes in the labor insurance regulation, the implementation became much harsher. For instance, some enterprises modified the provisions of labor insurance regulation to reduce the items covered and decrease the level of benefits. In 1958 some existing enterprises simply stopped paying labor insurance benefits, while some new enterprises did not even bother to register for labor insurance. In financing, workers were even required to pay to the system in some places.63 This meant a fundamental departure from the Soviet system, which explicitly required that workers should not pay to the system. In administration, the Party tightened its control over labor insurance in 1958, when the state council issued a decree to put the Trade Union Central accountable to the Minister of Labor for its labor insurance affairs.
In 1960 the Great Leap Forward ended in a great famine in which more than 20 million people died. From 1960 to 1965, the implementation of the labor insurance system was liberalized as an overhaul of the practices during the Great Leap Forward. All kinds of labor insurance benefits were increased. As Dixon put it, "sickness and injury benefits became more generous, disability pensions increased, retirement benefits improved, and maternity leave on full pay was reinstituted. Moreover, preferential treatment was given not only to model workers and combat heroes, as in the 1950s, but also to cadres and other professional people."64 But such increases in the benefits should be understood against the overall policy of cutting back welfare expenditure in the early 1960s. Li Fuchun, a vice premier of the State Council who was responsible for industry, indicated at this time, "As production inches forward, wages and benefits move at a fraction of that."65 This policy continued. As a 1963 editorial in Laodong put it, "for the work on wages and welfare, we should continue the policy that they could only be improved gradually after production and labor productivity has been increased."66
After this short period of recovering, however, labor insurance beginning in the mid-1960s was weakened in the socialist education campaign (1964–1966), in which class struggle was applied to every aspect of labor insurance work to root out feudalism, capitalism and revisionism.67 Consequently, labor insurance work was meant to "take China's own road guided by Mao Zedong's thoughts, and should not follow rigidly the foreign doctrines and foreign models."68 So it was just a natural result that the Soviet-style labor insurance which was criticized as being revisionist was to be destroyed once the Cultural Revolution began in 1966. From 1966 to 1969, there were no government organs to implement the labor insurance, as the General Trade Union and Labor Ministry together with their local agencies were destroyed. Also, the labor insurance funds accumulated in the previous years disappeared during the chaos. In the aftermath of the Cultural Revolution between 1969 and 1976, the labor insurance was only partially restored. In 1969, the Financial Ministry recognized the enterprises' practice of not paying into the labor insurance funds, as they did during the Cultural Revolution.69 As a result, pooling of social risks was abolished and the labor insurance system became a pure enterprise-based welfare system. At least in this sense, the implementation from 1951 to 1976 of the labor insurance system that imitated the Soviet model was a failure.
Conclusion: Social Insurance and Twentieth-century China
This article analyzed China's social insurance in the twentieth century in a global historical perspective. It first discussed social insurance as essential to the modern welfare state which is the most salient feature of the world in the twentieth century. It then pointed out that the study of China remained disconnected to the mainstream debate on the welfare state. Thus, this article went on to propose a global historical perspective to analyze China's labor insurance under high-tide socialism. These analyses laid the basis to explore the significance of the lessons of China's social insurance in enhancing our understanding of China in the twentieth century, and its pedagogical applications as a case study in policy diffusion.
First, it shows the necessity of employing a global historical perspective in studying contemporary China. Throughout the twentieth century, various Chinese governments have either learned from western capitalist models or Soviet socialist models in their state-building processes, of which social insurance was part and parcel. A pure national perspective cannot capture the complete picture. Moreover, when imitating global models, China always faced the risk of not being able to implement the models effectively, due to its poor administrative resources and domestic political manipulations. This explains why the labor insurance system was weakened during the Great Leap Forward and finally broke down during the Cultural Revolution. Labor insurance during the high tide of socialism was only one of the systems that were emulated from the Soviet Union; other institutions, such as the legal and educational systems, experienced the same ups and downs. Even today, the Chinese government is diligently learning from all sorts of global models in building its economic and social institutions. The lessons of labor insurance under the high-tide socialism should serve as an example to consider.
