[author]LIU Fang

[content]

The systemic logic of welfare state development

--The welfare state and its crisis in Luhmann's social systems theory

LIU Fang

Postdoctoral Fellow and Assistant Researcher, Institute of Sociology, Chinese Academy of Social Sciences (CASS)

Abstract: This article attempt to articulate Luhmann’s analysis of the  welfare state. The “Composition Logic” in industrialization and the “Inclusion Principle” in the political system have jointly promoted the rise of the welfare state. In modern functional differentiated societies, the welfare state is the performance of the political system and has become the excessive political burden that the politics places on the state. The division within the political system and the dual cycle of political power are the structural causes of the expansion of the welfare state. The progressive concepts in the political system oriented towards basic human rights and morality, and the changing position of the ruling party are the direct impetus for the expansion of the welfare state. Luhmann profoundly reveals that the crisis of the welfare state lies in the tension between the functional differentiation of society and the de-differentiation the political system， and regards self-limitation as a possible solution. Luhmann’s welfare state analysis possesses strong universality, but its explanatory power and criticality towards micro-reality are relatively  weakened. Meanwhile, Luhmann’s discussion bears a profound imprint of Western civilization and lack attention to the development of social security systems in developing countries. Its historically universal applicability also requires further testing.

Welfare state research is now relatively mature, with four interpretative paths, namely functionalist theory, interest/conflict theory, institutionalist theory and cultural theory (Ullrich, 2005), addressing the origins and crises of the welfare state from different perspectives. However, welfare sociology has always faced two difficulties: on the one hand, welfare state research has long adopted a primarily socio-centred perspective (Chen Zhouwang, 2021), with the importance of political factors and the state relatively neglected; on the other hand, existing research tends to assume the state as a "subject" and an "actor"; emphasising state autonomy, state capacity and state structure (Liu Junqiang, 2010). In addition, welfare state research tends to focus on the critique of capitalism and the theory and practice of welfare state building in different geographical areas and at different historical stages, and it is difficult to see ambitious sociological theoretical research with the welfare state as the core issue.

Contemporary German sociologist Niklas Luhmann provides a unique systemic and overarching perspective on the welfare state by explaining its origins, evolution, and crises, centred on "subjectless" systems as well as political and state factors. The welfare state is one of Luhmann's continuing themes. Political Theory in the Welfare State is the primary literature. However, the main goal of the work is not to analyse the rise and fall of the welfare state, but to construct a theory of political systems through the welfare state, so the welfare state discourse is scattered and the theoretical strands need to be re-explored. The welfare state is also a very important theme in The Politics of Society. In addition, related discourses are also found in Luhmann's papers (Luhmann, 1987; Luh⁃mann, 2020). At present, a small amount of related literature has been accumulated both at home and abroad (Poggi, 1985; Chunyan Zhao, 2010; Bachur, 2013; Qiang Li, 2021; Opielka, 2003), advancing the understanding of Luhmann's theory of the welfare state and political systems and their relationship. On this basis, this paper will synthesise Luhmann's welfare state discourses scattered in different literatures, hoping to extract and refine Luhmann's welfare state discourses from the three main lines of social evolution, internal differentiation of the political system, and structural coupling between functional systems, and to explore the logic of the social system in the origins, development, and crisis of the welfare state.

As Luhmann puts it, the attempt is to "generate a theory that distances itself from self-evident everyday life and consciously pursues a continuity guaranteed by a higher level of abstraction" (Luhmann, 1997). Luhmann's social systems theory is not an empirical study of the real world, but a highly abstracted and generalised theoretical construct. Therefore, we need to briefly elaborate on the basic ideas of Luhmann's social systems theory as a basis for understanding Luhmann's welfare state discourse.

Basic Ideas of Social Systems Theory

Luhmann is a systems theorist and radical social constructionist (Berghaus, 2011: 30). In his view, we acquire knowledge about the world through observers/differences, and at the heart of observation is the formation of differences. Luhmann claims that a system is a difference, that is a difference between the system and the environment (Luhmann, 1984). The only operation within a system is communication. While Parsons argues that systems are actions, Luhmann proposes that systems are communication (Luhmann, 2013: 7). When communication exists, systems and societies exist (Luhmann, 2000: 16).

On the basis of Parsons' functional theory, Luhmann put forward the functional structure theory, which mainly includes the following aspects.

Firstly, the function rather than the structure of the system becomes the focus of Luhmann's analysis. Luhmann believes that the system structure is temporarily condensed and the structure itself is always in flux (Luhmann, 2009). Luhmann thus abandons the functions of the system, which are predefined by the Parsons AGIL schema, and instead explores which function can be replaced if a pre-existing function of the system disappears. Thus the focus is no longer on finding out which necessary functions are actually required for the survival of the system, but rather on establishing the equivalence between different functions (Jensen, 2003: 194). This implies a methodological shift for Luhmann from Parsons' survival functionalism to equivalence functionalism (Qin Mingrui, 2016; Tang, 1994).

Secondly, systems are constructed by observers through the difference that is system/environment. The two basic activities of the system are functioning and observation (Berghaus, 2011: 38-44). In observation the difference between system/environment is discovered and characterised and again enters into the operation of the system. Luhmann goes on to develop the notion of 自我指涉/异己指涉Self-referencing/dissimilar referencing（Selbst-/Fremdreferenz） (Berghaus, 2011: 38-44): on the one hand, self-referencing implies that the system is constantly pointing to itself in its functioning, producing its own constituent elements, which is the system's self-production (Autopoiesis); on the other hand, dissimilar referencing implies that the system does not operate in a way that points vacuously to itself, but rather in relation to a constructed object. Thus, the system maintains operational closure due to self-referencingand environmental openness due to  dissimilar referencing, and the system achieves unity between environmental openness and operational closure. Luhmann's notion of open systems allows systems theory to move from the static to the dynamic, and thus to respond more clearly to the social change thesis.

