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Showing papers in "International Journal of Social Economics in 1993"


Journal ArticleDOI
TL;DR: The link between Buddhism and economics can be found in Buddhist ethics; the resulting economics is both scientific, in the modern American sense, and normative as discussed by the authors, and its principles may have universal application.
Abstract: Political and social economists are interested in understanding a connection between Buddhism and economics. The link can be found in Buddhist ethics; the resulting economics is both scientific, in the modern American sense, and normative. Buddhist economics may be regarded as syncretic and its principles may have universal application.

46 citations


Journal ArticleDOI
TL;DR: In this article, the dramatic post-war slide of church membership in Scotland from a socio-economic perspective is examined from a sociological perspective, and the decline in the stock of church members is accounted for in terms of the ebbing of the former.
Abstract: Examines the dramatic post‐war slide of church membership in Scotland from a socio‐economic perspective. Analysis of membership inflows and outflows reveals that the decline in the stock of church members is accounted for in terms of the ebbing of the former. Describes and tests eclectic theoretical hypotheses, invoked to explain this observation, using simple aggregate annual time‐series data. Draws conclusions with respect to the significant economic and social factors which determine church attendance in Scotland. Anticipates increasing disinvolvement in Scottish institutional religion.

27 citations


Journal ArticleDOI
TL;DR: In this article, the authors examine the problems of the country's disintegration in its socioeconomic, political and territorialadministrative aspects, and find an internal logic in the high-speed events taking place in the former Soviet Union.
Abstract: Attempts to discover an internal logic in the high‐speed events taking place in the former Soviet Union. In addressing the problems of the country′s disintegration, examines the issue in its socioeconomic, political and territorial‐administrative aspects. Analyses, for this purpose, the nature of Soviet society prior to Gorbachev′s reforms, its present transitional stage and its probable direction in the near future.

24 citations


Journal ArticleDOI
TL;DR: This article examined the differences between the actions that Turkish and American students would take when they were confronted with conflict and found that the nature of the conflict situation is important in examining conflict resolution styles across cultures.
Abstract: Examines the differences between the actions that Turkish and American students would take when they were confronted with conflict. Students received two cases describing an organizational setting. They were asked to place themselves in the situation of a member in conflict with a peer in the work environment. Cases were content‐analysed by the researchers. Indicates that the nature of the conflict situation is important in examining conflict resolution styles across cultures.

14 citations


Journal ArticleDOI
TL;DR: The authors argues that the collapse of socialism in the former Soviet Union and its subsequent collapse resulted from a complex interaction of both internal and external factors, and that the systemic transformation is significantly impeded by the hysteretic memory of the old system and its functioning, conditioning Western assistance to the reform process by the demands for rapid convergence to the path of resolute marketization.
Abstract: Argues that the collapse of socialism in the former Soviet Union as well as the collapse of that state resulted from a complex interaction of both internal and external factors. Internally the systemic transformation is significantly impeded by the hysteretic memory of the old system and its functioning. External pressures influence the pace and the scope of this transformation, conditioning Western assistance to the reform process by the demands for rapid convergence to the path of the resolute marketization. The evolution of the internal and external circumstances has brought about the current crisis in the former Soviet Union and raised the critical question of tactical and strategic goals.

13 citations


Journal ArticleDOI
TL;DR: In this article, the observed distribution in incomes in countries such as the Federal Republic of Germany (West and East), Great Britain, Sweden, United States and Brazil could not be the result of a statistical distribution process in which households participated.
Abstract: Points out that differences in the background of the working population, are often made responsible for the observed inequality of income distribution. Explores whether the observed distribution in incomes in countries such as the Federal Republic of Germany (West and East), Great Britain, Sweden, the United States and Brazil could not be the result of a statistical distribution process in which households participate. Recalls the early work in statistical thermodynamics by Boltzmann and Maxwell, who studied the distribution of energy among an ensemble of identical molecules, and which showed that not all molecules hold the same energy, but rather that the distribution has an exponential fall‐off character, with most molecules being in the lower energy bracket. Adapts the Maxwell‐Boltzmann distribution to incomes, and transforms these distributions into well‐known Lorenz graphs, and obtains a perfect match for each examined country. Suggests that, as the distributions can be directly related to their corr...

