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Master ThesisMaster IR/IO Faculty of Arts
Specialization: International Political Economy
Substitute or complement?
The development of CSR during embedding, dis-embedding and
re-embedding liberalism: the political-economic institutions of the
United Kingdom and the Netherlands compared.
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Abstract
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Table of content
Introduction 6
Research question and sub-questions 7
Hypotheses 9
Chapter 1 - Theory, Literature and Definitions 10
1.1 Corporate social responsibility (CSR) 10 1.2 (Comparative) institutional analysis 10 1.3 The complement-or-substitute debate 11 1.4 Ruggie’s notion of embedding, dis-embedding and re-embedding liberalism 12 1.5 Gjølberg’s institutionalist explanatory model 13 1.6 Relevance of the research and country cases 14
Chapter 2 - Embedding: 1945-1970 16
2.1 Introduction 16
2.2 Country studies: the United Kingdom and the Netherlands 17 2.2.1 Gjølberg’s institutions in the United Kingdom: 1945-1970 17 2.2.2 Gjølberg’s institutions in the Netherlands: 1945-1970 24 2.2.3 The United Kingdom and the Netherlands: Gjølberg’s institutions compared 29 2.2.4 Corporate social responsibility (CSR) 31
2.2.4.1 Introduction 31
2.2.4.2 CSR in the United Kingdom: until 1970 31 2.2.4.3 CSR in the Netherlands: until 1970 34 2.2.4.4 The United Kingdom and the Netherlands: CSR compared 36 2.3 Conclusion on CSR during embedding 38
Chapter 3 - Dis-embedding: 1970-1990 40
3.1 Introduction 40
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Chapter 4 - Re-embedding: 1990-present 64
4.1 Introduction 64
4.2 Country studies: the United Kingdom and the Netherlands 65 4.2.1 Gjølberg’s institutions in the United Kingdom: 1990-present 65 4.2.2 Gjølberg’s institutions in the Netherlands: 1990-present 70 4.2.3 The United Kingdom and the Netherlands: Gjølberg’s institutions compared 74 4.2.4 Corporate social responsibility (CSR) 76 4.2.4.1 CSR in the United Kingdom: 1990-present 76 4.2.4.2 CSR in the Netherlands: 1990-present 84 4.2.4.3 The United Kingdom and the Netherlands: CSR compared 93 4.3 Conclusion on CSR during re-embedding 98
Conclusion 100
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Introduction
While writing the introduction to this thesis, I am working as an intern at the Global Sustainable Development department of Heineken International. This department, situated at the Head office in Amsterdam, is responsible for the worldwide implementation of the Heineken Corporate Social Responsibility (CSR) programme called ‘Brewing a Better Future’. Heineken launched this worldwide sustainability programme in 2010. Since then, the company has appointed a CSR coordinator in each of its more than 70 operating companies worldwide. Embedding and integrating sustainability has become one of its global priorities (Heineken corporate website).
Only a few years ago, it would have been unthinkable for a multinational like Heineken to dedicate a separate department to CSR. Today, a lot of companies do. Multinationals such as Heineken, Coca-Cola and Unilever report annually on their progress on CSR. Corporate websites increasingly refer to sustainability as an integral part of business. Needless to say, CSR has become a hot topic. Hence, most companies ‘do CSR’. But what do they do exactly? When reading ten articles on CSR, one is likely to find ten different definitions. Consequently, is it possible for a multinational like Heineken, with operations in over 70 countries, to apply a universal CSR programme to each of its operating companies? Shouldn’t it take into account the local context of its markets? According to this thesis, although it is not focusing on the CSR programme of a specific multinational, it should.
This thesis takes an institutional perspective on CSR. It is inspired by a 2012 special issue of the Socio-Economic Review (a scientific journal) on CSR and institutional theory. This issue tries to move beyond the traditional debate on CSR as voluntary behavior of companies towards examining the political and economic context (or even stronger: determinants) of CSR development. The editors argue that the origin of CSR is linked to the demise of “more institutionalized forms of social solidarity” in Liberal Market Economies1 such as the United States and the United Kingdom (Brammer A, 3). Institutional scholars have placed the development of CSR in the context of the ongoing debate on CSR as an institutional complement (mirror) or as an institutional substitute (e.g. Matten and Moon 2005; Midtun et
1 This classification is based on Hall, P.A., Soskice, D. Varieties of Capitalism. The institutional foundations of
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al. 2006; Gjølberg 2009; Jackson and Apostolakou 2010) (as found in Kinderman, 30). In particular, they have been debating whether CSR is a complement (mirror) or substitute to institutions associated with Ruggie’s ‘embedded liberalism compromise’2 such as the welfare state and trade unions (Kinderman, 30). Both theories link national institutions to differences in CSR (Koos, 136).That is exactly what this thesis will do. More specifically, it will analyze the development of CSR in the United Kingdom and the Netherlands in the context of embedding, dis-embedding and re-embedding liberalism. How did the embedded liberalism compromise take shape in Great Britain and the Netherlands? How has it been challenged since the 1970s? And (how) could it be restored? Ruggie hints at the “dynamic interplay between global civil society and transnational corporations in the domain of corporate social responsibility” as a potential contribution to the re-embedding of liberalism in the context of globalization (Ruggie A, 8). This thesis will analyze the development of CSR during the process of embedding, dis-embedding and re-dis-embedding of liberalism in the context of the complement or substitute debate: is CSR a complement or a substitute to institutions associated with Ruggie’s embedded liberalism compromise? It tries to answer this question for the United Kingdom and the Netherlands because they are situated on different ends of the ‘varieties of capitalism’ spectrum: the United Kingdom has been classified as a Liberal Market Economy and the Netherlands as a Coordinated Market Economy (Kinderman, 51/ Gjөlberg B, 23). In order to do so I have to establish the link between CSR development and the national political-economic institutions that are associated with the embedded liberalism compromise.
Research question and sub-questions
The main question of the research is:
Does the development of CSR during embedding, dis-embedding and re-embedding liberalism in the United Kingdom and the Netherlands indicate complementarity, substitution or both?
2 Ruggie used the concept of embedded liberalism to describe the post-WWII international economic order
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The chapter on embedding will answer the following sub-questions:2.1. How did the embedded liberalism compromise take shape in the United Kingdom and the Netherlands between approximately 1945 and 1970?