Further, the system is linked to the environment through structural coupling (Strukturelle Kopplungen). The system converts excitations from the environment into inputs to the system in its operation (Luhmann, 2013: 86). The structural coupling between the system and the environment is highly selective and not only reduces the burdens that the system incurs when confronted with a complex environment, but also reinforces (rather than restricts) the system's self-production (Luhmann, 2000: 373-374). Thus, through the two mechanisms of self-production and structural coupling, the system is able not only to maintain its own persistence but also to cope with the highly complex external environment.

Thirdly, based on the system/environment distinction, social systems are constantly differentiated in evolution (ausdifferenzierung), incorporating into system functioning information or perturbations that conform to the system/environmental difference, while others are relegated to the system's environment. For Luhmann, the way modern society is structured is functional differentiation, where functional subsystems are specified on both sides of the Self-referencing/dissimilar referencing spectrum according to specific two-dimensional runes (e.g., true/false, pay/non-pay, legal/illegal, etc.) in order to determine what communication the system needs to deal with and to assign a positive/negative rune value to that communication. For example, a communication is only included in the operation of a scientific system if it involves the judgement true/not true.

By this time, Luhmann, though starting from Parsons, had opened up a whole new field, and functional differentiation became the main form of dealing with complexity in modern society. From the end of the 18th century onwards, the differentiation of social systems began to be dominated by functional differentiation, societies were differentiated into political systems, economic systems, legal systems, scientific systems, religious systems, educational systems, and artistic systems. Each functional subsystem has a unique and exclusive function and transforms communication with very low probability into communication with some probability (Luhmann, 2020) through symbolically generalised communication mediums that keep the system going. For example, power is the communication medium of the political system. At the same time, different functional subsystems process information from the environment via unique two-dimensional symbols (e.g., the economic system's two-dimensional symbol is pay/no pay). In simple terms, this means that "matters in the economic system can only be made through the economy" (Luhmann, 2005: 39). The programme (programm) is the basis of judgement that determines the positive/negative values of the 2D symbolic code; the programme of the economic system is the market, the programme of the legal system is the law, and the programme of the political system is the election. The structural coupling between the functional subsystems is created by the programm pointing to the two-dimensional symbolic code, and the structural coupling is highly selective in order to ensure the autonomous development of the functional system and the construction of complexity (Luhmann, 2000: 382).

For Luhmann, the answer to the question of "social order and how society is possible" is not shaped by stable action orientations and action expectations of actors guided by norms and values, as Parsons suggests, but rather by functional subsystems that function both independently and in dependence on each other (Luhmann, 1987: 106; Qin Mingrui, 2014). 1987: 106; Qin Mingrui, 2014). In addition, unlike Parsons' view of cultural subsystems as the control centre of society, Luhmann stresses that modern society is a "decentralised" society, where there is neither a supreme hierarchy nor a central position, and where no single functional subsystem can represent the whole society (Luhmann, 1990: 32).

To summarise, Luhmann's social systems theory is a unique observation of modern society. Along these theoretical implications, the question we continue to ask is: since action is no longer the basic constituent of the social system, what is the relationship between the individual and the system in the functionally differentiated modern society? This is where Luhmann's account of the welfare state begins.

Social evolution and the origins of the welfare state

In Luhmann's view, the human being consists of a number of independently functioning systems, so that the human being is not the system but the environment of the social system. In this regard, Luhmann's classic statement is: "It is not the person, but only the communication that communicates", when two individuals are communicating face to face, their biological, neurological and psychological systems are not involved in the communication, but only their "speech" is communicating. Thus, Luhmann's social systems theory is anti-subjective philosophy and European humanist tradition (Berghaus, 2011). However, this does not mean that there is no place for human beings in Luhmann's social systems theory; inclusion is one of Luhmann's ways of dealing with the relationship between the individual and the social system, and it is also a fundamental principle in the development of the welfare state.

In the mid-20th century, Marshall interpreted citizenship as the social status held by members of a community, and the equal rights and duties associated with it (Chen Peng, 2008), with incorporation meaning the granting or acquisition of citizenship. Luhmann further develops this concept by suggesting that incorporation is a way for individuals to participate equally in functional subsystems (Luhmann, 1990: 34). Inclusion means that the social system provides and assigns people a position in which we can maintain expectations or, romantically, a position in which we are as comfortable and at ease as we would be in our own home (Luhmann, 2012: 18). Inclusion and exclusion are opposing sets of concepts, and the basic assumption of social systems theory is that individuals will participate in social differentiation and be included in different functional subsystems, rather than excluded (Luhmann, 2012: 18). In real life, it is often easier to notice the presence of exclusion, and when exclusion is present, inclusion is proven in reverse (Luhmann, 2012: 17).

At different historical stages of social differentiation, individuals incorporate different rules. Starting from the two sets of differences, system/environment and equality/inequality, Luhmann suggests that there are three forms of social differentiation: fragmentary, hierarchical and functional. Although modern societies are dominated by functional differentiation, fragmentary and hierarchical differentiation coexist. The first stage of social evolution is fragmentary differentiation in traditional/pre-modern societies, where society is divided into segments, such as families, tribes and villages, based on individual presence (geography). Equality implies self-selection of system construction (Luhmann, 1977: 33), where different subsystems are equal to each other, but the individual is confined to participate in social communication within the fragmented subsystems. Incorporation at this point means becoming a member of one of the fragments of society (Luhmann, 2012: 18). Fragmentary differentiation is one of the simplest and most basic forms of social differentiation.