12 citations


Journal ArticleDOI
TL;DR: The authors discusses six specific areas of dissent: consumer behaviour; the firm; income distribution; welfare economics; market failure and government, and public choice. But they focus on consumer behavior, not the firm's behavior.
Abstract: While Christian social principles harmonize with certain premisses of microeconomic theory, private property and freedom of behaviour for instance, deep‐rooted differences call for recasting certain foundations and pieces of analysis. Broad dissent concerns positive versus normative approach, the holistic character of Christian thought, and the latter′s view of human behaviour as flawed and often sinful. Discusses six more specific areas of dissent: consumer behaviour; the firm; income distribution; welfare economics; market failure and government, and public choice. The Christian mind requires revision of conventional treatments, since present microeconomic discussion is subversive of a religious interpretation of life.

9 citations


Journal ArticleDOI
TL;DR: In this paper, a new view on indices taxes on business and transfer payments makes it obligatory to include them in GNP and NI in a new way, which is shown in the macroeconomic indices of USA.
Abstract: As is recognized, indirect business taxes are the unearned income of the Government. Shows that the fifth factor of production is the economic ability of Government; indirect taxes on business are corresponding factorial income, which is transferred into Government profit. Shows also that transfer payments create special social goods – egalitarian goods, defined as social tranquillity, reached by overcoming poverty and by income inequality reduction. Creating one of the kind of social goods, transfer payments assume a productive character. The new view on indices taxes on business and transfer payments makes it obligatory to include them in GNP and NI in a new way, which is shown in the macroeconomic indices of the USA.

8 citations


Journal ArticleDOI
TL;DR: This paper examined post-Rogernomics New Zealand in light of the potential dysfunctions identified by Adam Smith and found that the father of capitalism himself proves to be the most trenchant critic of the current order.
Abstract: The ideology of the New Right draws many of its foundational concepts from the work of Adam Smith. This appropriation and vulgarization of Smith′s work constitutes a major injustice to this seminally important theorist. In particular, the moral underpinnings of Smith′s project are often ignored, as are his insights on the potential dysfunctions and pathologies a capitalist society might foster. Most critiques of capitalism are launched from a Marxian‐based perspective. Finds, however, that by examining post‐Rogernomics New Zealand in light of the potential dysfunctions identified by Smith, the father of capitalism himself proves to be the most trenchant critic of the current order.

8 citations


Journal ArticleDOI
TL;DR: In this article, the authors discuss social choice formation in the Islamic institutional framework, which involves the technical formalization of the institutions of consultative decision making and knowledge formation in these institutions: processes which are respectively called the Shura and Ijtehad.
Abstract: Discusses social choice formation in the Islamic institutional framework. This involves the technical formalization of the institutions of consultative decision making and knowledge formation in these institutions: processes which are respectively called the Shura and Ijtehad. Knowledge generated in the form of decision rules is transmitted to the socio‐economic order in accordance with the tenets of Shariah. Herein, knowledge‐function is shown to undergo an interactive and discursive form of revision, changes or affirmation. Shows that knowledge‐function interactions formulate the Shuratic process, an essential characteristic of which is treatment of ethics and morals relating to specific issues at hand in the midst of the polity‐market interactions. Examines mathematically several stability and equilibrium conditions of the social welfare function established on the basis of the Shuraticprocess. The problem of social consensus formation against social conflict resolution is taken up in the same interact...

8 citations


Journal ArticleDOI
TL;DR: The authors examines the social process of "environmental economic engineering" focused on sustainability of production and gives attention to the role of technology in this process, expressing sustainability criteria in the magnitudes time preference, depletion of natural stocks, population growth, and technical progress.
Abstract: After looking at the physiocratic idea of production, examines the social process of “environmental economic engineering”, focused on sustainability of production. Gives attention to the role of technology in this process. Expresses sustainability criteria in the magnitudes time preference, depletion of natural stocks, population growth, and technical progress. It appears that technical progress must offset the other magnitudes mentioned.

