WELFARE STATE

The term welfare state originated in the wartime Britain of the 1940s. The term initially contrasted the ideals of the British ‘‘welfare state’’ with those of Nazi Germany’s ‘‘Warfare State.’’ First used by William Temple, Archbishop of York, it signified a commitment to ensuring basic social protections for all citizens, rather than a commitment to waging war. The most basic definition of the welfare state refers to government responsibility for tending to its people’s welfare.

It is not an accident that, in all postwar capitalist democracies, the government has instituted some type of welfare-state programs. Go/sta Esping-Anderson suggests that capitalist economies create pressure for the development of the welfare state. In a capitalist economy, commodities such as food, clothing, and shelter are bought and sold on the market. Individuals and families cannot survive without purchasing these commodities. In order to obtain money to purchase goods and services, they must sell their labor power to an employer. If they cannot find an employer, they cannot purchase the commodities to satisfy their wants. The capitalist economy, making it impossible for most individuals and families to survive without employment, puts people at the mercy of economic misfortune. The resulting human misery creates pressure for public policies that cushion the negative effects of unemployment. Welfare-state policies can help to fill this gap, allowing people to maintain an acceptable standard of living outside the market. For instance, public pension programs and means-tested welfare programs both allow individuals to survive without selling their labor.

However, some analysts, particularly those working within the Marxist tradition, argue that these programs allow the state to deflect demands for the more fundamental (radical) changes they believe are needed. In Regulating the Poor, Francis Fox Piven and Richard Cloward contend that welfare-state programs expand in times of high unemployment, controlling the widespread discontent that threatens the established capitalist order.

The term welfare state is broad and encompasses many government programs designed to meet needs with respect to housing, education, transportation, nutrition, and social services; but the reference is most typically to programs designed to meet needs with respect to social insurance, social assistance (welfare), and health care. Social insurance programs, such as Social Security, are considered middle-class programs. They protect primarily working- and middle-class workers from the loss of income due to such contingencies as old age, unemployment, and disability. These programs are often associated with entitlements that are awarded independent of any proof of economic need. In contrast, welfare programs, such as Supplementary Security Income, provide benefits that are means-tested, that is, awarded after proof of economic need. Typically, these benefits are restricted to those with very low income and asset levels.

Welfare states differ widely in the scope of their means-tested and entitlement programs and their mix of private and public provision. Esping-Anderson (1990) differentiates between three types of welfare states. The first, found in France, Germany, and several other Western European nations, is designed to preserve preretirement status differences. Germany has, since the inception of its old-age pension program in 1889, relied heavily upon public pension benefits that were closely linked to payroll contributions over the years. The second type of welfare state, illustrated by Norway, puts greater emphasis on the principle of the universal rights of citizenship. In addition to its earnings-related pension, Norway provides a generous universal flat-rate old-age pension. The third type of welfare state generally found in Anglo-Saxon nations tend to be more residual in nature, being means tested, as with the old-age pension in Australia. Similarly, approximately one-third of British pensioners rely on means-tested benefits for at least part of their income.

Although most advanced welfare states have come to include a variety of different programs designed to meet the needs of different segments of society, including different age groups, programs for the older population have often played an important role during the early stages of welfare-state development. The early welfare-state programs in prewar Europe generally focused on social insurance benefits. Although pension programs were among the first of these programs, during the prewar years most nations provided relatively meager benefits intended primarily to protect workers against destitution in old age. During the decades following World War II most industrial nations enacted pension reforms calling for much more generous benefits; in many cases these pensions eventually came to replace a substantial fraction of the worker’s pre-retirement standard of living.