With increasing size and complexity, societies begin to develop hierarchical divisions. Society is divided into unequal subsystems through the superior/inferior distinction, and there is a supreme hierarchy that is representative of the whole society. The inclusion of individuals in society depends on social location, and each individual knows from birth the social class to which he or she belongs and can only participate in social communication within his or her own class. The moral order fixes the individual firmly in the hierarchy to which he or she belongs (Kneer & Armin, 1998), and an unequal distribution of wealth and power arises. At this stage, society institutionalises the function of politics through incorporative hierarchies and political centralisation outside kinship groups (Luhmann, 2000: 71). At this point, politics is at the centre, the highest hierarchy in society, and political communication is shaped primarily through command/obedience (Luhmann, 2000: 73). However, although communication in society was greatly enriched, it was mainly focussed within the higher classes. The established social order is taken for granted, and communication from lower class subsystems has difficulty reaching the higher classes and can only fight for its own interests in the form of, for example, social movements, peasant uprisings and insurrections, often with little success (Luhmann, 1977: 34).

Towards the end of the 18th century, social evolution gradually shifted to a third stage: functional differentiation, in which different subsystems select the communication they want to deal with around their own specific functions, while ignoring other communication in the environment. For example, the function of the political system is to provide the ability to implement collectively binding decisions, the function of the economic system is to maintain need satisfaction through time, the function of the legal system is to stabilise normative expectations, and the function of the religious system is to explain the mystical (Luhmann, 1977: 35). The functional subsystems are independent of each other, have their own functions and are mutually situational. In contrast to hierarchically differentiated societies, functionally differentiated societies do not have a supreme hierarchy and no single functional subsystem can dominate. Thus, politics is only one of many interdependent functional subsystems that cannot dominate everything (August, 2021: 332).

As society shifted to a predominantly functional differentiation, the realisation of the principle of incorporation in the political system shaped the welfare state (Luhmann, 1990: 35). The shift of society from hierarchical to functional differentiation fundamentally changed the way individuals existed, and the universal rights and freedoms of human beings as equals began to be valued. Everyone was no longer born into a certain hierarchy and could only participate in limited communication. It is a (theoretically) equal society: as long as an individual's life is related to a certain functional subsystem (Luhmann, 1990: 35), there is an equal opportunity to participate in the communication of the functional subsystems, and to establish different couplings with different functional subsystems at different moments (Luhmann, 2012: 20-21). For example, everyone is protected by the law, everyone is educated at school, etc., and is no longer limited by factors such as geography, origin and social status. Incorporation thus implies the encompassing of the functional subsystem for the entire population. In political systems, the realisation of the principle of inclusion is embodied in the welfare state, which aims to reduce or prevent social exclusion through social protection (Luhmann, 2000: 423). The principle of inclusion gives the welfare state a very strong inherent tendency to expand, because the welfare state not only implies guaranteeing a minimum of well-being for each individual, but also the problems surrounding the survival of the individual continue to prop up the boundaries of the welfare state (Luh⁃mann, 1990: 36). The self-driven welfare state is like a horse-drawn carriage travelling on the road of human modernisation, moving forward without stopping. As Luhmann makes clear:

Welfare as a political goal happens to be semantically related to political self-reference. Self-referentiality is a reduplicative formulation, and welfare is a relatively indeterminate principle. The need for welfare is constantly referred to itself, and at the same time forms "welfare". "Welfare has no limits." Welfare has no end; it creates the possibility of a continuous production of itself and takes responsibility for its own problems (Luhmann, 1990: 42).

Thus, the welfare state does not only imply the alleviation and eradication of poverty, but also the general responsibility of the political system for the well-being of the people (Luhmann, 2000: 364). Luhmann emphasises that although the welfare state requires the inclusion of the entire population, exclusion remains a problem even in developed political systems, and the full realisation of inclusion is only an 'illusion' (Luhmann, 2012: 24), i.e. an ideal state. Exclusion not only accumulates at the margins of the system, but also has a cascading effect, i.e. when an individual is excluded from one functional subsystem, it is also more difficult for him or her to participate in the workings of other functional subsystems (Luhmann, 2000: 427). For example, a person in extreme economic poverty may also have difficulty in gaining access to education.

But the question that arises is how does the generation of the welfare state from the principle of incorporation in the political system, a theoretical analysis at an abstract level, connect to the historical reality of the welfare state? According to Luhmann, the principle of compensation is the central logic of the generation of the welfare state. The emergence of the welfare state began as a response to workers' existential situation and struggle for their rights in the process of industrialisation. In describing the existential situation of the British working class after the Industrial Revolution, Engels emphasised that society was destroying the bodies of workers and sending them to their graves prematurely, which was "not mere killing, but murder" (Engels, 1845). The British historian Pike, in his book, also described the miserable, squalid, grimy and miserable life of the British working class as a "forgotten misery" (Pike, 1983). Thus, the welfare state initially emerged as a way of compensating for the negative effects of industrialisation. Compensation was based on 'difference', the need to compensate for the difference between an individual's standard of living and the general situation in society. The development of industrial societies from the nineteenth to the twentieth century not only significantly increased the social risks to which individuals were exposed, but also constantly incentivised the pursuit of a better life, and thus always created more differences to compensate for (Luhmann, 1990: 21-22). The principle of compensation in the development of the welfare state has also shifted from being initially about help to being the basis for individual claims to rights (Luhmann, 2000: 27).

As mentioned earlier, the welfare state began with the logic of compensation in industrialised societies and found its ideal pattern in the principle of incorporation in the political system, and the intertwining of the "logic of compensation" and the "principle of incorporation" constitutes the theoretical logic of the rise of the welfare state. Once the welfare state is established, it naturally carries a strong expansionary drive. So where does the self-reinforcement of the welfare state come from? The relationship between the growth of the welfare state and the fragmentation of the political system is key to providing an answer.