2.2. How did CSR develop during this period?
Firstly, this chapter will examine the national political-economic institutions in the United Kingdom and the Netherlands associated with embedded liberalism by using Gjөlberg’s institutionalist explanatory model. Gjөlberg considers three national political-economic institutions that affect the development of CSR: type of economic coordination and welfare state, strength of corporatist traditions and arrangements, and political and civic culture (Gjөlberg B, 609-11). Gjөlberg’s model will be further analyzed in the first chapter. Secondly, this chapter will examine the development of CSR during this period. Did CSR or something that resembles it exist and, if so, in what form?
The chapter on dis-embedding will answer the following sub-questions:
3.1. How did the embedded liberalism compromise in the United Kingdom and the Netherlands fall apart between approximately 1970 and 1990?
3.2. How did CSR develop during this period?
Firstly, this chapter will examine the domestic and international challenges to the embedded liberalism compromise by looking at Gjөlberg’s national political-economic institutions again. Secondly, this chapter will establish the development of CSR during this period. The chapter on re-embedding will answer the following sub-questions:
4.1. How have the United Kingdom and the Netherlands tried to re-embed liberalism from 1990 onwards?
4.2. How did CSR develop during this period?
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The hypotheses of this thesis are:1. National political-economic institutions matter for the development of CSR. Hence, CSR development is path-dependent3.
2. The national political-economic institutions (using Gjөlberg’s classification) of the United Kingdom and the Netherlands have taken shape in different ways during the phases of embedding, dis-embedding and re-embedding. Hence, CSR has developed in different ways.
3. CSR is a substitute for national political-economic institutions associated with the embedded liberalism compromise.
3 Path dependency refers to “a process whereby contingent events or decisions result in the establishment of
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Chapter 1 - Theory, Literature and Definitions
This chapter will establish the theoretical context of the research in order to be able to answer the main-question and sub-questions. It will define CSR, institutional theory, the substitute-or-complement debate, Ruggie’s notion of embedding, dis-embedding and re-embedding liberalism, and Gjølberg’s institutionalist explanatory model. Lastly, it will establish the relevance of the research and the country cases.
1.1 Corporate social responsibility (CSR)
CSR is a contested concept. I will not try to define it because the differences in the development and perception of CSR across nations, in this case the United Kingdom and the Netherlands, are an intrinsic part of the research. One of the most well-known, most general and most encompassing definitions of CSR is Carroll’s pyramid of economic, legal, ethical, and philanthropic responsibilities (Carroll 1979). A large part of the debate on CSR is about its voluntary nature. CSR is often considered to be about responsibilities beyond legal and economic obligations (Sun et al., 5). The contested nature of CSR makes sense from an institutional perspective. Following this perspective, the voluntary or mandatory nature of CSR is not determined discretionally by companies but by the institutional context in which they operate (Brammer A, 21-22). This thesis will examine the political and economic context of CSR development.
1.2 (Comparative) institutional analysis
Institutional analysis is interested in “how the forms, outcomes and dynamics of economic organization (firms, networks, markets) are influenced and shaped by other social institutions and with what consequences for economic growth, innovation, employment and inequality.” Institutions are defined as “formal or informal rules, regulations, norms and understandings that constrain and enable behavior” (Brammer A, 4/Morgan et al., 1-2). Institutional theory therefore has explanatory value for both the specific characteristics of embedding, dis-embedding and re-dis-embedding of liberalism in the United Kingdom and the Netherlands, and for the specific development of CSR in both countries.
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on economic motives (the business case) for CSR (e.g. Orlitzky et al. 2003). It has not paid enough attention to the institutional context of CSR. Only during the past decade, as Kinderman and Koos show, there has been some literature on this context (e.g. Matten and Moon, 2005; Frederick, 2006; Midttun et al., 2006; Carroll, 2008; Gjølberg, 2009).According to the institutional approach to CSR, there are national variations in CSR (e.g. Matten and Moon, 2005; Gjølberg, 2009). These variations can be (partially) explained by institutional differences (e.g. Matten and Moon, 2005; Midtun et al., 2006; Gjølberg, 2009; Jackson and Apostolakou, 2010). Koos argues that economic activities are embedded in national institutions. These national institutions have been classified in different ways such as worlds of welfare (Esping-Andersen 1990) and varieties of capitalism (Hall and Soskice 2001) (as found in Koos, 136). I will classify them according to Gjølberg’s institutionalist explanatory model. This model will be analyzed in paragraph 1.5.
1.3 The substitute-or-complement debate
Institutional scholars have placed the development of CSR in the context of the ongoing debate on CSR as an institutional complement (mirror) or as an institutional substitute to institutions associated with Ruggie’s ‘embedded liberalism compromise’ such as the welfare state and trade unions (Kinderman, 30). Both theories link national institutions to differences in CSR (Koos, 136).
1.3.1 CSR as a substitute
According to the institutional substitute approach, CSR is a substitute for institutions associated with Ruggie’s embedded liberalism compromise such as the welfare state and trade unions. Matten and Moon (2005) and Jackson and Apostolakou (2010) consider CSR to be a substitute for institutionalized solidarity. According to Jackson and Apostolakou, CSR could be interpreted as firms trying to compensate or substitute for a lack of institutional or formal requirements (as found in Kinderman, 31-32). According to Matten and Moon, explicit4 forms of CSR substitute for limited public welfare in Liberal Market Economies (as found in Koos, 136).
4 Explicit CSR refers to corporate policies that explicitly make companies take responsibility towards society. It
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1.3.2 CSR as a complement
According to the institutional complement (mirror) approach, CSR is a complement to institutions associated with Ruggie’s embedded liberalism compromise such as the welfare state and trade unions (Kinderman, 30). Midttun et al. (2006) and Gjølberg (2009) consider CSR to be a complement to institutionalized solidarity. According to Middtun et al. CSR could re-embed the economy in society after years of neoliberalism5 (as found in Kinderman, 31-32). According to Gjølberg, generous welfare systems with strong corporatist arrangements stimulate CSR development (as found in Kinderman, 31-32). She argues that companies operating in an environment with political-economic institutions that stimulate the economy to be socially embedded are more likely to behave in socially responsible ways. Hence, CSR mirrors or complements the institutional environment (Gjølberg B, 605).
1.4 Ruggie’s notion of embedding, dis-embedding and re-embedding liberalism 1.4.1 Embedded liberalism
John Gerard Ruggie’s 1982 paper International regimes, transactions, and change: embedded liberalism in the postwar economic order introduced the concept of embedded liberalism to describe the international economic order after WWII. It was a compromise between extreme liberalism of the late nineteenth century and extreme protectionism of the interwar period (Whelan et al., 374). Capitalist countries strived for the efficiency of markets while upholding social values. The post-WWII international economic order was based on a compromise: society accepted open markets, but national governments had to protect their citizens from some of the associated social costs. Or as Ruggie put it: “Economic liberalization was embedded in social community” (Ruggie B, 231-32).
