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This chapter compares the social investment perspective with two other policy perspectives: Keynesianism and neoliberalism. In the last decades of the twentieth century, neoliberals made concerted efforts to roll back existing guarantees to social protection and practices of interest intermediation, in the name of a larger role for the market, families and communities. Then, as neoliberalism reached its limits in the mid-1990s, the ‘social investment perspective’ — particularly investments to help the poor prepare a better future, especially for their children — spread. To map and compare the social investment perspective, the chapter uses the heuristic of the citizenship regime. The popularity of the perspective arises both from the perception that neoliberalism was not working and its characteristic as an inherently ambiguous quasi-concept.

This chapter discusses the interpretation of New Labour of the social investment paradigm, whereby state expenditure is justified in terms of the future returns on invested resources. It talks about the social investment perspective of New Labour in four policy areas, namely: promotion of a culture of savings and investment, child poverty, childcare, and education and skills training. The discussion also points to the areas of contradiction within this perspective in the policies of New Labour.

In recent years the composition of social citizenship rights has undergone significant redesign. This chapter first examines historical traditions that gave rise to the shared ideas about social citizenship and security that shaped many post-1945 citizenship regimes. Beginning in the mid-1990s citizenship regimes in many countries began to rely on the social investment perspective, creating regimes that are future-oriented and focused on children and childhood, albeit often resting on institutions created decades ago to provide social citizenship rights, such as public education and income transfers to families. The chapter presents emerging practices of social citizenship that can be labeled the social investment perspective, using two iconic examples (the UK and Sweden) to illustrate change over time in social citizenship.

One major conclusion drawn from this book is that the welfare reforms under way in Europe cannot be uniformly interpreted as a trend toward a “downgraded” citizenship; the landscape is much more complex. On one hand one can observe a convergent trend on change in the paradigms underlying the postwar welfare state. A new activating social investment agenda is developing all over Europe. Five major principles are reviewed as main constituent of this paradigmatic change: a redefinition of the state’s role as active and preventive; the future as the new horizon for interventions; a rebalanced mix of rights and obligations; a move from the goal of equality to inclusion; and a governance based on a welfare mix. But on the other hand, this convergence in paradigm change gives way to different strategies of dealing with this agenda and of implementing it, with contrasting outcomes on citizenship rights. Finally, the question is raised about the future of welfare and citizenship in the midst of the economic crisis. It is argued that besides the gloomy scenario, where financial orthodoxy is undermining the whole system of social protection, there mat be room for another scenario of a sustainable welfare based on the activating social investment perspective.

In the mid-1990s, the practice of international organizations began to cohere around the social investment perspective, with strategies that were child-centred and advocated human capital investments for economic growth and social development. This chapter examines the World Bank, which endorsed the policy instrument of conditional cash transfers (CCT) to allow very poor families to invest in children’s health and education—a stock-plus-buffer strategy. Then it scans the OECD, which recommended early childhood education to ensure human capital development and the labour-market activation of parents—a stock-plus-flow strategy. Both organizations developed anti-poverty positions with attention to the intergenerational transfer of disadvantage and investments in human capital. This similarity has declined in recent years, as the World Bank incorporated the social investment perspective into its new inclusive growth frame, while the OECD turned its attention to problems of inequality rather than poverty and thereby associated itself less with the social investment perspective.

Chapter 1 introduces the concept and intuitive explanation of entropy law and shows how it plays a unifying role in the sustainability of the processes of development—economic, social, and environmental. It points out that the speed of extraction of resources and their uses in the finite planetary ecosystem have become unsustainable today. This is due to the speed of extraction exceeding the capacity of resource regeneration as well as the absorption of waste generated from the extraction and usage of resources, resulting in a state of increasing disorder. The chapter further points out that the combining of social and environmental sustainability with the process of economic growth would require the development of a social investment perspective for the economy along the lines of welfare statism. Thus it outlines a short history of welfare statism since the days of the Swedish welfare state in the last century in order to understand the changing compulsions of sustainability over time.