Political system fragmentation and welfare state growth

3.1 The three welfare state propositions

Luhmann puts forward three propositions about the welfare state: first, that the welfare state is political system performance; second, that the welfare state is a form of self-description of the political system in functionally differentiated modern societies; and third, that the welfare state is an excessive burden that politics places on the state. This has led to the development of its distinctive view of the welfare state.

In Luhmann's conceptual edifice, the function of the political system is to provide the capacity to implement collectively binding decisions (Luhmann, 1982), and the performance (performances) of the political system refers to the relationship between the political system and other functional subsystems such as the economic system, the legal system, the religious system, etc., i.e., the impact of the political system on other functional subsystems. Thus, the welfare state is an expression of the performance of the political system, and the principle of incorporation (especially the political participation of citizens since modern times) is the main driving force behind the growth of the performance of the political system (Luhmann, 1990: 76). In political practice, the principle of inclusion is primarily expressed in the concern for the preferences of particular individuals or groups - who deserves a better existence - and centres on the difference between the 'established state' and the 'imagined state' (Luhmann, 1990: 76). "At the centre of this is the difference between the 'established state' and the 'imagined state' (Luhmann, 1990: 77), which should be compensated for or eliminated. At the same time, the political democratic process incorporates public opinion into political communication, and the welfare state performance of the political system accumulates as a result of the contestation of state power by different political parties, which manifests social justice and social progress. Thus, the openness of the political system and its limits become a constant dilemma: the political system sees it as its responsibility to compensate for various misfortunes, while parties and interest groups make various claims for the benefit of the groups they represent, and at the same time do their best to avoid facing public criticism for the rejection of their claims (Luhmann, 2000: 424). The end result is that parties holding different welfare philosophies often end up reaching some kind of compromise and compromise that facilitates the adoption of social welfare programmes. Thus, the self-referentiality of the welfare state and the positive feedback of the welfare state's performance drive the continued growth of the welfare state (Luhmann, 1990: 151). In a nutshell, a deeply embedded relationship has developed between welfare state growth and the performance inflation of the political system.

To elucidate the nature of the welfare state, it is also necessary to return to the concept of the state. From the second half of the 18th century onwards, the dichotomy between state (Staat) and society (Gesellschaft) gradually replaced the traditional ruler/ruled distinction in politics. In Luhmann's view, the state and society are not in opposition to each other (Luhmann, 2000: 16): society is a system that encompasses all the communicative possibilities of human life (Luhmann, 1990: 30), and the 'state' is the object that is always involved in the functioning of the political system. In other words, the political system is one of the functional subsystems of society, and politics is always embedded in and refers to the state. The state is a simplified form of self-description of the political system (Luhmann, 1990: 123; Luhmann, 2000: 338). Although the state cannot encapsulate all communication in the political system, it can be seen as a semantic tool that reduces the complexity of the political system. Luhmann repeatedly emphasises that politics is not equivalent to the state, but rather to the communication that revolves around it. The political significance of all matters is made manifest by their association with the state.

In a historical lineage, the self-description of political systems was initially the absolute state, by the 16th to 18th centuries the constitutional state, and in modern societies the rule of law and the democratic welfare state. Just as eventuality is inherent in modern societies (Luhmann, 2005: 105-106), the welfare state is an unintended political consequence that arises in the evolution of society (Luhmann, 1990: 144). The modern welfare state implies that the political system has a responsibility to safeguard the well-being of all people, and that political decision-makers and political organisations believe that the well-being of the individual is of paramount importance and must be the object of political concern, rather than relying solely on morality, custom, or informal institutional arrangements to achieve it (Kaufmann, 2013). When individual existence becomes a political existence, the threshold of political issues is naturally lowered, all inequalities are transformed into individual needs (Luhmann, 1990: 102), and the welfare state naturally keeps moving forward. Thus, the welfare state is both an orientation of the political system's self-description and evolves within this semantics.

On this basis, Luhmann puts forward a third proposition about the welfare state: the welfare state is an excessive burden imposed by politics on the state (Luhmann, 1990: 144). In a self-description that constantly points to the state, the political system converts individual or group interests into political issues through theorising, solving existing problems and creating new ones (Luhmann, 1990: 39-40). However, over time, the welfare state, as a product of the political system, runs out of resources and means laws and money) that can be used, and the welfare state is like "a swarm of locusts that has run out of glucose and can no longer fly" (Luhmann, 1990: 152). The welfare state is thus in a quandary that not only shatters the prophecy of self-growth, but also its very existence is in a quandary of legitimacy.

3.2 Fragmentation within the political system and the cycle of power

In Luhmann's view, the development of the welfare state is not driven simply by the goodwill of politicians or by the process of political democracy, but by the internal differentiation of the political system (Luhmann, 2000: 216). In modern societies, the political system is divided into three subsystems: political, administrative (legislative and governmental activities) and public. These three subsystems form a double power cycle in the political system, in which neither politics nor the executive has any hierarchical advantage anymore. The positive power cycle operates according to the following logic: politics (subsystem) - makes laws and sets the boundaries and priorities of executive decision-making; the executive - carries out political decisions and constrains executive activity and public behaviour in accordance with political decisions; the public - follows government decisions and periodically elects a new government. At the same time, a reverse political cycle is created: the executive - drafts bills and dominates the functioning of the parliament and its related bodies; the political - relying on party organisations - advises the public on how they should vote and explains the reasons behind it. political - based on party organisations - advising the public on how to vote and why; and the public - actively participating in political decision-making in various ways and exerting their own influence. In this double cycle, the public becomes the (technical) controller and balancer between administration and politics: they do not only passively receive political decisions, but also actively participate in the political theatre. Not only can the public constrain the functioning of the political subsystem through the administrative subsystem, but they can also support preselection programmes and political candidates, becoming claimants and promoters of political interests (August, 2021: 335). The informal power that arises in this reverse cycle usually exists and is carried out in micro forms. It is the operation of these micro-powers that dissolves the supreme ruling power of the political system in hierarchical societies (Luhmann, 2009: 167-168).