Second, this article reveals the global origins of the complex relationship of cooperation-conflict between the Nationalists and the Communists, the two major political parties reorganized or established in the early 1920s with the help of the Soviet Union. These two parties, under the mentoring of the Soviet Union, formed the first united front in 1924. This cooperation did not last long, however, which ended up with the Nationalists' extermination of the Communists in 1927. But the Communists survived, largely due to the Japanese invasion of China, driven by the global Depression. This led to the establishment of the second united front between the two parties in 1937. After the Sino-Japanese war (1937–1945) stagnated in the early 1940s, the Nationalists began to adopt a planned economy by following the wartime global trend, which had profound legacies on communist China and Taiwan in the post-war era.70 But this legacy did not contradict the fact that the Nationalists established a capitalist social insurance system in Taiwan in 1950, while the Communists adopted a Soviet-style labor insurance the 1951.
Finally, this study contributes to the literature on policy diffusion including the more specific public policy studies in policy transfer.71 Both literatures have predominately focused on western and developed countries (except for Latin Americas), ignoring developing countries, especially China.72 As David Marsh and J. C. Sharmon correctly pointed out that, the literature on policy diffusion stresses structure, policy emulation and quantitative techniques, while the literature on transfer pays more attention to agency, domestic politics, policy learning, qualitative analysis, and whether the transferred policy is effectively implemented; and thus there is a need to integrate the strengths of both literatures while overcoming their shortcomings.73 In addition, both literatures have begun to pay more attention to the role of international organizations in the diffusion and transfer processes,74 while historical analysis in both sets of studies is still rare.75
In this respect, I would like to explore the pedagogical applications of this study, treating China's social insurance as a case in the interactive diffusion of social policy among nation-states, which are in turn embedded in an international system.76 The framework of "interactive diffusion" addressed both structure and agency, mixture of emulation and learning, and implementation of the diffused policy. More importantly, it looked at diffusion over time, that is, the historical evolution of the diffusion of social policy; and it argued that in both learning and emulation, it was domestic forces rather than global models that determined the process. As the present study showed that the origins and evolution of China's social insurance in the twentieth century was embedded in the global historical context of the diffusion of two modes of social insurance around the world since the 1880s. It also revealed that the motive of Chinese policymakers to adopt the Soviet model in 1951 was to be recognized in the socialist world community. Moreover, Chinese domestic policymakers determined the specifics and timing of the adoption, while the Soviet models provided basic ideas and framework throughout the diffusion processes. For instance, Li Lisan certainly learned all the major principles and emulated many of the detailed contents of the Soviet model. However, he also modified system to fit in China's situations, especially China's poor administration ability, low level of economic development, and the difficulties in China's state revenues. Furthermore, the implementation of the Soviet-style labor insurance turned out to be a failure, due to China's domestic political constrains. The periods of Great Leap Forward and the Cultural Revolution, which emphasized the role of politics through mass mobilizations, destroyed the Soviet-style labor insurance system which relied on stable institutions and professionals to survive and sustain.
1 The author wishes to extend her heartfelt thanks to Phyllis Pobst of Arkansas State U., Marc Jason Gilbert (the journal editor), Patrick Manning of U. Pittsburgh, and the reviewers for their insightful comments and detailed corrections on the earlier versions of this article. Also, warmest thanks to Mr. Johan Cauwenbergh and Ms. Xiaolin Yi (officials of European Union) for allowing me to use the EU-China logon and other related pictures.
2 See David Collier and Richard E. Messick, "Prerequisites versus Diffusion: Testing Alternative Explanations of Social Security Adoption," The American Political Science Review 69 (1975), pp.1299–1315; Peter Flora and A. J. Heidenheimer, eds., The Development of Welfare States in Europe and America (New Brunswick, NJ: Transaction, 1981).