Journal ArticleDOI
TL;DR: This paper argued that a Soviet type of "shock therapy" is not likely to take place in China since a gradual economic reform has already improved the overall economic conditions, and argued that for further economic development, however, the Chinese communists must recognize two basic facts: (1) Chinese communism has already fulfilled its historical mission by expelling foreign imperialism and domestic feudalism; (2) Marxism and Leninism are of foreign origin.
Abstract: A Soviet type of “shock therapy” is not likely to take place in China since a gradual economic reform has already improved the overall economic conditions. Argues that, for further economic development, however, the Chinese communists must recognize two basic facts: (1) Chinese communism has already fulfilled its historical mission by expelling foreign imperialism and domestic feudalism; (2) Marxism and Leninism are of foreign origin. This recognition is able to pave the way for a final adoption of the Taiwanese model of economic development, which is based on the ideas developed by Sun Yat‐Sen, who had never stopped to insist that modernization should not abandon the Chinese tradition, especially Confucianism.

Journal ArticleDOI
TL;DR: In this paper, the authors propose a more gradual, four-stage economic integration model for Korea, which was divided in 1945, and propose that economic reforms should take place in North Korea since the North Korean economy has been afflicted with too many difficult problems, mainly caused by a rigid, centrally-planned, command economy.
Abstract: Aims to find an appropriate economic model for the reunification question. Perhaps the most important economic issue is what model is to be applied in integrating the two Koreas into a single, viable and eventually highly‐competitive economy. Because of the dissimilarities between the German and Korean economies, and the enormous economic problems created by the swift German reunification, the instant‐reunification German model was rejected. Instead, proposes a more gradual, four‐stage economic integration model for Korea, which was divided in 1945. For a successful economic integration of the two countries, economic reforms should take place in North Korea since the North Korean economy has been afflicted with too many difficult problems, mainly caused by a rigid, centrally‐planned, command economy.

Journal ArticleDOI
TL;DR: The authors compares the ethics dictated by neoclassical production theory with the Christian production values found in Pope John Paul II's encyclical, Laborem Exercens, and concludes that neoclassic production theory is necessary, but not sufficient.
Abstract: Addresses the question: “Are Christian values reflected in contemporary American economic ethics?” Compares the ethics dictated by neoclassical production theory with the Christian production values found in Pope John Paul II′s encyclical, Laborem Exercens . The encyclical rejects the notion that output is the primary goal of production. The implication is that neoclassical production theory is necessary, but not sufficient. Public policy in the United States has long been based on neoclassical production theory. In the last decade, the downsizing and restructuring of production has heightened emphasis on neoclassical production efficiencies. During this period, prevailing economic ethics were largely in conflict with Christian values. The fledgling policy initiatives of the Clinton administration suggest a commitment to reshape policy in ways which more positively incorporate a number of the reforms suggested by Laborem Exercens. If a new economic (production) ethic evolves out of these commitments, the ...

Journal ArticleDOI
TL;DR: In this article, the authors discuss the communist system, based on an elite Party and the privileged nomenklatura which executes its orders, and the result is a moral vacuum, a spiritual and physical decline of the citizenry who, unfamiliar with self-responsibility and freedom, feel threatened by c...
Abstract: Discusses the communist system, based on an elite Party and the privileged nomenklatura which executes its orders. An ubiquitous secret police, whose tentacles reach into the most private spheres of the citizens, kills any opposition in its bud. The people are constantly indoctrinated with Marxist‐Leninist ideology which also justifies the total power of the Party. The ideals of egalitarianism and open‐ended social obligation, inculcated from early childhood on, led to “apathy, indifference, and the disdain of honest work” (Shmelev) as well as widespread dishonesty. The population was kept ignorant by hermetically sealed borders and subjected to constant humiliation. Advancement depended not on hard work, but on Party loyalty. Laws served only a decorative function. The mafia has flourished under these conditions, once clandestinely, now for all to see. The result is a moral vacuum, a spiritual and physical decline of the citizenry who, unfamiliar with self‐responsibility and freedom, feel threatened by c...

Journal ArticleDOI
Robert F. Rizzo1
TL;DR: The health care crisis in the United States has roots that reach into the nineteenth century as mentioned in this paper, and an examination of the cultural, social, and economic roots should warn against piecemeal and short-range measures to correct a fragmented system which, despite all its achievements, is draining the economy while it fails to meet the needs of millions.
Abstract: The health care crisis in the United States has roots that reach into the nineteenth century. An examination of the cultural, social, and economic roots should warn against piecemeal and short‐range measures to correct a fragmented system which, despite all its achievements, is draining the economy while it fails to meet the needs of millions. Unlike the Western European experience, it began as a loosely organized and loosely co‐ordinated system, responding as it grew to the forces of change: research from Europe, technological advances, corporate interests, the need for a healthier labour force, and the economic stimuli of the marketplace. Throughout the centuries, the delivery of medical care was seen in the terms of the buying and selling of a commodity. Professional and corporate groups are interested in keeping it essentially as it is by emphasizing its accomplishments and predicting setbacks of all kinds if drastic change is made. Argues that if the reformers in and out of government do not recogniz...

