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Digitalization, immigration and the welfare state

One may be grateful, seeing a title as the one of the books for review, that finally it is about something that can well be perceived as a crossroads for the future, defined by: digitization as one of the main new hopes, and equally a major variable of insecurity; migration is seen by many as a major threat; and the welfare state as known centre and channel, allowing taming rough sea.

It is noteworthy that Blix begins – after a general introduction – by looking at the welfare state and some general challenges it faces, namely ‘rising inequality and job polarization’, ‘legitimacy of high taxes and the risk that tax bases will become eroded’, ‘higher risks for outsiders and less easy access to social security’, ‘adopt collective bargaining to accommodate job creation for low-skilled workers at lower wages’ (p. 7), and in a following chapter at labour market issues. The underlying interpretation of the welfare state deserves special attention: it is seen as a more or less, at least structurally, static pattern of provisions, historically assessed as a system that has been established and developed as a safety net. However, Blix's approach remains a-historical as it does not reflect the fact that the welfare state, irresolvably going together with the Keynesian national welfare state, is a constellation that is undermining its own parameters. This concerns, on the one hand, the economic conditions that cause a systemic pressure on the welfare state: increasing demand goes hand in hand with decreasing resources. Subsequently, digitization and migration appear in the presentation as somewhat foreign, as external factors for which a proper solution cannot be found. So critique and the attempt to find a way forward remain caught in the attempt to find an answer without clearly defining the question; the widely known debates on ‘people becoming too old’, receiving sick pay for too long (p. 31), the problems of GDP-development and employment-rates and the like – of course not presented in such harsh terms – are adding to the many presentations of a similar kind. Interesting though is the more or less detailed insight into some ‘Swedish issues’ – be it figures on GDP and employment or be it single regulations that played a role in the overall development, e.g. the issue of opening hours of shops.

The next chapter then provides an eclectic picture of issues around digitization. The thesis that is behind the presentation of this chapter is that ‘[d]igitalization is akin to a rejuvenation of arteries and capillaries of the economy’ (p. 66). The thesis is as interesting as it is contested. In particular, for this reason it is lamentable that the material Blix refers to is compiled and reflected in a way that allows affirmation, without sound reflection of other arguments. At this stage, when it comes to digitization, it is not really enlightening to make another time reference to Brynjolfsson and McAfee and the like, juggling with figures that lack fundamental criteria of statistics, namely neutrality, objectivity and scientific independence. In general, while interesting points are made, not least those that are frequently overlooked such as for instance taxation issues, there is no systematic analysis given. Moreover, anybody who knows some basic issues about the area will see that the material is gathered to support arguments that justify a questionable ‘inner seclusion’ of the welfare state. So it is not really surprising that a chapter on ‘Fiscal pressures from digitalization and immigration’ is coming before the chapter on ‘Immigration, inequality and skills in the digital economy’ and the concluding one on the ‘Future Challenges for the Welfare State’. The outlined perspectives are as clear as they can be, taken the given background: some wishful thinking for a return to the old model, some awareness of the fact that there is no return, and some diffuse proposals that are based on the acknowledgement of changes, while not making systematically reference to their structural character. This, then, ends in the orientation towards a return to a downgraded old welfare state. Indeed, one may say that liberalism and neo-liberalism meet in the minimalist responsibility of the state: liberalism based on the insight that some tasks remain central for societal development, neo-liberalism not being able to deny the extreme negativities of letting-go-policies.

After reading the book in its entirety one may see it as a good example of the shortcomings of digitization and debates of this topic: Blix, as any digitalised system itself, works with data that are easily available, linking them with a predefined framework and executing research by combination. Within such a framework we find some ‘iterative process of affirmation’: conservative-liberal economics always finds data in support of its arguments, and data mining always allows further development of such theory. Or taking it from the world of one of the biggest digi-diggers, Amazon, one may look at their policy as guiding: tell us what you read and we will tell you what you should read next. This is the reason why so much of the debate on digitization in general and in challenging linkages – the claimed topic of the book – is barely moving on in making the needed large step.

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