Insights beyond the Welfare State

and into Post-Capitalism


by Franco Archibugi

Macmillan Press ltd/St. Martin's Press inc 2000

[French edition in progress]



Through an in-depth analysis of the changes in contemporary advanced economies, the crisis facing the Welfare State and the emergence of the ‘third sector’ (non-profit organizations), Franco Archibugi, after an examination of post-capitalism, outlines a new social model called ‘associative economy’. In this economy, named as a whole ‘post-industrial society’, significant changes occur in the structure of consumption preferences, production modes, labour market behaviour and the role played by the state.
The main thesis of the book is that the Welfare State cannot have a sustainable future, given overburdened state budgets, unless it is managed by a strategic planning process that is indispensable to a rational management, and unless accompanied by a process of domestic and international social integration. The book also warns of the possible impact of the structural changes described by the accepted paradigms of conventional economics and, moreover, tries to give a more clearly defined picture of the undetermined post-industrial or post-capitalist society in advanced countries.







CHAPTER 1 - From social protection to social integration: a glance to the major social issues in the advanced countries

1. Social "Protection"  and  Social "Integration"

1.1 Social Protection versus Social Integration?

1.2 The Welfare State and Social Integration

1.3 Social Integration from Industrial to Post-industrial Society

1.4 From the Present Shortcomings to a New Type of Social Integration

2. The Contextual Challenges

2.1 The Relationship between the Active and Non-active Population: a Mystification

2.2 The Impact of the Technological Revolution

2.3 Poverty and Marginalisation

3. The Possible Perspective Issues

3.1 The De-institutionalisation of social roles

3.2 The De-scholarisation and "permanent Education"

3.3 Cutting Down Working Time

3.4 Towards Guaranteed Income

4. Employment and Activities Planning or the Crisis of the Welfare System

5. Summarising the Transition Towards Social Integration

6. Brief Scheme Indicating How the Subject will be Treated, or work  schedule of this book.




CHAPTER 2 - Structural change : a reappraisal of various approaches

1. What is Meant by "Structural Change" in the Contemporary Economy?

2. The Technological Approach

2.1 The historiens of technology

2.2 Technology: is it exogenous or endogenous to the economic progress

3. The Economic Approach

3.1 The internal dynamic of economic progress

3.2 The Schumpeterian objection

3.4 The Rostow's obiection to the theories of the economic development

3.5 The Sylos Labini's answers

3.6 Beyond the economics of technological change

4. The Historical-Institutional Approach

4.1 The Marxian approach

4.2 The Marxian ambiguities

4.3 The "Managerialist" transformation

4,4 Persistent unilateralità of the “Marxist” explanation

5. The Sociological Approach

5.1 Does a sociological approach exist?

5.2 The political factor in Weberian tradition

5.3 The technological roots of planning rationality

5.4 Reevaluation of the politica factor


CHAPTER 3 - Structual change : Towards a Convergence of Various Approaches

1. Convergence

1.1 Convergence as the Historical Synthesis of Change

1.2 A Comprehensive Vision of Social Transformation

2. The Crisis of Traditional Disciplinary Approaches

3. The Qualitative Change

3.1 The Importance of the Qualitative Change

3.2 Value, Quality Evaluation and Social choice

4. The Emergency of a Programmatic Approach to Change


CHAPTER 4 - The change in the structure of  consumption and the "tertiarization" process

1. Growth and Industrialisation as the Development of Mass Production

1.1 The Interaction between Technologies and Final Consumption

1.2 The First Phase of Industrialisation: From Non-Mass Consumption to Mass Consumption

1.3 Industrialisation , Productivity, Development, Redistribution

2. The Most Recent Changes in the Structure of Final Consumer Demand and in the Industrialisation Model

3. The Historical Model of Mass Production and the Policies Implied (Fordism and Keynesism)

3.1 Adaptation of Mass Production to Mass Consumption

3.2 The Discount of Future Productivity

3.3 The Negative Conditions for a Productivity Discount

3.4 The "Margins" of Productivity Increase

4. The "Tertiarization" Process

4.1 The Saturation of Material Goods and Growing Demand for Immaterial Goods

4.2 The Need for Differentiation of Consumption

4.3 "New" Demand and "Development"

4.4 "Over-Industrialisation"