The political reverse cycle becomes the political basis for the expansion of the welfare state (Luhmann, 1990: 49). With the internal polarisation of the political system, the welfare state always tries to translate more themes and interests into political issues (Luhmann, 1990: 50). Since politicians and their parties need the consent and approval of the people to be able to govern, they must emphasise the well-being and common good of the people; the public also constantly tries to incorporate its own interests into political communication; the administrative subsystem always tends to increase governmental interventions in the face of the public's demands, and political decisions that try to reduce or lower the level of social welfare for the citizens tend to meet with varying degrees of resistance. In the reverse cycle of politics, the public gains power over the administration and modern democracies need to continually improve their ability to meet the welfare needs of the population, thus leading to the growth of the welfare state and the deepening of bureaucratisation in the political system (Luhmann, 1990: 148). Since the reasons for the establishment of the welfare state have always been irrefutable and appreciated, the political system has also had to cope with real pressures from the welfare state (Luhmann, 1990: 24).

3.3 Dynamics of growth in the welfare state

The determining factor in the circulation of power within a political system is the operational value of the two-dimensional rune code of ruling party/opposition (power/no power), from which the deep-seated dynamics of the growth of the Western welfare state derives. Luhmann suggests that the emergence of the opposition party is the greatest achievement of modern social development and the core of Western democracy (Luh⁃mann, 1990: 167), and that democracy is embedded in the inter-conversion of ruling/opposition parties. The ruling/opposition party presents an asymmetrical relationship: a government dominated by the ruling party dominates, and the opposition party is always ready to offer alternative possibilities for political functioning (Luhmann, 1990: 177). In the next periodic election, the ruling party may also become the opposition party, and the opposition party may gain power. Periodic political elections expose politics to an uncertain future. The two-dimensional symbolic code of ruling party/opposition is also key to the differentiation of the political system into a separate functional subsystem. The emergence of this two-dimensional symbolic code deprives the political system of its centrality (Luhmann, 2000: 100).

It is because the opposition party may become the ruling party that the political system can consistently reconcile the polarisation of opinion and conflicting interests in society and make and implement collectively binding decisions (Luhmann, 2000: 132; Luh⁃mann, 2000: 95-96). Classical political theory sees politics as having the function of integrating society, but Luhmann argues that we need to reconceptualise the importance of political conflict. In democracies that politicise a wide range of interests, where every decision is made in favour of some interests against others, or in favour of some values against others (Luhmann, 2000: 141), political conflict is universal and has become a central concern of political operations and public opinion. However, because of the power-shifting symbol of ruling party/opposition, both the ruling party and the opposition have to show their sincerity in resolving conflicts in order to gain as much public understanding and support as possible. Public opinion is a mirror of the functioning of the political system (Luhmann, 1990: 179), and the results of periodic political elections are one of the most important indicators of public opinion (Luhmann, 2000: 283), and the key for both ruling and opposition parties to gain public attention and to gain public favours and votes. Over time, the public can consistently identify new welfare needs, and democratic processes and party competition mean that more and more needs are identified and transformed into political demands (Luhmann, 2000: 139). The welfare state thus finds strong support in public opinion (Luhmann, 2000: 426).

The result is that public opinion always tends to form issues with good intentions without taking into account the difficulties of political implementation, so that there is a classic rupture between the political process and public opinion (Luhmann, 2000: 318). In welfare issues, morality is always on the side of needs, which in turn trigger new political communication (Luhmann, 2000: 139) and possible welfare expansion. Not only that, but political responsibility means narrowing down choices and absorbing uncertainty (Luhmann, 2000: 433), but also the necessity to choose between political action and taking no action at all (Luhmann, 1990: 104). In modern risk societies, individually relevant themes of social welfare are very easily politicised. The principle of compensation makes it possible to generate a welfare-political issue when there is a discrepancy between an individual's 'entitlement to welfare' and his or her 'real welfare', whereby individual risks are transformed into political risks. This means that the future survival of the individual can be traced back to decisions made at a certain point in time, as was the case in the 1990s, when the Social Democratic Party of Germany was criticised for failing to push through a bill on long-term care insurance during its coalition term.

When social issues become political issues, political decision-making is not only a symptom of a government's ability to govern and its legitimacy, but also a way for the public to observe whether the government in power can achieve good governance. In democratic politics, political parties or coalitions of political parties must put forward welfare policy programmes that are unique and different from those of other political parties or coalitions of political parties. Special programmes or policies - especially those accompanied by controversy - are often accompanied by political risks, and political parties or political coalitions must defend their positions and respond to criticisms of their political views in order to gain public understanding and support. When a political party opposes a new social welfare policy, it also constantly tries to justify its opposition, either by adopting a more subtle form of opposition at a critical point in the democratic election, or by simply abandoning its original political claims, in order to avoid the possible negative impact of public opinion. Public opinion on social welfare policies will be directly reflected in the next democratic election, triggering a shift in the ruling/opposition party's position. It is in the face of a fluctuating future, where one election is followed by the next, and where each party seeks to be as successful as possible in political elections, that the traditional left/right schema of politics is dissolved, and there is a de-ideologisation and convergence of political parties with different values on welfare issues (Luhmann, 2000: 430). "Welfare rigidity" has its roots in this. In a nutshell, the operation of the ruling/opposition two-dimensional code in the political system enhances political risk and leads to the welfare state's "astonishingly expansive competences" and becomes "a huge and uncontrollable risk-boosting device" (Luhmann, 2020). .

