Social crises like employment crisis, huge budget deficits, distrust of old-age pension and health service system, serious stagnation of countryside economies, and weakening of family are strongly correlated with economic and social policies based on neo-liberal ideology which gained power in countries like the U K and the U S in 1980' but is now outdated and unsuitable to present problems in many countries like Japan. We must deal with such problems by economic and social policies which are based on reflexive pro-welfare state idea. We previously criticized influential theories that welfare state systems have been dismantled with transformation of capitalist economies in advanced countries. On the other hand, the views are gaining ground that welfare state system has not been dismantled but has no good prospect as effective and justified social system. The following evidences are often offered to support such a view. Globalization is undermining the capacity of the interventionist and revenue-raising welfare state. Since Keynesianism is held no longer to work, welfare state lacks its own viable political economy for managing economic life. There are some truths in such views, but they are just looking at one side of the matter because they lack exact understanding what welfare state systems have developed until now. Recently, many people discuss civil society. The revival of concept of civil society is connected with rises of democratic struggles against totalitarian socialist regimes in East European countries and new social movements in the West (civil movements of black people, student and youth movements, feminist movements, peace and ecology movements). We consider how the concept of civil society makes discussions of the welfare state system productive and expands potentiality of present welfare state systems by analyzing civil society notions of leading scholars (John Keane, Jean L. Cohen and Michael Walzer). We argue that the claim that welfare state has impoverished the relations of civil society is not confirmed by an investigation into various welfare state systems. We perceive the fundamental distinction between universal and means-tested social policy measures. Universal welfare programs in Sweden cannot be seen as subversive of civil society as compared with selective social programs in the United States. We must reform welfare state systems based on the economic, political and moral logic of the welfare state. Institutions matter for great possibilities in welfare state. If citizens believe that welfare policy goals are legitimate, welfare policy is carried out in a fair manner, all citizens bear their share of the costs of a given policy, they are likely to support welfare state. We must take account of this perspective on local decentralization reforms and tax reforms. We must reform welfare state systems based on fundamental changes of economic and social systems. These changes include globalization of economy, the changing role of women, new changed relations between citizens and state. We must transform the welfare state from a safety net in times of trouble to a springboard for economic opportunity. The principal duties of a new welfare state are to promote lifelong learning, to support full employment in a modern economy and to underpin present social security.

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Discourses of neo-liberalism play nowadays an important role for propaganda of an ideology convergence of the whole world to the American economic model through the globalization. In order to criticize such a neo-liberalist point of view, the article points out, 1) the diversity of contemporary capitalism, 2) the driving principles of socio-economy and history: capital principle and society principle, and 3) the main aspects of social crisis in Japan. Succeeding to a pioneering classification, Anglo-Saxon and Rhine capitalisms, by M. Albert (1991), P. Hall and D. Soskice (2001) have made special reference to the way for firms to arrange their coordination problems and proposed a dichotomy of capitalism: liberal market economies (LMEs) and coordinated market economies (CMEs). In the LMEs like the USA, firms manage the activities via competitive market economies, while in the CMEs like Germany, they depend on non-market relationship: reliance and collaboration between firms. According to this approach, both types of capitalism show their own macro-economic efficiencies; it means non-convergence of capitalist economies to the LME. Though their dichotomy of capitalism is very simple and clear, yet it is too rough as a typology of capitalism. Setting a new concept of social systems of innovation and production (SSIPs) and introducing a cluster analysis of OECD's statistics, B. Amable (2003) has classified twenty-one countries into five models: Market-based, Asian, Continental European, Social-democratic and Mediterranean (or South European) capitalisms. He has thus far refined the analysis of capitalist diversity and criticized the neo-liberal hypothesis of convergence. Starting from his criterion of diversity of capitalism, we can put an idea of opposition and complementarity of 'capital principle' and 'society principle' as driving forces of socio-economy and history. Two principles have been influential alternatively in the modern history. From this point of view, the present age after Fordism is characterized by a predominance of capital principle over society principle or, in other words, by a reckless driving of capital principle, in opposition to the regulationist standpoint: capitalism must be socially domesticated. This is why we are today in a social crisis. With regard to the social crisis of Japan, it is fundamentally a crisis of companyist regulation or of company-led capitalism which was so efficient in the past years. Facing with globalization, neo-liberal pressures, aging society and knowledge-based society, the companyist regulation has turned out to be inefficient. In this situation, the neo-liberal responses by market fundamentalism have doubled the social crisis on the one hand, but the alternative way out from companyism is so far very weak and ambiguous on the other.