4.5 Toward a New Model of Society


CHAPTER 5 - The changes in the structure of production

1 Visions of the Crisis in Industrial Production

1.1 Various ways of recording the crisis

1.2 The Crisis as "Dependency Effect"

1.3 The Industrial "Diffusion"

1.4 The “theory of Industrial Dualism

1.5 The crisis of mass production and the re-emergence of the craft-paradigm

1.6 Beyond industrial diffusion

1.7 The "decline" of global productivity

1.8 The explosion of the demand for public services

1.9 The Development of the non-mercantile exchange

2 The Productive Dichotomy of the Economy

2.1 The Increasing Dichotomy Between "High Productivity" and "Low  Productivity" Sectors

2.2 The Employment and Income Features of Structural Changes

3 Changes Induced in the Concept of Development, Welfare, and Employment

3.1 The Idea of a "Steady State" Economy

3.2 A Different Way of Conceiving and Measuring "Welfare"

3.3 A Different Way of Conceiving and Measuring "Employment"

3.4 Policy Implications of the New Way to conceive "Employment"


CHAPTER 6 - The Change in the Llabour Market

1. The Basic Divergence between Traditional Labour Supply and Demand

1.1 The Demand for "Quality-Labour"

1.2 The Personalisation of Labour and the New Entrepreneurship

2. The New Behaviour of Labour Supply

3. The Case of Unemployment: Persistence of Inadequate Models of Interpretation

3.1 An optimal level of disaggregation in modelling

3.2 Past and future in modelling unemployment

3.3 Past and future in designing employment policies

4. Toward a New, specific Labour Market Policy


CHAPTER 7 - The Service Society versus the Industrial Society

1. The Substitution of Labour: a Constant Pattern in the Industrial Society Model

2. Human Labour at Zero Productivity in the Service Society Model

3. Economic Implications of the Change of Model

3.1 Performance Indicators

3.2 The Role of "Investment"

3.3 Basic Economic Motivations

3.4 The Motivation and Role of Saving

4. Employment Typology

5. "Industrial Relations" Typology

6. The Role of the State

7. The Emergence of a "Third" Sector


CHAPTER 8 - The Process of Redistribution in the Two Models of Society

1. The Redistribution of Labour and Income

1.1 The Continuous Dislocation of Labour in Industrial Society

1.2 A Misunderstanding about the Usefulness of "non-Productivistic" Sectors

1.3 The Weight of the Two Sectors and the Differential Characteristics of the Distributive Process in the Two Models

1.4 The Characteristics of the Redistributive Process in the Evolution of the Industrial Society Model

1.5 The Role of Inflation in the Redistributive Process of the Industrial Society Model

1.6 The Role of Inflation in the Redistributive Process of the Service  Society Model

1.7 Models of society and theories of capital

2. Differential Characteristics of the Distributive Processes in the Two Models of Society

2.1 Further Analysis of the Transitional Relationship of Productivity-Prices in the Industrial Society Model

2.2 Factors and Circumstances which May Limit the Inflationary Effect of Productivity in the Industrial Society Model

2.3 Inflation and "Unemployment-by-Productivity"


CHAPTER 9 - Expansion and Decline of Public Services

1 An Evolution in the Role and Concept of Public Services

2 The Meaning and the Effect of the Expansion and Decline of Public Services

3 The Crisis Factors and Effects of the Expansion and Decline of Public Services

3.1 The finacial limits of the State

3.2 Lack of Efficiency, Effectiveness and Performances Measure

3.3 Disaffection and Dislike

4 Concluding Remarks: Towards a Reform of the Welfare State





CHAPTER 10 - Beyond the Welfare State

1. "Welfare State" and "Welfare Society"

1.1 A "Logical Analysis" of the Welfare State

1.2 On equilibrium, diseequilibrium, “market” and the organizational society

2. Managing the “ Crisis” of the Welfare State

3. The Appropriate Reorgnization of the Welfare State: Societal Planning


CHAPTER 11 - Beyond Capitalism?