Here we can identify two features of Luhmann's welfare state discourse: firstly, Luhmann uses the concept of the welfare state in a broader sense, which arises from the process of industrialisation and implies that the political system considers the well-being of the population as its own responsibility; and secondly, Luhmann focuses on European (or, more precisely, Western European) political institutions. He makes it clear that "allowing the existence of opposition parties is not a rule but an exception" (Luhmann, 1990: 167) and that only a few people in the world live in exceptional democratic political systems where opposition parties exist. It is only in very exceptional circumstances that political systems include the entire population in political communication, and that is when democracy emerges (Luhmann, 2000: 97). Thus, the special form of democratic political institutions and highly differentiated political systems in Western Europe are the basis for Luhmann's analysis of the interaction between politics and welfare and the soil in which Luhmann's ideal welfare state grows.

Inter-system structural coupling and the welfare state crisis

Luhmann re-examined the welfare state with an extremely cold and rational vision. In his view, the crisis of the welfare state is embedded in the mechanisms that generate it, and the welfare state always contains its own antithesis, whose contradictions and decay are inevitable (Luhmann, 1990: 68). Luhmann points out that we may overestimate the welfare state crisis if we believe that the existing social welfare system has reached the limits of the welfare state; however, we may underestimate the welfare state crisis if we attribute the problems of the welfare state to a temporary recession and lack of financial resources (Luhmann, 1987: 105). The structural crisis of the welfare state is hidden in the self-operation of the political system and in its structural coupling with other functional subsystems.

4.1 The legal system and the welfare state

The development of the welfare state is not only about the political system, but is also closely related to the relationship between the political system and the legal system. In modern societies, the function of the legal system is to stabilise normative expectations. The constitution is the mechanism of structural coupling between the political system and the legal system, whereby we can observe both law and politics from a political perspective (Luhmann, 2000: 391). In the development of the welfare state, the guarantee of basic rights for citizens gradually becomes a general value dimension (Luhmann, 2019: 410), and these value dimensions also become political and legal norms. When conflicts of welfare values arise in political decision-making, the Constitutional Court is increasingly inclined to influence the functioning of political power through legal means, arguing that "the fate of the innocent must be remedied and balanced by the community", thus contributing to the expansion of the welfare state. At this point the welfare state is supported by the legal system as a "popular political product" (Luhmann, 2019: 410).

The "rule of law State" is the quintessential schema for the relationship between the legal and political systems. The rule of law is not only the legal setting and presentation of the State, but also a mechanism for assuming political responsibility for the law. The political system needs to fulfil the responsibility of implementing the law and promoting its development and change in order to ensure that the law can adapt to social change and meet political requirements (Luhmann, 2019: 357). This also means "imposing legal constraints on political power and making law a politically usable instrument" (Luhmann, 2019: 363). Constraints from the legal system can effectively limit political power and prevent politics from pursuing fleeting emotions (Luhmann, 2019: 358), but at the same time the political system can find ways to use the law as a tool to achieve political goals (Luhmann, 2000: 392). As a result, the legal system greatly expands the scope of application and the space for action of political power (Luhmann, 1990: 194). In the welfare state, when faced with new risks and situations, the political system can adapt existing laws or create new ones to provide individuals with more legal security in order to cope with the increasing complexity of modern society. When making decisions, the political system also needs to rely on existing laws to determine whether certain social welfare claims should be supported, and when political decisions are made, they need to be clarified in legal provisions to determine the legitimacy of the social welfare system. In some cases, political decisions may be resisted on legal grounds, especially when they involve cuts in social welfare programmes or reductions in the level of social welfare. In the "rule of law" paradigm, the welfare state moves forward under the safeguards of the legal system.

4.2 Economic systems and the welfare state

The economic system provides the welfare state with the capacity to pay and ensures that the welfare state has sufficient financial resources. The functioning of the economic system revolves around the social construction of "scarcity", i.e. "scarcity" is constantly being overcome and reproduced within the economic system. Money/pecuniary is both the medium of communication of the economic system and the mechanism by which the economic system can be differentiated from society (Luhmann, 1994). The two-dimensional symbol code of payment/non-payment is responsible for encoding communication in the economic system. Financing and taxation of the public budget are two ways in which the political and economic systems produce a structural coupling (Luhmann, 2000: 385387). The formulation of a social welfare policy implies corresponding expenditures. Over time, the means of public intervention in the political system become clearer and richer, and the criteria for paying for something, a situation or a risk become clearer. In this process, the "scarcity" of the social welfare system is overcome and new "welfare scarcities" are reproduced. In this way, the expansion of the welfare state makes the use of money seem to have no boundaries, and the ever-increasing social welfare expenditures place ever-higher demands on the capacity of the economic system to pay, leading to a crisis of the sustainability of the welfare state. Moreover, the welfare system - as an expression of the political system's intervention in the functioning of the economic system - is easily blamed when the economic system itself is in crisis.

4.3 Causes of the welfare state crisis

Luhmann emphasises that the original goal of the welfare state was to improve the working conditions of workers, but the failure of the welfare state has always been attributed to the failure of cooperation between different subjects of interest rather than to the ineffectiveness of pecuniary and legal means in achieving the goals of the welfare state. It is this attribution that has set aside the question of the limits of the political functioning of the welfare state, which has always been one of the developmental goals of the political system (Luhmann, 1990: 81-85). Specifically, the political system lacks reasonable limits on the use of money and law, and money and law lack self-regulatory mechanisms. On the one hand, the political system tends to ignore the limitations inherent in the political instruments - law and money - when making policy choices, blurring the political, economic and legal systems by dabbling in, and attempting to control, the functioning of the legal and economic system functional boundaries between them, and ultimately also weakens the realisation of the functional differentiation of the political system and threatens the possibility of the political system to provide a unified opinion (Luhmann, 1990: 101). On the other hand, the use of money and law lacks clear rules of termination: there is always a good basis for creating new legal norms, and there is always a good reason to pay more money (Luhmann, 2020: 341). In addition, the presence of laws and money enhances the sensitivity of individuals to changes in welfare (Luhmann, 1987: 345), and even small changes in welfare can be the cause of political movements. Even when the political system justifies welfare cuts, they may still meet with strong resistance. The delayed retirement reform in France, which caused a massive wave of popular strikes and protests, illustrates this point well. Any restriction on social welfare is tantamount to abandoning the goal or sacrificing rationality (Luhmann, 2020: 344), and it is difficult for the welfare state to develop self-restraint. It is the political system's neglect of endogenous restrictions on the use of law and money, as well as its overestimation of its own ability to control society, that has led to the 'growth catastrophe' of Western social welfare systems (August, 2021: 344).