1.4.2 Dis-embedded liberalism
The process of globalization6 has challenged the embedded liberalism compromise. From the 1970’s onwards, transnational corporations (TNC’s) became increasingly more powerful while governments had difficulty to control them (Whelan et al., 374). On the one hand, economic rights of corporations have increased. On the other hand, rules regarding the environment, human rights and poverty have not (Kell et al., 115). States were no longer able
5 Midtun et al. characterize neoliberalism by liberalization, deregulation and a growing gap between economic
and societal interests (as found in Kinderman, 31-32).
6 Globalization is defined as growing interconnectedness (Ruggie B, 10).
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to mitigate some of the negative welfare consequences of increasingly open markets. Liberalism became dis-embedded.1.4.3 Re-embedded liberalism?
The tension between dis-embedding and re-embedding the market is still going on. It will be difficult to re-embed liberalism on a national basis (Ruggie B, 5). Governance at the international level is not only about states anymore. Ruggie talks about the emergence of a global public domain that consists not only of states but also of actors that are not constrained by territorial borders such as TNC’s (Ruggie B, 28). Ruggie thinks that CSR, which leads to interaction between global civil society and TNC’s, could contribute to the re-embedding of liberalism in the context of globalization (Ruggie A, 7-8).
1.5 Gjølberg’s institutionalist explanatory model
Gjølberg’s institutionalist explanatory model assumes that economic activity and business behavior in particular is still largely influenced or determined by national legal, social and political institutions, even in the age of globalization (Gjølberg A, 7-8). Gjølberg considers three national political-economic institutions that affect the development of CSR: type of economic coordination and welfare state, strength of corporatist traditions and arrangements, and political and civic culture (Gjөlberg B, 609-11).
1.5.1 Type of economic coordination/welfare state
The welfare state is one of the most important institutions of embedded liberalism (Gjølberg B, 609) because it affects business-state-society relations (Gjølberg A, 24). According to Fraser, the welfare state is a system in which the state takes responsibility for the protection of certain vulnerable groups, for the provision of social services and for a (minimum) level of income (Fraser, 1). According to Lowe, the welfare states that were developed in the 1940’s guaranteed some “inalienable core of universal services” (Lowe, 16). One of the most well-known typologies of the welfare state is Esping-Andersen’s7 distinction between liberal, Christian-democratic (corporatist-statist) and social-democratic welfare regimes. Some shared characteristics of these welfare types are free primary and secondary education and social assistance to the poorest. But they differ in labor and employment institutions, the level
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of social security, and formal (public) and informal (private) welfare8 (as found in Scharpf B,7). Esping-Anderson’s typology can be useful for classifying welfare states, but it does not show the evolving nature of public welfare. This thesis will try to capture the evolving nature of the British and Dutch welfare state during three periods of time.
1.5.2 Strength of corporatist traditions/arrangements
Employee- and employer organizations are important institutions of embedded liberalism as well. Tripartite traditions between the state and social partners affect business-state-society relations. According to Gjølberg, strong tripartite arrangements stimulate cooperation and coordination (Gjølberg B, 610-11/ Gjølberg A, 28-30). Scharpf and Schmidt distinguish corporatist, statist and fragmented systems with varying degrees of coordination and state involvement (Scharpf B, 11-14). According to Yerkes, corporatist arrangements and public welfare are interdependent, because they both try to mitigate the social consequences of the commodification of labour (Yerkes, 7). This thesis tries to capture the importance of corporatism in the United Kingdom and the Netherlands from 1945 onwards.
1.5.3 Political/civic culture
Gjølberg’s last national political-economic institution that might affect CSR is rather vague and difficult to define. It refers for example to Almond and Verba’s9 writings on civic culture. Culture, norms and values play an important role in political economy. Gjølberg focuses on traditions of public participation, such as the role of NGO’s, journalism, public debate and civil society (Gjølberg B, 611/ Gjølberg A, 10). I interpret this pillar as being about the role of the voluntary, non-governmental and private sector in society.
1.6 Relevance of the research and country cases
This thesis will establish the development of CSR during the embedding, dis-embedding and re-embedding of liberalism from an institutional perspective. By analyzing two different institutional contexts, it can contribute to the complement-or-substitute debate: the link between CSR development and national political-economic institutions (using Gjølberg’s classification).
8 The distinction between formal and informal welfare will become clear in the country study on the United
Kingdom in the next chapter.
9 Almond, G.A., Verba, S. The civic culture: political attitudes and democracy in five nations. Princeton
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Chapter 2 - Embedding: 1945-1970
2.1 Introduction
This chapter will establish the development of CSR during the embedding of liberalism in the United Kingdom and the Netherlands. How did the embedded liberalism compromise take shape in the United Kingdom and the Netherlands? How did CSR or something that resembles it develop during this period? The first part of the country studies will examine the national political-economic institutions associated with embedded liberalism in the United Kingdom and the Netherlands. This part is structured according to Gjølberg’s national political-economic institutions: type of economic coordination and welfare state, strength of corporatist traditions and arrangements, and political and civic culture (Gjөlberg B, 609-11). The second part of the country studies will examine the development of CSR during the phase of embedding liberalism. Did CSR or something that resembles it exist and in what form? The chapter focuses roughly on the period from 1945 until 1970, because these years have been mostly associated with the embedding liberalism compromise.
Following the extreme protectionism of the 1930’s and the destruction of the world economy during World War II, national economies were booming in the 1950’s and 1960’s. According to Ruggie, this period marked the beginning of an international regime of ‘embedded liberalism’. This meant that (Western) countries were reaping the benefits of capitalism10
while being able to mitigate its negative welfare consequences. Some important characteristics or maybe even preconditions of this regime were capital controls, the Bretton Woods system11 and some trade barriers. These characteristics gave governments the ability to regulate the national economy (Scharpf B, 1). In addition, Keynesian demand management could be used for macroeconomic control and to generate economic growth (Scharpf C, 3). Some important pillars of the embedded liberalism compromise were a commitment to a high level of employment and the provision of public welfare. But countries implemented these pillars in different ways (Scharpf C, 4).
10 Capitalism defined as private ownership of the means of production and creation of economic growth through
the market (Scharpf C, 3).