Journal ArticleDOI
TL;DR: This article argued that individualism, with a proper understanding of human nature, supports community life that is voluntarily chosen; such communities have greater solidarity than those established by coercion, and argued that an individualist analysis gives strong support to the values of community life; indeed, stronger support than communitarianism because individual rights are very powerful legal trumps on such environmentally destructive acts as dumping, rationing, and otherwise merely blunting the injuries of pollution.
Abstract: Disputes the view of the communitarians, a recently emerged group of political theorists that individualism, especially the theory of natural individual rights, stands as an obstacle to desirable community life for human beings. Argues that the only objection of individualism to communitarianism rests on the communitarian endorsement of coercion and violation of individual rights; in point of fact, individualism, with a proper understanding of human nature, supports community life that is voluntarily chosen; such communities have greater solidarity than those established by coercion. Uses the topic of environmentalism, which might offer strong support for coercive communitarianism, to illustrate how an individualist analysis gives strong support to the values of community life; indeed, stronger support than communitarianism because individual rights are very powerful legal trumps on such environmentally destructive acts as dumping, rationing, and otherwise merely blunting the injuries of pollution.

Journal ArticleDOI
TL;DR: The conventional wisdom in economics is that resources are limited, wants are unlimited, and the business of the economist is to understand how limited resources are allocated to satisfy unlimited wants.
Abstract: The conventional wisdom in economics is that resources are limited, wants are unlimited, and the business of the economist is to understand how limited resources are allocated to satisfy unlimited wants. Typically, poverty or unmet physical need is addressed apart from consumer behaviour. It was not always so. Adam Smith, Alfred Marshall, and Paul Samuelson as recently as 35 years ago, for example, were explicit about the direct linkage between needs and wants. The changes that have taken place over the years are attributable to a shift away from an Aristotelian perspective on the nature of economic studies towards the Enlightenment view. Challenges the conventional wisdom that wants are virtually unlimited, resources are limited, and poverty is best addressed apart from wants. Presents need fulfilment alongside want satisfaction in the context of the principle of subsidiarity which helps define the role of the state in provisioning unmet need.

Journal ArticleDOI
TL;DR: In this paper, the authors present a case study of an ideologically dogmatic bureaucracy which ignored people's deep-seated ethical norms and values, and the principles of solidarity, subsidiarity and justice were insufficiently exercised.
Abstract: Sees East Germany as an important case study of an ideologically dogmatic bureaucracy which ignored people′s deep‐seated ethical norms and values. The principles of solidarity, subsidiarity and justice were insufficiently exercised. The political leadership failed to recognize and understand the degree of people′s resignation and frustration, being out of touch with socioeconomic reality. Hence it programmed false decision making and inefficiencies into a system which was held together by an excessive police apparatus, repression, corruption and propaganda. As a result, the East German system imploded under its own irrationality, induced by an almost complete loss of confidence in the ruling party and the government. Addresses primarily ethical rather than economic issues which successfully challenged the East German state.

Journal ArticleDOI
TL;DR: In this paper, the United Nations General Assembly has set into motion an international negotiating process for a framework convention on climate change, and one of the specific tasks in these negotiations is how to share the duties in reducing climate relevant gases, particularly carbon dioxide, between the industrial and the developing countries.
Abstract: The inherent linkages between climate and the habitability of the Earth are increasingly well recognized, and a convention could help to ensure that conserving the environment and developing the economy in the future must go hand in hand. Due to growing environmental concern, the United Nations General Assembly has set into motion an international negotiating process for a framework convention on climate change. One of the specific tasks in these negotiations is how to share the duties in reducing climate relevant gases, particularly carbon dioxide, between the industrial and the developing countries. The respective proposals could be among the most far‐reaching ever for socio‐economic development, indeed for global security and survival itself. While the negotiations will be about climate and protection of the atmosphere, they could lead to fundamental changes in energy, forestry, transport and technology policies, and to future development pathways with low greenhouse gas emissions. Addresses some of th...