3 See Collier and Messick, "Prerequisites versus Diffusion."
4 Aiqun Hu, "Social Insurance in Twentieth-century China: a Global Historical Perspective," PhD Thesis, Northeastern University, p. 147.
5 See Mitchell A. Orenstein, Privatizing Pensions: The Transnational Campaign for Social Security Reform, Princeton, NJ: Princeton University Press, 2008.
6 Aiqun Hu, "The Global Spread of Neo-liberalism and China's Pension Reform since 1978," Journal of World History. (forthcoming).
7 For social insurance programs in a specific country, see United States Social Security Administration, Social Security Programs throughout the World (Washington DC: US Social Security Administration, 2010).
8 Daniel T. Rodgers, Atlantic Crossings: Social Politics in a Progressive Age (Cambridge: Harvard University Press, 1998), p. 216.
9 Gaston V. Rimlinger, Welfare Policy and Industrialization in Europe, America, and Russia (New York: John Wiley & Sons, 1971); Gerhard A. Ritter, Social Welfare in Germany and Britain: Origins and Development (New York: Berg Publishers, 1986), p. 57; Peter A. Kohler and Hans F. Zacher, edited, The Evolution of Social Insurance, 1881–1981: Studies of Germany, France, Great Britain, Austria, and Switzerland (New York: St. Martin's Press, 1982).
10 Rimlinger, Welfare Policy and Industrialization, p. 251.
11 Aiqun Hu and Patrick Manning, "The Global Social Insurance Movement since the 1880s," Journal of Global History (2010), volume 5, issue 1, pp. 125–148.
12 See Flora and Heidenheimer, eds., The Development of Welfare States.
13 H. T. Marshall, Class, Citizenship and Social Development (Garden City, NY: Doubleday, 1964).
14 Quoted in Michael Mann, The Sources of Social Power, Vol.2: The Rise of Classes and Nation States, 1760–1914 (New York: Cambridge University Press, 1986), p. 19.
15 Derek Heater, Citizenship: the Civic Ideal in World History, Politics and Education, third edition (Manchester, UK: Manchester University Press, 2004), p. 272.
16 G. Esping-Andersen, The Three Worlds of Welfare Capitalism (Cambridge: Polity Press, 1990).
17 W. Korpi, "Power, Politics and State Autonomy in the Development of Social Citizenship: Social Rights during Sickness in Eighteen OECD Countries since 1930," America Sociological Review 54 (3, 1989), p.314.
19 See Phillips Cutright, "Political Structure, Economic Development, and National Social Security Programs," The American Journal of Sociology 70 (1965), pp. 537–550; Flora and Heidenheimer, The Development of Welfare States.
20 See Esping-Andersen, Three Worlds; Peter Baldwin, The Politics of Social Solidarity: Class Bases of the European Welfare State, 1875–1975 (New York: Cambridge University Press, 1990); Theda Skocpol, "Bringing the State Back In: Strategies of Analysis in Current Research", in P. B. Evans, et al, eds, Bringing the State Back In (New York: Cambridge University Press, 1985); Theda Skocpol, Protecting Soldiers and Mothers, the Political Origins of Social Policy in the United States (Cambridge, MA: Harvard University Press, 1992).
21 See Dani Rodrik, Has Globalization Gone Too Far? (Washington, D.C.: Institute for International Economics, 1997); Fritz Scharpf, Governing in Europe: Effective and Democratic? (Oxford: Oxford University Press, 1999); Mitchell Orenstein, Privatizing Pensions: The Transnational Campaign for Social Security Reform (Princeton: Princeton University Press, 2008).
22 See Alexander Hicks, Social Democracy and Welfare Capitalism: A Century of Income Security Politics (Ithaca: Cornell University Press, 1999); Julia O'Connor and Gregg Olsen, eds., Power Resources Theory and the Welfare State (Toronto: University of Toronto Press, 1998); and Evelyne Huber and John Stephens, Development and Crisis of the Welfare State: Parties and Politics in Global Markets (Chicago: University of Chicago Press, 2001).