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2.2 Country studies: the United Kingdom and the Netherlands
2.2.1 Gjølberg’s institutions in the United Kingdom: 1945-1970
2.2.1.1 Type of economic coordination and welfare state
The post-war British welfare state, following the recommendations of the 1942 Beveridge report12, consisted of a public commitment to full employment13 and a social security system
based on universalism, comprehensiveness and adequacy (Lowe, 115/136). It was a system that provided limited public welfare via flat-rate universal contributions and benefits at subsistence level (Fraser, 254-6). Based on Esping-Andersen’s classification, the British welfare state is usually classified as liberal (Lowe, 20). It was put into legislation14 in the 1940’s. Fraser and Lowe especially mark the importance of 5 July 1948 (Fraser, 2). Lowe even calls it the beginning of the British welfare state (Lowe, xi). On this day, the British government took responsibility for insurance, assistance and medical care of its citizens by creating a National Insurance, National Assistance and National Health Service (Fraser, 2/Lowe, xi).
Fraser, Rhodes, Lowe, Mitton and Glennerster all agree on the importance of the 1942 Beveridge report on social insurance for the development of the British welfare state. This report proposed free education for children under 15, a free National Health Service, public housing, a social security system and a public commitment to full employment (Mitton, 478-79). Beveridge developed his ideas on a contributions-based (instead of tax-based) system of social insurance in Germany (Glennerster A, 22). According to Lowe, the report was based on two main principles: a public commitment to full employment and the establishment of a social security system (Lowe, 136). Fraser also emphasizes the importance of public family allowances and comprehensive healthcare (Fraser, 254).
12 The 1942 Beveridge Report was a government white paper on social security (Lowe, 14). William Beveridge
has been called the founder of the British welfare state. According to Beveridge, welfare provision should never discourage private incentives (Rhodes, 23).
13 There is no widely accepted definition of ‘full employment’ (Lowe, 81).
14 1944 Education Act, 1945 Family Allowances Act, 1946 National Health Service Act, 1946 National
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Glennerster summarizes the basic principles of the British welfare state as follows. Firstly, it was characterized by a commitment to full employment (Glennerster A, 5). Beveridge considered full employment to be a necessary precondition for a welfare state because it contributed to individual welfare directly and because it generated economic growth15 (Lowe, 115). Hence, it was the most important assumption of Beveridge’s social insurance system (Glennerster A, 5). Lowe considers this system of compulsory insurance, which was supposed to prevent absolute poverty, to represent a revolutionary shift in values about the role of the British government (Lowe, 136). Secondly, the British welfare state was built on the assumption that the government should provide a national minimum for everyone through the National Assistance Board. This was different from the earlier Poor Law because of its universal character and because it put less of a stigma on people (no means-tested benefits). Thirdly, the British welfare state was to provide equal and free access to health and education. Healthcare and education were now considered to be basic rights of citizenship (Glennerster A, 5-6). Britain was the first country in the world that provided universal free access to healthcare (Fraser, 15). Fourthly, it was the central government that took explicit responsibility for the provision of social services associated with the welfare state (Glennerster A, 7).Rhodes takes a different approach to the British welfare state by distinguishing between formal welfare and informal welfare. The formal institutions, such as the National Health Service16 and National Insurance System17, provided universal access to health care, social
insurance, public housing and education. Informal welfare consisted of employment policy, incomes policy18 and social dialogue (Rhodes, 22-23). He considers the political commitment to full employment (through Keynesian demand management) to be part of this informal welfare (as found in Scharpf B, 7-8). Informal welfare provisions were much more uncertain according to Rhodes because the government was reliant on the cooperation of the social partners. These organizations were not integrated into the British system, as will be further explained in the next section on British corporatist arrangements. Therefore, the government
15 Economic growth generates government revenue to pay for public welfare and it limits demand for it (Lowe,
115).
16 The National Health Service was financed through taxes and provided free health care (Rhodes, 22-23). 17 The National Insurance system provided insurance for things such as unemployment, sickness and old age
(pensions). It was co-funded by employers, employees and government (Rhodes, 22-23).
18 Incomes policy is the controlling of wages in order to control inflation (Fraser, 268).
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had limited control over employers and unions, and hence on informal welfare provision (Rhodes, 23).The specific configuration of the British ‘Beveridgean’ welfare state (limited public welfare based on flat-rate universal contributions and benefits and a public commitment to full employment) has been attributed to specific characteristics of British culture. According to Fraser, the British have traditionally disliked means-tested benefits because it stigmatizes the poor and discourages thrift. Contribution-based benefits at a minimum level would ensure that the system does not hamper personal initiative (Fraser, 254-6). According to Rhodes, the British welfare system reflected a feeling of reluctant collectivism and (in accordance with Fraser) a belief that social security should never discourage private incentive and responsibility (Rhodes, 23). Finally, Lowe argues that the British system reflected feelings of individual freedom (‘freeborn Englishman’), decentralization and an emphasis on the importance of civil society (Lowe, 15-16/20). This last point will be further explained in the section on British civic culture.
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frequently changing government policy with respect to demand management and industrial policy (‘stop-and-go’), because of the underlying ideological conflict on the role of the market versus the state, hampered the potential positive consequences of the public commitment to full employment. Keynesianism could serve as a solution to this conflict because it gave Labour the illusion that the state could intervene if necessary (Lowe, 132). However, as Rhodes argues, Keynesianism was hard to maintain as postwar Britain struggled with contradictions of full employment and wage demands, economic growth and balance of payments and exchange rate stability (Rhodes, 20).Does the fact that many scholars refer to the British system as a Beveridgean welfare state mean that there was some sort of a British consensus on public welfare in the postwar years? According to Fraser, there was. The wartime coalition government’s white papers on public welfare endorsed most of Beveridge’s ideas (Fraser, 260-5). Fraser characterizes the period between 1951 and 1979 as one of welfare consensus (or British new deal19). Britain experienced a period of full employment and economic growth. The welfare state became very much integrated into British society and was supported by both parties. There was a consensus on the social democratic ideas that the institutions associated with the welfare state represented (Fraser, 287-8). Lowe agrees. According to him, the period of 1945-1975 was characterized by a cross-political social democratic consensus on a welfare system based on full employment, minimum levels of public welfare and Keynesian demand management (Fraser, 287/Lowe, 98).