1. Social Democracy, the Politica Left in General, and Planning

2. “Alternatives” to Capitalism? A False Problem

3. Planning as an Essential Condition for the Passage to a "Welfare Society"

3.1 On the so-called “failures” of Planning

3.2 The Fundamental "Operations" of Planning:  Income and Labour Mobility Programming and Management 

3.3 The Plan as a Decision Framework of Reference and as a Process

4. Social Bargaining or Negotiation as a Premise for Planning Efficiency

4.1 The Traditional Planning Operators

4.2 The Motivations of the Social Operators

5. The Crisis of "Entrepreneurship"

5.1 The Crisis of Entrepreneurship as a Motivational Crisis of the Operators

5.2 A New Type of Entrepreneurship: the "private collective"

6. Towards the Institutionalisation of the "Independent" Sector

6.1 The Relationship Between the Operational Sectors of the Economy

6.2 The "Third Sector" and the General Economic System

6.3 The "Third Sector" and the Welfare Society




CHAPTER 12 - A New Social Model: the Associative Economy

1. The Emerging Form of the Third Sector

1.1 The third sector in the USA

1.2 The third Sector in Europe

1.3 A comparativer vision of the Third Sector

2. The Expansion of the Third Sector

2.1 Current Statistics: employment, expenditures, activities

2.2 The Substitution Effect

3. Some Interpretations of the Third Sector

3.1 State failure theories

3.2 Market failure theories

3.3 Non-profit economy and ideology

3.4 “Third party government” hypothesis

3.5 “Functional dilettantism” hypothesis

4. A structural approach; the Third Sectori in the Post-industrial Economy

5. Further Guideline for the Third Sector

5.1 The need for a better operational definition of the third sector

5.2 For a new institutional regulation of the associative economy

6. The financing of the Associative Economy

6.1 Possible forms of public financingof the associative sector

6.2 New forms of “private” and in the same time “collective” financing of the associative sector and its statistical records

7. The role of the Trade Unions in the Management of the Labour Market and of the New Forms of Production and Employment

8. Promotion of the Associative Sector in the Framework of a Comprehensive Plan of Development



CHAPTER 13 -    New policies and instruments

1. New Tasks for the Public Sector

2. The Financial Limits of the State

2.1 General Alternatives to Public Intervention

2.2 New Criteria for Managing Public Intervention

3. The Future of Strategic Planning

3.1 The New "Regulatory" Role of the Public Sector

3.2 Central Planning and Direct Intervention

3.3 Articulated or "Systemic" Planning

4. Planning-Oriented Collective Bargaining

5. Planning-Oriented  Social Accounting

6. Planning and the New Unionism

7. Planning and the Organised Consumer Movement

8. The "Democratic" Meaning of Strategic Planning





[Initial  praise for  “The Associative Economy”, the most recent book by Franco Archibugi published (in English) by Macmillan, London (2000) and (in Italian) by Comunità -Einaudi, Turin:


“In his excellent book, Franco Archibugi explores a question that it is central for the future of our societies - that of social integration. He rightly points to the structural and institutional conditions by which we can garantee the preservation of the Welfare State by way of its transformation into a Welfare Society”.

Jacques Delors,

Past President of the European Union


“A very stimulating book”

Peter Drucker,

Marie Rankin Clarke Professor of Social Science and Management


“Highly original and interesting book…. It breaks entirely new ground…. It raises many issues which all of us must face in the coming decades.”

Christopher Freeman

Director, Science Policy Research Unit
University of Sussex


“…It is interesting indeed that for precise and thoughtful comments on American economic policy one must look to Rome, and more plausibly to Europe as well.”

John K. Galbraith

Harvard University


“Franco Archibugi explains how the "third sector" constitutes a new modality for the regulation of contemporary economies, carrying on new forms of non-inflationary distribution of the productivity gains… His work opens new roads and extends notably the scope about a third sector which finds itself in the core of the economic logics and no longer on its margins”.