23 See Andrew Abbott and Stanley DeViney, "The Welfare State as Transnational Event: Evidence from Sequences of Policy Adoption," Social Science History 16, No.2 (1992): 245–274; Gregory J. Kasza, One World of Welfare: Japan in Comparative Perspective (Ithaca: Cornell University Press, 2006).
24 See Nita Rudra, Globalization and the Race to the Bottom in Developing Countries: Who Really Gets Hurt? (Cambridge: Cambridge University Press, 2008); Stephan Haggard and Robert Kaufman, Development, Democracy, and Welfare States: Latin America, East Asia, and Eastern Europe (Princeton: Princeton University Press, 2008).
25 Christian Aspalter, Conservative Welfare State Systems in East Asia (New York: Praeger Publishers, 2001), p. 26.
26 Roger Goodman et al, eds., The East Asian Welfare Model: Welfare Orientalism and the State (London: Routledge, 1998); Kasza, One World of Welfare.
27 Elmar Rieger and Stephan Leibfried, Limits to Globalization: Welfare States and World Economy (Cambridge, UK: Polity Press, 2003), p. 243.
28 Ibid., p. 253.
29 See Nelson Chow, Socialist Welfare with Chinese Characteristics: the Reform of the Social Security System in China (Hong Kong: University of Hong Kong, 2000); Ming-Kwan Lee, Chinese Occupational Welfare in Market Transition (London: Macmillan Press, 2000); Tony Saich, Providing Public Goods in Transitional China (New York: Palgrave Macmillan, 2008); and many more recent journal articles.
30 See "Special Section on Social Insurance in China," China Quarterly (2010) vol. 201, pp. 1–57.
31 Andrew G. Walder, Communist Neo-traditionalism: Work and Authority in Chinese Industry (Berkeley: University of California Press, 1984).
32 Xiaobo Lu and Elizabeth J. Perry, eds., Danwei: The Changing Chinese Workplace in Historical and Comparative Perspective (New York: M.E. Sharpe, 1997).
33 John Dixon, The Chinese Welfare System, 1949–1979 (New York: Praeger, 1981); Ehtisham Ahmad and Athar Hussain, "Social Security in China: A Historical Perspective," in Ehtisham Ahmad at el, eds., Social Security in Developing Countries (Oxford: Oxford University Press, 1991).
34 Zongfu Yue and Jiahua Nie, "Guomin Zhengfu Shehui Baozhang Lifa" ("Social Security Legislation under the Nationalist Government"), Shangdong Nongye Daxue Xuebao (The Academic Journal of the Agricultural University of Shangdong), 2004, issue 2.
35 Guangyan Sun and Lingqiu Kong, "Sulianfa dui Harbin Jiefangqum Laodongfugui de yingxiang,"("The Influence of Soviet Labor Laws on the Labor Law of Liberalized Harbin"), Xuexi yu Tansuo (Study and Exploration ) (2009), issue 2.
36 Bin Wong, "Citizenship in Chinese History," in Michael Tilly and Charles Hanagan, eds., Extending Citizenship, Reconfiguring States (New York: Rowman & Littlefield Publisher, 1999).
37 Bin Wong, China Transformed: Historical Change and the Limits of European Experience (Ithaca: Cornell University Press, 1997). For criticism on China Studies in the US, see Paul Cohen, Discovering History in China: American Historical Writing on the Recent Chinese Past (New York: Columbia University Press, 1997). Second Edition.
38 Wong, "Citizenship," p. 97.
39 Ibid., p. 104, pp. 113–114.
40 Janet Yi-chun Chen, "Guilty of Indigence: The Urban Poor in China, 1900–1949," Ph. D Thesis, Yale University, 2005, p. 7.
41 Rodgers, Atlantic Crossings, p. 211.
42 Ibid., p. 209, p. 216.
43 See Flora and Heidenheimer, eds., The Development of Welfare States, and many more works on the post-war welfare state.