American exceptionalism

Although in most Western capitalist democracies the lion’s share of welfare-state expenditures goes to older adults, this age group has played a particularly important role in the development of the welfare state in the United States. Today no other welfare state is so heavily focused on programs for older adults. It is the only industrial nation that restricts national health insurance coverage to the older population (and the poor). In contrast to the European nations, the United States never developed a family allowance program (monthly cash benefits based on the number of children in the household). The large expenditures that go to programs for older persons have prompted sociologist John Myles to refer to the American welfare state as a ‘‘welfare state for the aged.’’ A large proportion of federal expenditures goes to age-based policies such as Social Security and Medicare, programs that use age as a criterion in awarding benefits.

Jill Quadagno notes that the United States was late to develop a welfare state for several reasons. The enduring split between North and South assured that the working class would not be strong enough to push for welfare-state programs. Because of the inability of the working class to push for reform, programs for older adults took center stage in the development of the American welfare state. Before the 1930s, the primary welfare-state programs in the United States were pensions. For instance, some states provided public pensions for which very few people were eligible. In addition, the Civil War pension system, introduced in 1862, provided benefits to former Union soldiers and their dependents, regardless of race. By 1910, over one-quarter of all American men age sixty-five or older were receiving Civil War benefits. Because these pensions provided benefits to many well into the twentieth century, they ended up delaying the introduction of social insurance–based old age pensions.

After the Civil War generation and their dependents died out, several voluntary organizations campaigned for old age pensions including the Fraternal Order of Eagles, Upton Sinclair’s pension movement, the Ham and Eggs movement, and the Abraham Epstein’s American Association for Social Security. The most successful of such organizations was the Townsend movement; it eventually attracted over one million supporters. Francis Townsend proposed that all Americans over age sixty-five receive a pension of two hundred dollars per month. The Great Depression hit older adults hard, producing higher rates of unemployment and poverty among older workers. President Franklin D. Roosevelt’s push for the adoption of the Social Security Act of 1935 was intended in part to respond to (or, more precisely, to undercut the demands from) such groups. By increasing the purchasing power of and discouraging labor force participation among older adults (and thus opening up jobs for younger workers), the act was intended to help stabilize the economy. The adoption of this legislation instituted a mandatory, contributory pension system for the United States.

In addition to the relatively late development of a national pension system, the United States is the only industrialized nation never to have developed a system of universal health insurance. The health insurance system is predominantly private, with two primary forms of public insurance: Medicare and Medicaid. Medicare insures the population eligible for Social Security, typically covering only acute care and rehabilitation costs. Medicaid is a means-tested program limited primarily to persons who receive Temporary Assistance for Needy Families (TANF) or Supplemental Security Income (SSI). Of these, Medicare is the most explicitly age-based. Enactment of Medicare in 1965 during the Johnson administration was preceded by several legislative failures during the Truman and Kennedy administrations. The bill was backed by a labor-senior coalition including the American Federation of Labor, the American Association of Retired Workers, and the National Council of Senior Citizens. Simultaneously, the original opponents of Medicare put forward a more modest alternative proposal called the Eldercare bill, which promised to provide more extensive benefits to a limited population of elderly persons. A health-industry coalition, including the American Medical Association, the American Hospital Association, the National Association of Manufacturers, and the Chamber of Commerce backed the Eldercare bill. In general, these organizations opposed government intervention into health insurance.

Welfare-state contraction begins

Between the mid-1960s and the mid-1970s the number and size of welfare-state programs expanded rapidly, but beginning in the mid-1970s, a combination of economic, social, and political factors led to a reversal of the trend. Stagflation (the combination of high rates of unemployment and high rates of inflation) and recession led many Americans to question America’s economic future. As workers faced stagnating wages and reductions in their standard of living, resentment toward welfare-state programs increased, particularly with respect to programs targeted at the poor, such as Aid to Families with Dependent Children (AFDC). The Watergate crisis provided evidence of corruption at the highest level of government and contributed to widespread cynicism. The economic downturn of the 1970s and evidence suggesting that many of the nation’s costly antipoverty programs were not producing the desired results in the ‘‘war against poverty’’ contributed to a political shift toward the right. This shift was reflected in successful tax revolts in several states, including Proposition 13 in California and Proposition 2 in Massachusetts. Ronald Reagan’s election as president in 1980 was in part a reflection of discontent with existing welfare policies. His campaign openly advocated dismantling or severely cutting back many social welfare programs aimed at the low-income population.