Xavier Greffe

Professor of Public Economics
University of Paris I (Pantheon-Sorbonne)


“This is a major endeavour, a valuable contribution to current debates and a fine way to summarize the Author’s considerable contribution over the years”

Patsy Healey

Professor and Director of the Centre for Research in European Urban Environments
Department of Town and Country Planning
University of Newcastle upon Tyne


“I welcome the constructive analysis by Franco Archibugi of the ways in which all the key stakeholders can co-operate in building a sustainable European economy”

David Lea,

Assistant General Secretary of Trade Union Congress


“There is general agreement that both the communist and fascist extremes of the first half of the last century have been pushed aside as possible futures. The ensuing  concern is what should be happening in the middle ground. Within this lies the “third, voluntary sector”. It has support from the liberal economists who wish to see more functions of the State taken over by the market; and from the left who wish to see the State take on more and more as an offset to the market. It is this middle ground which Franco Archibugi has explored with such insight, and relevance, both in terms of understanding what is happening in the real world, and also on the basis of his formidable experience, scholarship and assimilation of literature. What he has to say is relevant to both the on-going but changing market capitalism, and also to what might happen beyond that”.

Nathaniel Lichfield

Professor Emeritus of the Economics and Environmental Planning
University of London

 “Franco Archibugi's "The Associative Economy" elaborates and defends the thesis that a welfare society cannot be developed and sustained without strategic planning involving negotiated trade-offs among alternative allocations of resources. The thesis is certainly true and admirably evaluated in the light of the views of most of the scholars who have had anything important to say about socio-economic well-being. Future writers in this field will find this a mine of good sense, provocative ideas and analyses.”

Alex C. Michalos

College of Arts, Social and Health Sciences
University of Northern British Columbia (Canada)

Editor of “Social Indicators Research, An International and Interdisciplinary Journal for Quality-of-Life Measurement” (Kluwer)


“It was great to read "The Associative Economy". It is an intellectual opus of a mature scholar reflecting on socio-economic and political-economic trends in our society. The term "associative economy" is appealing. It is a great work… It reflects a bright mind and a great intellectual spirit.”

Peter Nijkamp

Professor of Economics

Free University of Amsterdam


“It has become impossible to neglect by now the phenomenon [of the third sector] in the economy of the most advanced countries; and it has become necessary to understand the reasons of its growth, and to explain its impact on the general economic and social structure development. This is extremely well made by Franco Archibugi in his recent book on “The Associative Economy” published by Macmillan.. From this spontaneous development can emerge a very “third “ system of economic and social organization, which can be placed side by side with the other two greatest systems, the State and the Market. We would be facing a “great transformation” of our economies, from a “binary” scheme State-Market, into a “ternary” scheme State-Market-Associative System, where the market would have the motor function of the economic development through the competition, the associative system, that of the social cohesion through the cooperation, and the State, the regulatory function of the whole system, through the programming or planning. This hypothesis, which Archibugi develops in his book, is not a forecast, but a proposal. In order that this proposal - coalesces itself  from  the world of the possibilities (and not of the utopias) into the world of reality, it is necessary that it be assumed as a model by a political force, and pursued as a project for radical reforms”(From: “La Repubblica” 21-04-01).

Giorgio Ruffolo

European MP, former Minister of the Environment
President of the “Centro Europa Ricerche”, Rome


“A fascinating analysis…”

Lester M. Salamon

Director, Institute for Policy Analysis
John Hopkins University


“The Associative Economy” by Franco Archibugi is an innovative book on some of the essential trends of the evolution of economic and social organization in present times. Archibugi’s analysis is original and visionary, and yet, unlike many other comprehensive explanations by historians and social scientists, is firmly grounded in economic literature. Indeed, the book is impressive for its capacity to argue, on the basis of a fascinating review of theories of technical progress and of economic development, the emergence of a  “humanistic” typology of social and economic organization. This will be based on immaterial goods, social commitment and a new balance between the market, the state and the “third” sector”.

Pasquale Lucio Scandizzo,

Professor of Economics
Università di Roma II


 “an impressive and timely book..”

Joseph S.Wholey

School of Policy, Planning, and Development, University of Southern California

Senior Adviser, US General Accounting Office


[From personal letters, on  receiving the book]


“Dear Archibugi, ...I admire your crystal clearness… I spent hours of good reading… I am delighted having met you, even if late, maybe too late…

Norberto Bobbio

Professor of Political Science, University of Turin

Senator of the Republic


“Dear Franco, I was really delighted to hear from you, and... very happy with the excellent and stimulating moments we lived and discussed together. If I may say so, you were always, as I saw and read you, a very refreshing thinker, permanently in search of the future and of societies with more equality and justice. Please keep me informed on your writings. ”

Jorge Sampayo

President of Republic of Portugal