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This paper considers different concepts of equality and inequality in neo-liberalism and welfare states. The equality in neo-liberalism or libertarianism is based on the two principles, that is, the principle of "distribution in proportion to desert," and that of "burden in proportion to benefit." We call them "the market principles" in this paper. On the other hand, the equality in welfare states is based on the different two principles, the principle of "distribution in proportion to needs," and that of "burden in proportion to ability." We call them "the community principle." Karl Marx distinguished the works principle (a kind of the principle of distribution in proportion to desert) and the needs principle in his Critique of the Gotha Programme. He expected that the works principle would prevail in the first stage of a communist society and the needs principle would do in the second and highly developed one. Amarthya Sen pointed that the needs principle had been involved in the social security and other social services in welfare states. This paper argues that the community principles, including the needs principle and the principle of burden in proportion to ability, are more or less prevailing not only in welfare states but also in various communities such as families, local communities, companies, religious organizations, nation states, and international organizations.

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It is not easy to provide a comparative assessment of the situation of the U.S. economy at the turn of the 21^<st> century. On the one hand, the domination of the United States on the world economy and its political and military preeminence appear even stronger in the early 2000s than in the late 1970s. On the other hand, the sudden contraction of the growth rates at the end of 2000, the ensuing recession, and the collapse of the stock market suggest a new, less favorable, course than during the second half of the 1990s. Even more importantly, the growing disequilibria of the U.S. economy-notably the external debt, and the debt of households and of the state-raise doubts concerning the capability of this country to maintain its unrivalled leadership. The problems lie in the "internal" trajectory asserted in the country, and their consequences on external disequilibria, in particular the constant decline of domestic savings-the expression of a growing propensity to consume. This movement was a consequence of the increased income and wealth of the richest fraction of households, a fundamental characteristic of neoliberalism. It reached such degrees that the capability to spend of the country became thoroughly dependent on the import of goods, and opened new opportunities to the financial investment of foreigners. This foreign capital must also be remunerated, drawing important income flows out of the country. The central element in this new course to be found is obviously the reduction of the expenses of rich households, the redirection of demand toward domestic markets, and larger accumulation rates financed domestically. Keeping profits within corporations would be a straightforward manner of cutting the income of rich households and financing investment. It means lower interest rates and lesser dividend payout. Thus, it contradicts the fundamental neoliberal objective of restoring capitalism in its pre-World War II patterns. A falling dollar is a tool toward the correction of external trade balances, but it contradicts U.S. financial domination. In the movement toward such a trajectory, the macroeconomy will remain a constant constraint. The stimulation of the spendings of households is a central element of the preservation of the economic activity-the avoidance of recessions or more dramatic crises. The outcome will be determined by the interplay of political forces, domestically and internationally. Domestically, the "neoliberal compromise" with upper middle classes which benefited from capital income flows, notably through their pension funds, could be broken, most likely adding to the pressure on popular classes. In this case, the pursuit of the historical endeavour of ruling classes in neoliberalism could only be perpetuated by way of a growing distance taken from traditional "democratic" rules-unless a radical change away from neoliberalism can be implemented, and this is what "struggle" means. Internationally, a similar confrontation is under way, in which one can identify growing popular and government initiatives toward resistance, though still quite moderately. A major foreseeable component will be the attempt to increase the pressure on the rest of the world.

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Whilst different kinds of 'incommensurability' were argued in the 'the socialist calculation debate', which made the debate unexpectedly fruitful, there has never been a research for reconstructing the debate in respect of 'incommensurability'. This paper, therefore, aims to reconsider the debate by focusing on 'incommensurability', and to defend an argument by Otto Neurath, an Austrian socialist, in the debate. Incommensurability is defined as a lack of measurement: two items or options are commensurable if they can, and incommensurable if they cannot, be measured. According to John O'Neill's recent studies on the debate, whilst Neurath and Hayek similarly argue on 'incommensurability', they don't reach an agreement because the locus of their 'incommensurability' are different: Neurath's incommensurability exists in between values themselves whereas Hayek's one is in between different beliefs about what is of value. In other words, Neurath's incommensurability derives from value pluralism, whereas Hayek's one derives from epistemic relativism. Exploring the difference paves the way for rediscovering importance of the debate, and especially for defending Neurath's standpoint, which was supposed to be inferior to others' one. After summarizing O'Neill's argument on the debate, we firstly reconsider the debate by Mises, Neurath, Hayek and Lange, respectively, by focusing on their different aspects on 'incommensurability'. Second, we support a, so-called, 'weak claim' that O'Neill holds, namely 'even though Hayek is right, Neurath is defensible'. Unlike O'Neill's approach, however, we try it from a perspective of critical realism. Critical realism is a philosophical and methodological perspective currently argued in the U.K. and holds that there is more to 'what is' than 'what is known'. The former framework of questioning is called ontology, namely the philosophical investigation about nature of being or existence. In contrast, the latter one is called epistemology, namely the philosophical investigation about knowledge of being or existence and about how knowledge of being is obtained. Ontology has, for many years, tended to be overlooked and has often been eclipsed by its relative epistemology. This has, almost inevitably, led to ontological confusion right across the spectrum of social science in general and in the analysis of money/market in particular. Through 'philosophical under-labouring' for Neurath's argument from a critical realist perspective, this paper tries to avoid the ontological confusion encouraging the practice of collapsing value pluralism into epistemic relativism.

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