During the late 1970s and again during the early 1980s Social Security faced a short-term funding problem and a number of changes had to be made, including an increase in the payroll taxes and some modest benefit cuts. Some political commentators on the right argued that Social Security faced a ‘‘crisis’’ that necessitated a reduction in promised future Social Security benefits to ‘‘save’’ the program. While the program remained very popular with the general public, for the first time a substantial segment of the population came to fear that their Social Security benefits might not be there when they retired.

During this same period, criticisms of Medicare centered on the growing costs of medical treatment, often referred to as ‘‘medical inflation.’’ The Health Care Financing Administration, created in 1977 to administer Medicare and Medicaid, failed to control the rapid increase in federal spending. The Reagan administration succeeded in pinning much of the blame for medical inflation on the Medicare program, which was viewed as encouraging older adults to overutilize health care, requesting and getting treatments and services that they otherwise would not have asked for.

The generational equity debate

During the mid-1980s one form that the debate over welfare spending took was attention to the relative amount of federal spending on different age groups. It became clear that the federal government was spending much more on elderly persons than it was spending on children. Those on the political right used this to frame what came to be called the ‘‘generational equity’’ debate (Williamson and Watts-Roy). Their argument was that the nation was spending too much on Social Security, health care, and other programs for the elderly, thereby leaving too little for other age groups, particularly children. Another part of the argument was that each generation should be expected to pay for its own retirement. Opponents of this framing of the debate over welfare spending argued that it was not reasonable to expect each generation to pay the full costs of its own retirement as special events such as war or depression can handicap certain generations. These opponents of the generational equity framing also argued that the emphasis on generational equity was being used as an excuse to ignore other important equity issues, such as those linked to race, class, and gender.

The generational equity debate came to include the issue of health care rationing. Daniel Callahan, in Setting Limits, made the controversial argument that, as the population continued to age, Americans would need to limit the share of health care resources that older persons received. Callahan’s critics claimed that he was scapegoating older adults, unfairly blaming them for the poor management of health care financing in the United States. They pointed to the evidence that many other nations are able to provide health care for the entire population while spending a much smaller share of the gross national product to provide that care.

Even the opponents of the generational equity framing of the debate over the future of the welfare state recognize that the nation will need to make some adjustments to help pay for the retirement of the baby boomer generation. The costs of providing Social Security pensions and health care as well as spending on housing and social service programs aimed primarily at the older population are likely to increase when the boomers retire. Both conservatives and liberals recognize that some cuts in projected spending will need to be made to compensate for the increased number of beneficiaries.

The trend toward privatization

In recent years the debate over the future of the welfare state in the United States has come to focus on the decision whether or not to partially privatize Social Security. The publication of the 1997 report of the Advisory Council on Social Security, with its proposals to partially privatize Social Security, marked a major shift in thinking about the future of the welfare state. Proposals to partially privatize the core of the welfare state, which had long been advocated by the political right, had moved to the political mainstream. Whereas Social Security had traditionally been a defined benefit program involving substantial redistribution from high-income to low-income workers, partial privatization would reduce the extent of redistribution. This in turn would contribute to greater income inequality among elderly persons and to an increase in the proportion of elderly persons falling below the poverty line.

Whereas the emphasis in the American welfare state has to this point been on social insurance with its emphasis on shared risk and protecting old-age pensions against the effects of inflation and dramatic shifts in financial markets, the privatization alternative calls for shifting the risks (and costs) from the government to the individual and his or her family. Even a partial privatization of Social Security would represent a major shift in the direction of the American welfare state. It would represent a decision to reduce the role of the government in providing social welfare benefits, particularly its role in providing benefits to the working class and the middle class. It would represent a step in the direction of reducing the size of the American welfare state and targeting welfare-state spending on the poor.