In contrast, Glennerster calls the so-called political and social consensus on the Beveridgean welfare state until the 1970’s a myth. According to him, the postwar years were characterized by a continuous debate on social welfare and the role of the state (Glennerster B, 11-12). The Conservatives were attacking the universal character of the welfare state in the 1950’s already. They succeeded for example in reintroducing means-tested benefits targeted specifically at the poor (Glennerster A, 95). Only from 1959 until 1970, when social welfare spending increased enormously, Glennerster recognizes some sort of bipartisan convergence on the welfare state (Glennerster B, 18-19). Fraser and Lowe do acknowledge some of the
19 This period has also been called the phase of the classic (British) welfare state (Fraser, 287). It is unclear what
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underlying ideological differences of what they call the welfare consensus. Fraser compares it to two parallel trains with a different destination. The Conservatives saw public welfare as a way to achieve the optimal functioning of the market, whereas Labour considered it to be a way to create a more equal society. Hence, the postwar consensus was more practical then ideological (Fraser, 289-90).In short, the British developed a welfare system in the 1940’s that was, in principle, based on values of universalism and comprehensiveness. It has often been classified as a liberal welfare state providing limited public welfare (Lowe, 16-7/20). The welfare system was based on flat-rate universal contributions and benefits at subsistence level (Fraser, 254-6). Britain was the first country in the world that provided universal free access to healthcare (Fraser, 15). The basic principles of the British public welfare were a universal right of access to equal services, the provision of minimum standards (contribution-based and with limited redistributive purposes), and a public commitment to full employment (Glennerster B, 12-15).
2.2.1.2 Strength of corporatist traditions and arrangements
According to Scharpf and Schmidt, the British postwar industrial relations system was fragmented and based on voluntarism (Scharpf B, 11-14). Rhodes argues that the social partners were not integrated into the British (welfare) system (Rhodes, 19). The official government industrial policy consisted of several pillars: legal support for and acceptance of union membership, collective bargaining, and tripartite institutions. However, the implementation of these pillars was hampered in practice by a strong culture of voluntarism. Firms were not embedded in the system and resistant to collective organization. Government initiatives to create institutions for more stable industrial relations and intervention failed due to resistance by industry (Rhodes, 24-5). The public commitment to full employment strengthened the power of unions (43 percent membership in 1950), but increasing demands from strong unions with regards to wages and working conditions were difficult to deal with without a viable incomes and industrial policy and weak employer organizations (Rhodes, 24/26).
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of the British government to pursue effective employment policy, incomes policy and social dialogue. The British have traditionally been wary of state intervention. Therefore, the British welfare state was based on voluntarism and disorganized industrial relations (Rhodes, 19-20). In contrast, Moon characterizes the British postwar corporatist arrangements in a much more positive way. According to him, the relationship between business and government could be described as a “partnership in policymaking” to stimulate economic growth and to regulate the economy where necessary. This partnership was characterized by self-regulation, cooperation and participation. He refers to Beer’s20 description of non-institutionalized cooperation between producers and consumers (Moon, 53). Hence, Moon seems to interpret the voluntary basis of the system much more positively than Rhodes does.Regardless of interpretation, both Rhodes and Moon argue that the postwar corporatist relations affected the embedded liberalism compromise in Britain. According to Rhodes, they limited the functioning of the welfare state; according to Moon, they allowed it to develop in partnership. Whiteside also establishes the importance of corporatist arrangement for the development of the British welfare state. When Labour was in power from 1945-51 corporatist relations were good. The Labour party and the Trade Unions Congress (TUC) shared a belief in universal social welfare. Labour was able to convince the TUC to control wage bargaining21 in return for public welfare measures. In the 1940’s, there was an
unofficial link between public welfare and wage controls (Whiteside, 87-94). But when the Conservatives came to power in 1951, this unofficial link between public welfare and wage controls broke down quickly as they did not share the universal vision of social welfare of Labour and the TUC (Whiteside, 94-99). By the 1960’s, consensus on social policy and industrial relations had become highly unlikely (Whiteside, 99).
2.2.1.3 Political and civic culture
The role of the British voluntary sector in encouraging societal participation has evolved over time. This is also true for the role of the British voluntary sector in social welfare (Finlayson, 401-23). The 1942 Beveridge Report advocated universalist, statutory welfare provision. The 1950’s and 1960’s saw the formal development of the welfare state. The state assumed much of the social welfare provision that had previously been the domain of voluntary
20 Beer, S. Modern British politics. London: Faber & Faber, 1965.
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organizations. Voluntary organizations started to work closely together with the government, thereby losing a great deal of their independence. Finlayson argues that voluntary organization and NGO’s became coopted by government (Finlayson, 401-23).In contrast, Lowe emphasizes the (continued) importance of voluntary provision of welfare-related services. Informal care by family and friends continued to be important after the war and the development of the welfare state. Lowe argues that in the United Kingdom public welfare supplemented rather than replaced informal care. He gives several reasons. Firstly, the British welfare state was not as advanced as some other social democratic welfare states. Secondly, improved public welfare made it possible for people to continue living at home, requiring more informal care in addition to professional public care (Lowe, 284-5).
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2.2.2 Gjølberg’s institutions in the Netherlands: 1945-1970
2.2.2.1 Type of economic coordination and welfare state
According to Van Oorschot, the 1874 law against child labour under 12 could be regarded as the beginning of the Dutch welfare state. In 1901 the first social insurance system, covering work-related injuries, was implemented (Van Oorschot B, 58). But until World War II, only some limited national social security schemes were in place for i.e. old age and sickness. These schemes were company or industry based (hence only applicable to the working population) and the role of the government was limited. The Dutch pre-war social insurance system was not yet based on values of collectivism and redistribution that have often been used to characterize the Dutch welfare state. Benefits were mostly below subsistence level, making a lot of people reliant on the poor law (assistance by the state) and charity and churches (Van Oorschot A, 363). In short, pre-war social insurance was not comprehensive (because only applicable to waged workers) and based on the idea of ‘just wage’ (mandatory insurance contributions as part of wage costs) (Van Oorschot B, 58-59).
Cox, Yerkes and Hemerijck establish that the Dutch welfare state was developed relatively late (in the 1950’s and 1960’s instead of in the 1940’s as for example in the United Kingdom). Yerkes does not explain why, but according to Cox and Hemerijck it was due do the fact that postwar Dutch society was “pillarized” based on religion (Hemerijck B, 188-189/Cox, 169). This had important consequences for the development of the welfare state because each pillar had its own organizations (Hemerijck B, 188-189). Religiously informed corporatist institutions were able to prevent the expansion of the role of the state in welfare provision. This changed towards the end of the 1950’s when they became internally divided and new societal groups gained importance (Cox, 169). The importance of the pillars declined rapidly in the 1960’s, reducing their control over society (Hemerijck B, 188-189). The government was now able to pass a lot of welfare-related legislation22. After that, the
provision of social welfare increased enormously (Cox, 7-8).