44 Chen, "Guilty of Indigence," p. 6; See also Huge Heclo, Modern Politics in Britain and Sweden: From Poor Relief to Income Maintenance (New Haven: Yale University Press, 1974).
45 For further discussion, see Hu, "China's Social Insurance in Twentieth-century China," pp. 58–59.
46 See the EU-China Social Security Co-operation Project, as shown in the pictures attached to this article.
47 This phrase appears in all the official documents on social security reforms.
48 William Kirby, "China's Internationalization in the Early People's Republic: Dreams of a Socialist World Economy," The China Quarterly (2006), p. 880.
49 Guo Jian, "Laodong Baoxian Danshengji" ("The Birth of the Labor Insurance"), Zhongguo Shehui Baozhang (China's Social Security), 2009, issue 10, p. 12.
50 See "Zhonghua Renmin Gongheguo Laodong Baoxian Tiaoli" ("The Labor Insurance Regulation of the People's Republic China"), Zhong guo gongren (Chinese Workers), Vol. 14 (1951), pp.3–6.
51 Li Lisan, "Guanyu zhongguo renmin gongheguo laodong baoxian caoan de jidian shuoming" ("Explanation of Several Points in the Labor Insurance Regulation of the PRC"), Zhongguo gongren (Chinese Workers), Vol. 14 (1951), pp.6–8.
52 Zhu Xuefan, "Xin zhongguo de laodong baoxian" ("New China's Labor Insurance"), in Gongren Ribao (The Worker's Daily), 21 Feb.1951.
53 There is a widely circulated story about how workers welcomed labor insurance enthusiastically upon the issuance of the Labor Insurance Regulation.
54 Li Hua-yu, Mao and the Economic Stalinization of China, 1949–1953 (New York: Rowman &Littlefield Publishers, 2006).
55 Li Xian, "Zai longdong baoxian de shiji gongzuo zhong guanche zongluxian" ("Implement the General Line in the Practical Work of Labor Insurance"), in Laodong (Labor), Vol. 5 (1954), p. 18
56 Guangdong Provincial Archives, Series 231–1–324.
57 Yan Zhongqin, eds., Employees' Wage, Welfare, and Social Insurance in Contemporary China (Beijing: China's Social Science Publisher, 1987), p. 314.
58 Also, in the winter of 1956–57, there was substantial peasant withdrawal from the agricultural cooperatives, which was called "small typhoon." See Frederick Teiwes, "Establishment and Consolidation of the New Regime," in The Cambridge History of China, Vol. 14, p. 140.
59 Elizabeth Perry, "From Native Place to Workplace: Labor Origins and Outcomes of China's Danwei System," in Lu and Perry, Danwei, pp. 48–49.
60 Zhang Yunmei, "Lishun yu chongtu: Zhongguo gonghui yu dang-guojia de guanxi" ("Harmony and Conflicts: The Relationship between the Chinese Trade Union and the Party–State"), in The Twenty-First Century Online, Vol.18, issue 9 (2003), p. 4.
61 Shiping Zheng, Party vs. State in Post-1949 China: the Institutional Dilemma (New York: Cambridge University Press, 1997), p. 154.
62 Editorial, "Zuohao laodong gongzuo, cujin shengchang jianshe, jixu dayaojin" ("Do a Good Job in Labor Work, Promoting Production and Continuing the Great Leap Forward"), Laodong (Labor), issue 1 (1960), pp.1–4.
63 Dixon, Chinese Welfare System, p. 90.
64 Ibid., p. 95.
65 Quoted in Frazier, Making of Chinese Industrial Workplace, p. 215.
66 Editorial, "Strive to implement the general line of national economy," Laodong, issue 1 (1963), p. 4.
67 Guangdong Provincial Archives, Series 231–1–249.
68 Editorial, "Laodong gongzi gongzuo yiding yao tuchu zhengzhi" ("Politics Must be Stressed in Labor and Wage Work"), Laodong (Labor), issue 4 (1966), p. 3.