Further, the political system is constantly shaping and implementing collectively bounded welfare decisions without realising that it may be crossing the functional boundaries of the economic and legal systems. The welfare state has become increasingly expensive in the economic system, fuelling inflation and having a destructive effect on the welfare state itself. In the legal system, the existence of the welfare state has also led to the gradual penetration of law into all spheres of life (Luhmann, 1990: 84) and has increased the tendency towards individualism in modern societies. As the French thinker Edgar Morin put it, the welfare state guarantees individuals' rights while depriving them of personal responsibility in key areas of life, and individual life is confined to a polymorphic network that resembles both a cocoon and a cage (Morin, 2021). At the same time, a plethora of legal regulations overburden the executive branch, which also faces difficulties in implementing policy decisions. When the political system is unable to implement decisions effectively in other functional systems, it can only cope through increasing bureaucratisation (August, 2021: 342).

The crisis of the welfare state thus stems from the tension between the "de-differentiating" tendencies of the political system and the functional differentiation of society. The political system constantly identifies particular interests as common interests, constructs new mandates, makes electoral promises, and promotes welfare expansion with the consequences of de-differentiation (Entdifferenzierung) (Demirovic, 2003). However, the political system both becomes autonomous within society and remains embedded in it, unable to exist apart from it. In functionally differentiated societies, the political system can only process information through the function of "providing the ability to implement collectively binding decisions". However, the political system still often operates in an attempt to control other functional subsystems in society, and the seizure of political power seems to be the key to controlling the economic and legal systems. When this phenomenon occurs, it implies an antagonistic force between political practices and a functionally differentiated society, i.e. the phenomenon of 'de-differentiation' in modern societies (Jahraus, 2012: 350). As Luhmann argues, one cannot expect politics to occupy a non-existent central position (August, 2021: 332) and then control the development of everything in society.

The continued growth of the welfare state requires the political system to act as a "control centre" to ensure that the other functional subsystems continue to provide the performance required by the political system, but the existence of such a control centre is only a "utopian" fantasy. The result is that the failure of the welfare state is often predicted, but the idea and system of the welfare state never disappears. However, the crisis of the welfare state can only be responded to and solved by the political system, thus reproducing the crisis of the welfare state. The political system is obliged to maintain the welfare state through austerity and reform (and to avoid, as far as possible, the opposition to welfare cuts), but with the next political election, the welfare state is likely to expand again, driven by social circumstances. In this way the tide rises and falls, and the tide rises again, as the welfare state grows on itself and becomes more and more consuming of the performance of other functional subsystems, the welfare state moves forward dynamically, continuously, and paradoxically, under both the forces of expansion and its limitations. While the welfare state gains momentum for growth in its political evolution, it also harbours the seeds of crisis, as if it were "treating in the hospital the diseases contracted in the hospital" (Luhmann, 2000: 426).

In a broader sense, in functionally differentiated societies, not only may there be "market failures" but also "state failures", and we may also find failures in functional subsystems such as science, education, economics, religion and law ( Luhmann, 1990: 58). It is precisely because no functional system is able to act as a "centre of control" that failures can be found everywhere, and the tragic fate of the welfare state is unavoidable.

4.4 Possible ways out

Luhmann emphasises that the crisis of the welfare state stems not only from the structural dilemmas of political functioning, but also from the crisis of traditional ways of thinking (Luhmann, 1987: 105). The vicious circle of the welfare state is closely linked to the traditional conservative/progressivist way of thinking in Europe. This way of thinking has allowed the values of protecting human rights to permeate the functioning of the political system and has fuelled the expansion of the welfare state. However, the tendency to moralise political issues has led to an overloading of the political system and a loss of sensitivity to the environment (August，2021: 343). The political system creates the 'illusion' that laws and money are unlimited and that the welfare state can expand indefinitely. Luhmann emphasises that the key to solving the problem lies not in abolishing the fundamental values of the constitution, but in replacing the dynamics of growth in the political system. As Luhmann graphically puts it: "The welfare state is like a water tower from which funds are extracted and distributed to anyone in need", and if we wish to improve this situation, it can only be achieved through the self-limitation of the political system (Luhmann, 2000: 424). -The political system must recognise its own limitations, see the boundaries of its possibilities in a functionally differentiated and interdependent society, and accept the constraints imposed by the boundaries of possibility (August, 2021: 346-347). This implies a rejection of dogmatism based on values and rationality, and requires politics to reassess means and limits in each specific context, forming a 'situational politics' (August, 2021: 348-349). In situational politics, each political thesis is continually reassessed and the consequences of political decisions are continually observed. We need to recognise that there is no ultimate or permanently valid solution due to the ever-changing context.