The welfare-state contraction evident in the United States in recent years is part of a broader trend that includes most other industrial nations as well, even nations such as Sweden that have much more comprehensive welfare-state programs. Recent cutbacks in state programs for the older population in Germany, the introduction of individual accounts and the partial privatization of pensions in Sweden, and the trend toward greater emphasis on privatization in Britain all reflect the contraction of welfare-state programs that is taking place throughout the world. In most explanations of the welfare-state reform in Western states, changing economic and demographic conditions have received much attention. One fear is that population aging will lead to unacceptably high future pension and health care spending unless changes are made.

The nations of east central Europe and Latin America are developing alternative models of social provision that put greater emphasis on privatized individual accounts and reflect a trend away from traditional social insurance provision. East Asian nations have developed relatively modest welfare-state programs that implicitly assume the emphasis should be on individual and family as opposed to public provision in meeting social welfare needs.

Future prospects

During the era when welfare-state programs were expanding, the emphasis was on the politics of ‘‘credit taking.’’ However, as we look to the future the focus is likely to be on further welfare-state retrenchment, which will in large measure be an exercise in ‘‘blame avoidance.’’ To this end we should expect legislation that phases in further benefit cuts and tax increases gradually. It is likely that the trend to make benefits, particularly pension benefits, correspond more closely to actual payroll contributions made is likely to continue and with it a corresponding weakening of provisions calling for redistribution.

Current trends suggest that the goal of a highly developed cradle to grave welfare state may be an idea whose time has passed. The era of generous and ever-increasing public commitment to social welfare programs aimed at the working class, the middle class, and the poor may be ebbing. The current trend is clearly toward individual provision and the privatization of what had for many years been government funded welfare-state programs. However, the tide may change yet again when we next experience a prolonged period of economic contraction. At that point the limits of individual provision and privatization may become more evident; we may see a swing back in the direction of public provision and possibly a renewed interest in welfare-state programs and the philosophy that under-girds such programs.

Tay K. McNamara John B. Williamson

See also Age-Based Rationing of Health Care; Canada, Income and Health Protection of Retirees; Generational Equity; Medicaid; Medicare; Political Behavior; Social Security, Administration; Social Security, and the U.S. Federal Budget; Social Security, History and Operations; Social Security, Long-Term Financing and Reform; Supplemental Security Income.

BIBLIOGRAPHY

Berkowitz, E. D. ‘‘The Historical Development of Social Security in the United States.’’ In Social Security in the 21st Century. Edited by E. R. Kingston and J. H. Schulz. Oxford, U.K.: Oxford University Press, 1997. Pages 22–38.

Binstock, R. H. ‘‘Framing the Generational Equity Debate.’’ In The Generational Equity Debate. Edited J. B. Williamson, D. M. Watts-Roy, and E. R. Kingston. New York: Columbia University Press, 1999. Pages 157–184.

Callahan, D. Setting Limits: Medical Goals in an Aging Society. New York: Simon and Schuster, 1987.

Esping-Andersen, G. The Three Worlds of Welfare Capitalism. Princeton, N.J.: Princeton University Press, 1990.

Esping-Andersen, G. ‘‘After the Golden Age? Welfare State Dilemmas in a Global Economy.’’ In Welfare States in Transition: National Adaptations in Global Economies. Edited by G. Esping-Andersen. London: Sage Publications, 1996. Pages 1–31.

Estes, C. L. ‘‘The Reagan Legacy: Privatization, the Welfare State, and Aging in the 1990s.’’ In States, Labor Markets, and the Future of Old-Age Policy. Edited by J. Myles and J. Quadagon. Philadelphia, Pa.: Temple University Press, 1991. Pages 59–83.