Cox gives some additional reasons for the late development of the Dutch welfare state. Firstly, he argues that the development of public welfare provision is in general a response to
22 The 1950 and 1965 Illness Fund Act, 1952 Unemployment Act, 1957 Public Retirement Pensions Act, 1963
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domestic socio-economic developments with respect to for example industrialization and economic growth (Cox, 9). The Netherlands was characterized by late industrialization as it had mostly specialized in trading. Late industrialization meant late development of strong trade unions. In addition, the division between social classes was much less pronounced than in Great Britain (Cox, 96). Hence, domestic socio-economic circumstances in the Netherlands caused less need or pressure for public welfare provisions than in Great Britain. Secondly, the Netherlands lacked a strong state (unlike Great Britain) that could push welfare legislation (Cox, 97). Britain is characterized by a more powerful central government because the first-past-the-post electoral system usually requires no coalition government and hence less compromise (Lowe, 20).So what did the Dutch welfare state, once it was established, look like? According to Cox, the Dutch took a lot of ideas from abroad, especially from Germany and Great Britain. Therefore, its welfare system is a mixture of Bismarckian and Beveridgean ideas. The Dutch borrowed from the Germans the idea of earned entitlements (people with a job are entitled to social security and people without a job are not). After World War II, the idea of universal entitlements was borrowed from Beveridge. These ideas were combined into the concept of universal insurance (workers pay insurance; those who can’t work are covered by the government) (Cox, 203-204). According to van Oorschot, the postwar Dutch welfare system was inspired by the British Beveridge report as well. In 1945, the Van Rhijn Commission paved the way for a system that was based on the idea that the state was responsible for the protection of its citizens against poverty and for the provision of social security, instead of the prewar system that only provided limited protection to citizens with a job (‘just wage’). The postwar welfare state was based on principles of collectivism (through state-control) and solidarity (making contributions based on income instead of risk). These principles formed the basis of public welfare provisions such as ‘peoples insurances’ for i.e. old age and disability, national social assistance, housing benefits and national health insurance (Van Oorschot A, 364).
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universal and comprehensive insurances and benefits (‘people’s insurances’) (Van Oorschot B, 57-58). According to Yerkes, because it is based on a combination of universalism, passive income replacement (of the male breadwinner) and corporatism (Yerkes, 10). Hemerijck has an even more hybrid view. According to him, the Netherlands has been characterized as a continental, Bismarckian, conservative or Christian-democratic welfare state. The postwar welfare state was characterized by insurance-based social protection, co-financed by employers and employees, aimed at income replacement for the male breadwinner and redistributive in nature. Social partners were involved in the organization of the social security system (Hemerijck B, 185-186).Despite these different (hybrid) classifications, scholars like Yerkes, Van Lieshout, Van Oorschot, Hemerijck and Scharpf and Schmidt agree that the Dutch post-WWII welfare system is relatively generous and well-developed. According to Van Lieshout, the Dutch welfare state provides a high level of collectively funded social services at middleclass level (Van Lieshout, 9). Van Oorschot emphasizes the comprehensive nature of the welfare state (Van Oorschot A, 365). According to Scharpf and Schmidt, the Dutch welfare model is characterized by generous institutionalized protection and earnings-related benefits (Scharpf B, 8). The collective and solidaristic nature of the Dutch welfare state was reinforced in the 1960’s when the concept of social protection was broadened from reciprocity to unconditionality and universality in order to guarantee equality (Van Oorschot A, 364). This development corresponded with increasing social expenditures from five percent of GDP In 1950 to twenty percent in 1975 (Van Doorn, 5).
2.2.2.2 Strength of corporatist traditions and arrangements
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Firstly, corporatism has been strongly institutionalized. The corporatist foundations of the Dutch welfare state were laid in the immediate post-WWII years, when the tripartite actors (government, trade unions and employers) were all keen on making the country recover from the war. During this period, corporatism was institutionalized in the Labour Foundation (Stichting van de Arbeid) of 1945 and the Social and Economic Council (Sociaal Economische Raad) of 1950 (Yerkes, 10-11).Secondly, centralized wage bargaining was an important characteristic of Dutch corporatism. Yerkes calls it one of the most important features (Yerkes, 10-11). According to Hemerijck, it is an important part of the postwar Dutch embedded liberalism compromise. From 1945 until 1963, the government set wage guidelines in cooperation with hierarchically organized social partners that had to be followed in collective agreements (strict statutory wage policy). Under the 1970 Wage Act the social partners became responsible for setting wages with the possibility of government intervention. But there was increasing disagreement on wage policy and the role of the government. In theory, a system of centrally coordinated wage bargaining was in place. But in practice, it no longer worked in a context of depillarization and a changing economic environment (Hemerijck B, 209-211). In 1974 minimum wages became indexed to private sector wages. Public sector wages and social security benefits became indirectly indexed. Collective agreements were price indexed. This made wage bargaining a tripartite process again because government expenditures were directly affected by private sector wages. Price and wage indexation became a form of solidarity (Hemerijck B, 212).
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2.2.2.3 Political and civic culture
Hemerijck characterizes the Netherlands in the postwar years as a consociational democracy 23 based on corporatism and political coalitions. Policy-effectiveness in consociational democracies does not only depend on institutional characteristics but also for a large part on the behavior of the political elite and its followers. The Netherlands is externally vulnerable and internally interdependent. This constrains the government in its actions. It is a system of coalition governments, compromises and social partner involvement. Cooperation between the state and social partners is necessary for effective policymaking (Hemerijck B, 190-193).
Postwar Dutch society was ‘pillarized’ based on religion. Based on these pillars, a system of cooperation and compromise emerged (Hemerijck B, 188-189). The Dutch welfare state has been largely built on the basis of private initiative (particulier initiatief). This meant that social provisions were largely organized based on religion. Private initiative, expressed by well-organized and autonomous social blocks, played an important role in the Dutch (welfare) system. The leaders of the pillars exerted power through pillarized organizations and associations (Van Doorn, 6-9). As was already established, the importance of the pillars declined rapidly in the 1960’s.
The public commitment to full employment in the Netherlands was less strong than in the United Kingdom because of the generous institutionalized protection and earnings-related benefits of the Dutch welfare model. In theory, this would mean that there was less need for social welfare by the private sector (Scharpf B, 7-9). Hence, the informal welfare provisions are expected to be less developed than for example in Great Britain. Van Oorschot concurs. Charities and churches, or welfare society institutions as Van Oorschot calls them, are not that important in the Dutch welfare state (at least not after the end of pillarizarion) (Van Oorschot A, 365-6).