Journal ArticleDOI
TL;DR: The encyclical Centesimus annus was published by Pope John Paul II in commemoration of Rerum Novarum, written 100 years ago by Leo XIII as mentioned in this paper.
Abstract: The encyclical Centesimus Annus was published by Pope John Paul II in commemoration of Rerum Novarum, written 100 years ago by Leo XIII. That encyclical initiated a century of Catholic social teaching consisting, by now, of six encyclicals. Together, they are intended to represent a unified system of thought, the Church′s social vision. Its basic themes all centre on the God‐ordained dignity of man. The Pope calls for a modified, “corrected” capitalism, a “Society of free work, of enterprise and of participation”. The economic activities of man are to be reoriented towards the common good, with the ultimate goal of eradicating poverty, exploitation, and alienation. Rejects the economic proposals of the Pope as lacking of substance and internal consistency. Its assumption that man can enjoy all the advantages of free markets while also correcting for their less‐desirable effects at will reveals that, despite some modifications, Catholic social thought is still inspired by what has been termed the “unconstr...

Journal ArticleDOI
TL;DR: In this article, formerly socialist economies of Eastern Europe have been advised by the West to adopt the property rights of classical capitalism, yet the Western economies from which this advice emanates are all struggling to overcome productivity stagnation due to the tensions between the interests of capital and labour.
Abstract: Formerly socialist economies of Eastern Europe have been advised by the West to adopt the property rights of classical capitalism. Yet the Western economies from which this advice emanates are all struggling to overcome productivity stagnation, resulting from the tensions between the interests of capital and labour. Experiments range from quality circles to far fuller worker participation in decision making and ownership. However, these experiments are coming forth slowly and timidly. Once in place, property rights are exceedingly difficult to alter. Thus those property rights chosen within East European economies over the next several years may be those which define these economies for the foreseeable future. Consequently, it would be an ironic and tragic twist of fact if East European economies were to turn now towards classical capitalism only to find that the future belongs to post‐capitalist forms of productive organization.

Journal ArticleDOI
TL;DR: The distinction between negative freedom or liberty, which means the absence of constraint and compulsion, and positive freedom, which always implies the power to make one's will effective to gain access to a chosen alternative as discussed by the authors.
Abstract: Makes the distinction between negative freedom or liberty, which means the absence of constraint and compulsion, and positive freedom, which always implies the power to make one′s will effective to gain access to a chosen alternative. Argues that positive freedom can be used either creatively or destructively. The creative use of positive freedom enhances and improves the economic freedom and economic justice that accrues to other people. The destructive use of positive freedom damages and diminishes the economic freedom and economic justice of others. It follows that the government should intervene in the political and social economy to encourage and to facilitate the creative use and to discourage or prohibit the destructive use of positive freedom.

Journal ArticleDOI
TL;DR: In this paper, the authors argue that the ethical conduct of most forensic economists appears to be unimpeachable and that there are strong competitive pressures in the market to obtain countervailing opinions which, ultimately, serve to minimize incompetence and unethical behaviour on the part of forensic economists.
Abstract: With the expanded use of forensic economists by the legal system has come a heightened awareness within the profession of potential and actual unethical behaviour by its members. Examines the arguments explaining unethical behaviour in detail and shows that their descriptive and empirical foundations have been excessively narrow. The market does not consist solely of trial testimony, as the literature would lead one to believe, but in the entire array of uses of forensic economists, especially in writing reports of economic damages. Asserts that the ethical conduct of most forensic economists appears to be unimpeachable. Moreover, there are strong competitive pressures in the market to obtain countervailing opinions which, ultimately, serve to minimize incompetence and unethical behaviour on the part of forensic economists. Recommendations to improve the market further include the provision of additional information about the quality of forensic economists′ work, and promotion of a code of ethics for the ...

Journal ArticleDOI
TL;DR: In this paper, the authors present a study of customer service and work habits in post-Communist Poland, based on seven weeks of observation in 1991, with two purposes: to warn Westerners about problems in starting or taking control of a Polish business or becoming partners with Polish interests in an established business; and to prod Poland into tearing out the roots of this problem.
Abstract: Addresses customer service and work habits in post‐Communist Poland, based on seven weeks of observation in 1991. Has two purposes: to warn Westerners about problems in starting or taking control of a Polish business or becoming partners with Polish interests in an established business; and to prod Poland into tearing out the roots of this problem – homo sovieticus – which are deeply embedded in the Polish economic order. Homo sovieticus is a human whose spirit has been systematically destroyed by a system designed by and for Stalin and erected in his name and memory. Customer service in Poland has been influenced by two factors: the shortages of the former command economy and the role of state enterprises as industrial welfare agencies. As to work habits, there is no solidarity among those who labour in the same workplace nor is there any teamwork in the workplace or the marketplace.