69 Committee of Guangdong Provincial Zhi, Guangdong Sheng zhi, p. 205.
70 See William C. Kirby, "Continuity and Change in Modern China: Economic Planning on the Mainland and on Taiwan, 1943–1958," The Australian Journal of Chinese Affairs, no. 24 (July 1990), pp. 121–141; Morris L. Bian, "Building the State Structure: Guomingdang Institutional Rationalization during the Sino-Japanese War, 1937–1945," Modern China, Vol. 31, no. 1 (Jan. 2005), pp. 35–71).
71 For the relationship between policy diffusion and policy transfer, see Adam J. Newmark, "An Integrated Approach to Policy Transfer and Diffusion," The Review of Policy Research, vol. 19 (2002), summer, pp. 152–178; David Marsh and J.C. Sharman, "Policy Diffusion and Policy Transfer," Policy Studies, vol. 30, no. 3 (June 2009), pp. 269–288.
72 For the early generation of studies on diffusion, see David Collier and Richard E. Messick, "Prerequisites Versus Diffusion: Testing Alternative Explanations of Social Security Adoption," The American Political Science Review 69 (1975), pp. 1299–1315; Abbott and DeViney, "The Welfare State as Transnational Event. For the renewed interest in diffusion studies since the 1990s, see articles in Annuals of the American Academy of Political Social Science (2005), vol. 598; International Organization Symposium on the diffusions of liberalism, International Organization (2006), vol. 60, issue 4; Kurt Weyland, "Theories of Policy Diffusion: Lessons from Latin American Pension Reform." World Politics (2005), vol. 57, issue 2, pp. 262–295; Beth Simmons, et al, eds., The Global Diffusion of Markets and Democracy (Cambridge: Cambridge University Press, 2008); Kurt Weyland, Bounded Rationality and Policy Diffusion: Social Sector Reform in Latin America (Princeton: Princeton University Press, 2007); Covadonga Mesequer and Fabrizio Gilardi, "What is New in the Study of Policy Diffusion?" Review of International Political Economy (2009), vol. 16, issue 3, pp. 527–543. For studies in policy transfer, see Roger Rose, "Lesson Drawing across Nations," Journal of Public Policy (1991), vol. 11, issue 1, pp. 3–30; Dolowitz D. P. and D. Marsh, "Who Learns What from Whom? A Review of the Policy Transfer Literature," Political Studies (1996), vol. 44, issue 2, pp. 343–357; Dolowitz D. P. and D. Marsh, "Learning from Abroad: The Role of Policy Transfer in Contemporary Policy Making," Governance (2000), vol. 13, issue 1, pp. 5–24; the series of articles on policy transfer in Policy Studies (June 2009), vol. 30, no. 30, pp. 237–311; and David Benson and Andrew Jordan, "What Have We Learned from Policy Transfer Research? Dolowitz and Marsh Revisited," Political Studies Review (2011), vol. 9, pp. 366–378.
73 Marsh and Sharman, "Policy Diffusion and Policy Transfer," p. 270.
74 For studies addressing the role of international organizations in diffusion, see John W. Meyer, John Boli, and George M. Thomas, and Francisco O. Ramirez, "World Society and the Nation-State," American Journal of Sociology (1997), vol. 103, issue 1, pp. 144–181; Rune Ervik, "The Battle of Future Pensions: Global Accounting Tools, International Orgnaizations and Pension Refroms," Global Social Policy (2005), vol. 5(1), pp. 29–54; Orenstein, Privatizing Pensions;Adam McKeown, Melancholy Order: Asian Migration and the Globalization of Borders (New York: Columbia University Press, 2008); and Hu, "Global Spread of Neo-liberalism and China's Pension Reform," (forthcoming).
75 For the pioneering historical studies on diffusion, see Heclo, Modern Politics in Britain and Sweden; Rodgers, Atlantic Crossings.
76 Thereafter, I would only use the general term "diffusion" to refer to both diffusion and transfer. For the framework of interactive diffusion, see Hu and Manning, "Global Social Insurance Movement," pp. 128–129.
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