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2.2.3 The United Kingdom and the Netherlands: Gjølberg’s institutions compared
When comparing Gjølberg’s institutions in the United Kingdom and the Netherlands from 1945-1970, several things stand out.
Firstly, the British welfare system was inspired by the Bismarckian model but has been translated to the British context into a Beveridgean model. The Dutch welfare system was inspired by both the Bismarckian and the Beveridgean model, but has been translated to the Dutch context and leans more on Bismarckian principles. The British Beveridgean welfare state was based on limited public welfare via flat-rate universal contributions and benefits at subsistence level and a public commitment to full employment. This system has often been described as liberal. The Dutch welfare system is based more on principles of income replacement, redistribution and corporatism. It has been called a Bismarckian or a hybrid system. Scharpf captures the differences between the British and Dutch welfare model well. Social security in the British Beveridgean model came to mean the provision of universal flat-rate benefits; social security in the Dutch Bismarckian model came to mean the provision of income replacement. Social equality in the British model came to mean the provision of equal access to education and health care, but only just enough to prevent poverty without the aim of income redistribution; social equality in the Dutch model came to mean redistribution through social wage policy (Scharpf A, 23). One could also state for reasons of simplification, that the Dutch welfare system is more generous than the British one.
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intervention. Voluntary formal and informal welfare provision continued to play an important role (complement) in the limited British welfare system.31
2.2.4 Corporate social responsibility (CSR)
2.2.4.1 Introduction
The development of CSR during the immediate post-WWII years has not been well documented. Carroll traces formal writings on CSR back to the 1950’s. But earlier forms of corporate responsibility (when defined more broadly as business concern for society) could be traced back to as early as the nineteenth century, especially in the United States (Carroll B, 268). The second part of this chapter describes the development of CSR in the United Kingdom and the Netherlands between 1945 and 1970, but it also relates this development to earlier forms of CSR. Following Carroll, I will try to establish what CSR (could have) meant in the postwar years. Early forms of corporate social responsibility seem to have been associated largely with business philanthropy and paternalism (Carroll A, 3-4). But even though (some) companies were concerned with working conditions and involved in philanthropy in the 1950’s and 1960’s, it was still “more talk than action”. Nevertheless, some early writers on CSR such as Walton24 touched upon the issue of voluntarism and corporate responsibility as actions that might not be measured economically (as found in Carroll A, 8-9). These concerns are still relevant in the contemporary debate on CSR.
2.2.4.2 CSR in the United Kingdom: until 1970
Scholars such as Finlayson, Moon and Marinetto have tried to capture the development of British CSR in the context of changing business-society relations before and after WWII. Finlayson focused on the changing interactions between citizens, state and social welfare (Finlayson, 294-295). Moon focused on public-private sector relations and social regulation (Moon A, 51).
Moon argues that British business-society relations have not been embedded constitutionally or legally. Economic and social transformations in the eighteenth and nineteenth century created some minimal forms of (public) social assistance. Legislation that provided for the separation of ownership and management25 changed the way in which businesses were operated. These changes were also associated with the development of business philanthropy targeted at issues such as poverty and living standards. Philanthropy was informed by religious values and emerging social norms. Corporate philanthropy translated into forms of
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corporate responsibility through paternalism. Companies like Rowntree’s and Cadbury’s provided housing, education and other facilities for their employees. This provision of social services by companies was not only informed by religious or moral motives, but also by an understanding of the importance of loyal employees. These early philanthropic activities by companies such as Rowntree’s were later translated into public social policy. For example, local governments implemented the Rowntree housing standards between 1910 and 1920 (Moon A, 51-53).Finlayson distinguished between a voluntary, commercial, informal and statutory sector in providing social welfare. After WWII the statutory (state) sector became the most important provider of social welfare (Finlayson, 287). But this did not mean that earlier forms of employer paternalism and philanthropy disappeared. The particular configuration of the British welfare state was not to discourage private social provisions by for example corporations. The National Insurance only provided a minimum income. The ‘occupational welfare system’ continued to grow in the 1940’s and 1950’s as a way to ensure employee loyalty. Employers provided insurance and pension schemes, healthcare, social welfare and other social provisions for their employees (Finlayson, 294-295).
Moon and Marinetto establish that the increasing importance of the statutory sector in providing social welfare Britain after WWII changed the nature of business philanthropy. This does not mean that social actions by businessmen became of no importance. According to Moon, British business philanthropy became mainly associated with charities instead of welfare activities with regards to working and living conditions as the government increasingly took responsibility for them. Moon makes a distinction between explicit26 and implicit27 CSR. He describes early postwar Britain as being characterized by implicit forms of social responsibility at best (Moon A, 53). Moon’s distinction between and application of implicit and explicit CSR is unclear to me. Presumably, he means that British companies in the postwar years were not that vocal about CSR activities.
According to Marinetto, business philanthropy became increasingly informed by and intertwined with religious convictions. During the 1940’s and early 1950’s, government and
26 Explicit CSR involves corporate policies that explicitly make companies take responsibility towards society.
It is usually about voluntary action (Matten and Moon, 410).
27 Implicit CSR involves formal and informal institutions such as norms and legislation that make companies
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business representatives together with religious leaders discussed social responsibilities of business in the Christian Frontier Council that had been formed in 1942. The ideas that were discussed in this council are said to have influenced the writings of the British businessman George Goyder28 on the responsible company. Goyder argued in 1961 already that companies should consider the interests of workers, consumers and society by democratizing corporate governance structures. This could be considered as an early appeal for a stakeholder approach to business. However, the influence of the Christian Frontier Council (and of religion in general) on the debate on corporate responsibility diminished rapidly in the second half of the 1950’s. Business became increasingly separated from the church. In addition, corporations became more powerful and corporate structures were changing (because of the separation of ownership and management) (Marinetto, 1-5).During the postwar years, Britain and other Western countries saw the emergence of large, shareholder-owned companies. Ownership and control of capital became separated. Theoretically, this separation should have stimulated managers of corporations, now freed from the sole focus on profits as non-owners, to take interest in broader societal concerns. In practice, however, this was not the case. Family-controlled businesses increasingly made way for the ‘modern corporation’ that was owned by a combination of investors and institutional shareholders. The shareholder-based company as a new form of capitalist ownership legally limited managers of business to engage in corporate responsibility if this was not considered to be economically profitable. At the same time, large (professional) charitable organizations were created during the postwar years. During the 1950’s and 1960’s, British business seemed to interpret corporate responsibility as donating money to these organizations. According to Marinetto, this also suggests that business started to institutionally distinguish their social and commercial activities (Marinetto, 5-8). I think he means that providing social welfare or other forms of (precursors of) CSR were no longer considered to be part of the core business of companies but as a separate activity or an ‘add-on’.