Concluding remarks

In terms of methodology, Luhmann's theoretical construction is also characterised by the Weberian conceptual approach of "the real and the imaginary" (Li Rongshan, 2022), i.e., his analytical concepts are abstract conceptual constructions, which are, however, not imaginary, but closely related to concrete history and real experience. Luhmann's in-depth analysis of the ways in which the welfare state emerges and evolves in society through social systems theory re-emphasises the crucial role of political factors in the development of the welfare state. Luhmann's theory of the welfare state can be summarised in the following propositions:

First, the welfare state originated in industrialised societies as a means of compensating for the existential situation of workers. The principle of compensation and the principle of political inclusion were the original driving forces behind the development of the welfare state. The continuous inclusion of welfare issues in the political system and the self-production of the welfare state created the appearance of "unlimited welfare", which led to a strong inherent tendency for the welfare state to expand.

Secondly, the welfare state is a manifestation of the performance of the political system and an excessive burden that the political system places on the State. The internal polarisation of the political system and the double cycle of political power are the structural causes of the expansion of the welfare state. At the same time, the notion of progress in the political system, which is directed towards basic human rights and morality, forms the socio-conceptual impetus for the growth of the welfare state in the operation of the two-dimensional rune code of ruling party/opposition party. The welfare state is both a reality created and an illusion portrayed by the political system (Luhmann, 1981: 147).

Thirdly, the tragedy of the welfare state is rooted in the inability of the political system that generates it to act as a control centre to manipulate other functional sub-systems, figuratively speaking "the welfare state is the equivalent of trying to inflate a cow in order to get more milk" (Luhmann, 2000: 215). Karl Polanyi's theory of the 'double movement' suggests that the economy cannot be de-embedded from society (Polanyi, 2017). Luhmann goes further and states that all functional subsystems are embedded in society and cannot exist outside of it. Thus, the fact that politics cannot be de-embedded in society, together with the tendency of the political system to try to control other functional subsystems, forms the root cause of the permanent crisis of the welfare state.

Fourthly, the key to resolving the crisis of the welfare State lies in the self-reflection and self-limitation of the political system. We need to be aware of the potential limitations that exist in the political system and to reassess the objectives of the welfare State and the means available to it in various contexts.

Although Habermas, Orphey and Luhmann start from different theoretical approaches, they come to a similar conclusion that modern (capitalist/functionally differentiated) societies cannot be separated from the welfare state (Habermas, 2000; Orphey, 2011). In contrast, instead of starting from the capitalist mode of production and economic system, Luhmann presents the origins, growth and crisis of the welfare state in terms of social evolution and political functioning. This theoretical approach enhances the universality of Luhmann's welfare state discourse; both capitalist and socialist societies are undergoing a process of functional social differentiation (Luhmann, 1990: 45), and although they are developing along different trajectories and institutional directions, social welfare systems are evolving and improving. However, Luhmann's theoretical analysis is also somewhat 'utopian' in the sense that he depicts an ideal form of the welfare state in the abstract. In fact, not only is it impossible to determine the extent to which the functional differentiation of society has been realised, but class order and inequality in the Western welfare state have not been given the same attention. Moreover, it is due to his pursuit of theoretical abstraction and universalisation that the welfare state is seen as something generative in the aggregate, with the richness and complexity of its concrete history buried by theory, making it difficult to explain in any depth the complex logic and mechanism of the operation of welfare politics at a certain stage or in a certain country. As a result, compared with the critique of the welfare state from the perspective of capitalism, the explanatory power and criticality of Luhmann's discourse on the welfare state in terms of micro-reality has also weakened.

In addition, we need to look at Luhmann's welfare state analysis dialectically from the following three perspectives. Firstly, Luhmann's social systems theory "sees the system but not the person", i.e. everything is determined by the system. Due to the lack of consideration of "subject" and "action" and their relationship, the evolution of the welfare state is seen as a subjectless process. However, the welfare state is the result of a combination of social interest groups, including the working class, fighting for their rights and interests, and the political system acting on its own initiative, both of which are indispensable. Secondly, according to Luhmann's analysis, the growth of the welfare state is intrinsically driven by democratic politics, for which he mainly refers to Western European democratic political systems. However, this kind of analysis takes the kind of democratic system that exists only in a few places in the world as an ideal direction of modern development, with obvious "Eurocentric" colours, and pays insufficient attention to the experience of developing countries in the construction of social welfare systems. In China's century-long history of social policy development, the main body of political action, with the CPC at its core, has always adhered to the people-centred concept of development, adjusting and improving the social welfare system according to the economic and social conditions at different stages of historical development, in order to sustainably safeguard and improve people's livelihoods (Guan, Xinping, 2022), and to guarantee the people's rights to survival and development, thus providing the world with a new institutional programme.

Finally, Luhmann's interpretation of the crisis of the welfare state reveals the inability of the political system to continue to act as a centre of control over the functioning of the economic and legal systems in modern society. This interpretation is universal in character. Although the concept of the 'welfare state' is highly contested and criticised, if the welfare state is defined in terms of 'the general responsibility of the political system for the well-being of the people in the territory of the respective state' (Luhmann, 2000: 364), then the relationship between social security and the welfare state is strongly intertwined. welfare state have strong connotations. In improving the social security system, we need to recognise the limited nature of the political system in providing social well-being, but also pay attention to the structural coupling between the political system and the legal and economic systems. We need to consider both the political constraints and normative expectations imposed by the legal system, as well as the affordability of the economic system and the impact of the social security system on the economic system. The development of our social security system should provide fuller social protection for as wide a range of the population as possible without going beyond the current historical stage, and should avoid a repetition of the systemic crises and inequalities of the Western welfare states.

However, with the development of neoliberalism in the 1990s and the emergence of late modern societies, the world of labour has changed profoundly: job precarity has increased, technological control has increased, and the human condition has become more precarious, while popular political participation has declined and the legitimacy of the welfare state has been eroded (Honneth, 2023). Therefore, it remains open to further discussion how exactly the universal historical adaptation of Luhmann's welfare state discourse should be viewed, and whether it is able to explain the new changes in the labour world and the welfare state.