Journal ArticleDOI
TL;DR: In this paper, the effects of immigration on the earnings of the native born, immigration as a form of worker-sorting, and allocation schemes concerning the immigration of skilled and non-skilled workers are discussed.
Abstract: In 1990, the federal government of the United States passed a bill to allow an increase in legal immigration by 1.2 million until 1994. Many questions concerning immigration have been detailed in the economics literature. They concern the effects of immigration on the earnings of the native born, immigration as a form of worker‐sorting, and the allocation schemes concerning the immigration of skilled and non‐skilled workers. Examines the theoretical and empirical answers to these questions. Points out that an examination of immigrant earnings over time often depends on the type of model selected, cohort or cross‐sectional analysis. Also, many immigrants seek a political and economic environment that promotes self‐employment as a form of worker‐sorting. Also of interest, theoretical debate is provided on the nature of immigration, being either political or economic. The debate over immigration has many policy implications for the 1990s, because of the first changes in immigration restrictions since Simpson...

Journal ArticleDOI
TL;DR: The authors examines the political economy of War Communism as an exemplar of the "Socialist Command Model" and explores the economic, political and social forces that were responsible for the emergence of the model, its policies, programmes and consequences, and finally, the forces that made it obsolete for the subsequent stages of Soviet development.
Abstract: The Soviet experiment on socialism provides several distinguishable politico‐economic models. Employing dialectical methodology, examines the political economy of War Communism (1917‐21) as an exemplar of the “Socialist Command Model”. Explores the economic, political and social forces that were responsible for the emergence of the model, its policies, programmes and consequences, and finally, the forces that made it obsolete for the subsequent stages of Soviet development.

Journal ArticleDOI
TL;DR: Alternative economics as discussed by the authors is a new doctrine of economic thought centred around human communities and their natural environments, which tries to find ways in which economies could have been made more ecologically benign and humane.
Abstract: Focuses on the basic concepts and principles of alternative economics; a new doctrine of economic thought centred around human communities and their natural environments. The ideas of Karl Polanyi, Ernst F. Schumacher, and Herman E. Daly are presented as the most important antecedents. Considering the economy as multiple interplay among natural ecosystems, economic organizations and human communities, alternative economics tries to find ways in which economies could have been made more ecologically benign and humane. Demonstrates the practical relevance of alternative economics to two fields: first, the responsibility problematics of economizing and, second, the question of how to form economic policies which serve real development.

Journal ArticleDOI
TL;DR: The authors argue that the new classical economics cannot be reconciled with Christian economic principles, which in fact fit Keynesian analysis better, and turn on positive versus normative thought, the holistic approach of Christian thought, and suppression of attention to proper human participation in economic institutions and decisions.
Abstract: Argues that the new classical economics cannot be reconciled with Christian economic principles, which in fact fit Keynesian analysis better. General dissent turns on positive versus normative thought, the holistic approach of Christian thought, and suppression of attention to proper human participation in economic institutions and decisions. Specific disagreements concern well‐known policy applications of the new classical economics, notably inflation and money supply rules, and presumptions of clearing markets, especially that for labour. The Keynesian tradition does have room for normative values and supposes imperfect product and labour markets.

Journal ArticleDOI
TL;DR: In this article, a simulation model shows that almost the same degree of savings can be achieved by a different type of policy, namely prevention policy, without lowering the benefit and limiting the duration of it.
Abstract: Critically examines the 1993‐reform in the Disablement Act for employees in The Netherlands. Demonstrates that the new measures, which are mainly directed at lowering the benefit and at limiting the duration, are not as effective in reducing expenditures in this field as they were meant to be. In addition, by means of a simulation model shows that almost the same degree of savings can be achieved by a different type of policy, namely prevention policy, without lowering the benefit and limiting the duration of it. Examines the conditions for a successful prevention policy. Finally, discusses the social security changes in The Netherlands within a European socio‐economic perspective.