Welfare State

THE PROBLEM OF THE welfare state has been of paramount importance over the last decades, both in political and scientific debates. What the welfare state really is, what it should have ideally been, how and why it is changing in the frame of globalization of the economy and of the resulting denationalization of politics, are the main questions in the analysis of the modern welfare state and the political management of poverty.

Although there are several ways of understanding the welfare state, there is no fixed definition of its nature and functions, for these are not consistent characteristics. They are rather subjected to more general economic conditions and needs, to which the welfare state is called to respond. Welfare state and economy cannot be separated and discussed autonomously. In the history of capitalism there has always been a need to adjust politics to economy, to avoid social crises caused by the economy, and to achieve an equilibrium that would not harm the general social cohesion. But the special means with which the society adjusts to the needs and priorities of the economy, the means with which the welfare state regulates phenomena such as poverty and social inequality, are not stable but rather historically defined.

It is therefore safer to understand the welfare state in its historical context. The term modern welfare state is usually used in order to describe the specific postwar state in the economies of Atlantic Fordism, namely the United States and Canada, northwestern Europe, Australia, and New Zealand. This postwar period until the mid-1960s and in some countries until the early 1970s has been characterized by the Keynesian economic model of poverty management.

The economic model of John Maynard Keynes (1883–1946), the economist who inspired a monetary policy based on public investments and social benefits, characterized the early welfare state. Keynesianism was called to face poverty through a monetary policy basically based on the provision of benefits and on the creation of an appropriate infrastructure for the support [Page 1169]of mass production and consumption. In an age when mass production was, on the one hand, accompanied by a series of unprecedented technological revolutions and innovations and by enormous social inequalities on the other hand, the Keynesian welfare state was focusing on full employment and the management of demand.

In the Keynesian welfare state the social stratification and the poverty of unprivileged social groups caused by the capitalist mode of production would not be challenged by a radical change inside this specific mode of production.

On the contrary, the state was interested in generalizing the norms of mass consumption of the advanced industrial society. Through the provision of public infrastructure, welfare rights, benefits, and social services in the fields of health, education, work, and insurance, the state was supporting the “mixed economy.” At the same time, the state was compensating for several market failures, like unemployment, poverty, and social inequality caused by the diverse access of social groups and individuals to consumption and the work or labor market.

Although the welfare state did not have a unified form in all countries (for instance, the liberal type of the United States and Great Britain, the cooperative model of continental Europe, the social democratic Scandinavian model, or the familial model of southern Europe), the fiscal and economic crisis that it underwent from the 1970s onward was more or less common in most of these countries.

...