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2.2.4.3 CSR in the Netherlands: until 1970
Sluyterman, Cramer and the SER have tried to place Dutch CSR development in a historical and institutional context. This section tries to capture the development of (early forms of) Dutch CSR until 1970.
According to Sluyterman, ‘Maatschappelijk Verantwoord Ondernemen’ (MVO, the Dutch translation of CSR) developed in the Netherlands in the 1970’s and really took off in the 1990’s. But like Cramer, Sluyterman traces the roots of MVO29 back to as early as the nineteenth century (Sluyterman, 314-315). Just like in the United Kingdom, some Dutch companies started to assume ‘socially responsible entrepreneurship’ (Cramer, 87-88). They provided social services to their employees. This was necessary because social networks had come under pressure from the new factory system. Entrepreneurs such as Stork and Van Marken provided insurance against sickness and injury for their employees. These forms of ‘socially responsible entrepreneurship’ were completely voluntary at the time. Entrepreneurs were inspired by religious and commercial motives. The provision of social services was expected to prevent social and labour unrest, attract capable workers and ensure employee loyalty (SER A, 23-25). Nevertheless, when the Dutch government wanted to improve working conditions by law30, these (socially responsible) entrepreneurs severely objected, as it would undermine the voluntary character of socially responsible entrepreneurship. They joined forces in the first general employer’s association in 1899, but this could not prevent the passing of the Accidents Act (SER A, 24-25).
The end of the nineteenth century also saw the development of the first trade unions in the Netherlands. These unions voiced the social concerns of their members with regard to working conditions and wages. Some of them also provided limited forms of insurance for their members. The unions played an important role in the debate on socially responsible entrepreneurship and the role of government in social services (SER A, 26). The development of socially responsible entrepreneurship and the increasing importance of trade unions led to a public debate on the role of government in providing certain social services (Cramer, 87-88). Hence, both Cramer and the SER emphasize the importance of trade unions in the debate on a responsible private sector and on public welfare provision, whereas Cox (earlier in this
29 Sluyterman defines CSR as voluntary, extra-legal actions by companies (Sluyterman, 314-315).
30 The Dutch government passed the Labour Act of 1874 and the Accidents Act of 1901. The Accidents Act
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thesis) blamed the late development of the Dutch welfare state i.e. on the late development and lack of political influence of the trade unions.According to Sluyterman, WWI led to a closer cooperation between capital, labor and society in the Netherlands. There was a sentiment of the necessity of industry organization in order to mitigate the negative consequences of extreme laissez-faire liberalism. Trade unions became accepted as negotiation partners of industry. The welfare state was not in place yet. Some Dutch companies adopted a progressive business ideology similar to their American counterparts31. Philips, for example, established social funds and employee associations. In addition, the company provided housing for its employees. Anton Philips felt that the separation of management and ownership provided more opportunities for social work. The company even had a social and economic department. The provision of social services to employees was considered to be a (voluntary) benevolent act by employers. However, these forms of ‘industrial welfare work’ were reduced in the economic crisis of the 1930’s. That was when debates on industry organization came to the fore again. For the first time, the government imposed compulsory collective labor agreements (Sluyterman, 319-324).
Companies like Philips continued to provide social welfare to their employees after WWII. Philips stated in 1946 that it wanted to create a long-term welfare policy and as many jobs as possible. It was not uncommon for companies like Philips to organize vacations for their employees and to have a social worker within the company, even though they were not legally obliged to do so. This was also possible because the interests of shareholders were not as important yet (Sluyterman, 324-325). Sluyterman emphasizes the continuity of the views of Dutch companies on their role in society (cooperation with the government and unions in order to stimulate economic growth and create jobs plus welfare schemes for employees) in the interwar period and the immediate post-WWII years. Unlike in the United States, Dutch CSR was not a way to limit the role of the state or a way to defend the capitalist system against the communist threat. Dutch managers saw themselves as public trustees promoting the good of society at large, more than as corporate philanthropists. These views seem to
31 In the United States, discussions on social responsibilities led to a new business ideology in the 1920’s, which
emphasized cooperation between capital, labor and society. This progressive ideology stimulated corporations to provide social welfare to their employees and to let them participate in work councils. Sluyterman quotes Neil Mitchell, who argues that the development of CSR in the United States could be seen as the American counterpart of the development of the European welfare state (so CSR as a substitute for public welfare) (Sluyterman, 322).
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resonate with a stakeholder approach to business. For a lot of Dutch managers, such as P. Kuin from Unilever, the reconstruction of the country by creating economic growth was more important than the mere interests of shareholders (Sluyterman, 324-328).Yet both the SER and Sluyterman argue that the development of the Dutch welfare state after WWII did lead to discussions on corporate responsibility. According to Sluyterman, Dutch corporate responsibility in the early twentieth century had been mainly associated with providing social welfare for employees and with cooperation between capital, labor and society in order to mitigate the negative effects of capitalism. After WWII, these principles were incorporated into the welfare state (Sluyterman, 324). Where did this leave CSR? What should be the role of companies in the welfare state? Dutch company managers had discussed these matters in London during WWII. They concluded that the main role of the corporation was to provide as much employment as possible (sustainable full employment). They envisioned a close cooperation between the government, employers and employees with a focus on economic growth and the creation of the welfare state. But the development of the welfare state did not stop welfare schemes by corporations as was shown with the example of Philips in the previous paragraph (Sluyterman, 324-325). According to the SER, the debate on socially responsible entrepreneurship shifted to broader societal concerns (not just of the company’s own employees) with regard to for example human rights in the 1960’s and 1970’s, now that the government had stepped in as a provider of social services (SER A, 26).
2.2.4.4 The United Kingdom and the Netherlands: CSR compared
When comparing the development of CSR in the United Kingdom and the Netherlands until 1970, several things stand out.
Firstly, early forms of CSR can be traced back to as early as the nineteenth century in both countries. British companies like Rowntree’s and Cadbury’s and Dutch entrepreneurs like Stork and Van Marken then started to provide social services to their employees. These early forms of corporate responsibility mainly consisted of business philanthropic activities aimed at poverty reduction and improving living standards. Religious and economic motives (ensuring employee loyalty) played an important role.