Hicks, A. Social Democracy and Welfare Capitalism: A Century of Income Security Politics. Ithaca, N.Y.: Cornell University Press, 1999.

Hudson, R. B. ‘‘The History and Place of Age-Based Public Policy.’’ In The Future of Age Based Policy. Edited by R. B. Hudson. Baltimore, Md.: Johns Hopkins University Press, 1997. Pages 1–22.

Kane, R. L., and Kane, R. A. ‘‘Health Care for Older People: Organizational and Policy Issues.’’ In Handbook of Aging and the Social Sciences, 3d ed. Edited by R. Binstock and L. K. George. San Diego: Academic Press, 1990. Pages 415–437.

Marmor, T. R. The Politics of Medicare, 2d ed. New York: Aldine de Gruyter, 2000.

Myles, J. Old Age in the Welfare State: The Political Economy of Public Pensions, rev. ed. Lawrence: University of Kansas Press, 1989.

Pierson, P., and Smith, M. ‘‘Shifting Fortunes of the Elderly: The Comparative Politics of Retrenchment.’’ In Economic Security and Intergenerational Justice: A Look at North America. Edited by T. R. Marmor, T. M. Smeeding, and V. L. Greene. Washington, D.C.: Urban Institute Press, 1994. Pages 21–60.

Piven, F. F., and Cloward, R. A. Regulating the Poor: The Functions of Public Welfare. New York: Vintage Books, 1971.

Powell, L. A.; Branco, K. J.; and Williamson, J. B. The Senior Rights Movement: Framing the Policy Debate in America. New York: Twayne Publishers, 1996.

Quadagno, J. The Transformation of Old Age Security: Class and Politics in the American Welfare State. Chicago: University of Chicago Press, 1988.

Skocpol, T. Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States. Cambridge, Mass.: Belnap Press of Harvard University Press, 1992.

Wilensky, H. L. The Welfare State and Equality: Structural and Ideological Roots of Public Expenditures. Berkeley: University of California Press, 1975.

Williamson, J. B., and Pampel, F. C. Old Age Security in Comparative Perspective. New York: Oxford University Press, 1993.

Williamson, J. B., and Watts-Roy, D. M. ‘‘Framing the Generational Equity Debate.’’ In The Generational Equity Debate. Edited by J. B. Williamson, D. M. Watts-Roy, and E. R. Kingson. New York: Columbia University Press, 1999. Pages 3–38.

WERNER SYNDROME

See Accelerated aging: human progeroid syndromes

Welfare State

WELFARE REGIMES

HISTORICAL ORIGINS

PUBLIC-PRIVATE MIX

THEORIES OF DEVELOPMENT

SOURCE OF FUNDING

WELFARE STATE CRITIQUE AND REFORM

TRENDS IN THE EARLY TWENTY-FIRST CENTURY

BIBLIOGRAPHY

The welfare state is a set of government programs aimed at ensuring citizens’ welfare in the face of the contingencies of life in modern, individualized, industrialized society. All welfare states provide direct state assistance to the poor in cash (e.g., social assistance) and in kind (e.g., housing and social services), as well as social insurance against the financial consequences of certain biological risks (illness, incapacity to work, childbirth, child-rearing, old age) and occupational risks (unemployment, accident, or injury). Whereas social assistance—in the United States popularly termed welfare— entails redistribution from the non-poor to the poor, social insurance rarely does so and instead can be understood primarily as redistribution across the individual life course, from periods of employment to periods of inability to work. (Prominent exceptions would be the U.S. public pension system, Social Security, and the German social health insurance scheme, both of which are moderately redistributive across classes.) Usually, this latter type of social protection is available only to persons who have been employed and hence contributed to the relevant social insurance scheme.

In most welfare states, substantial efforts are also made to mitigate socioeconomic inequalities in primary income distribution through secondary redistribution, that is, government spending on social programs funded by progressive income taxation together with tax expenditures (tax deductions for social-insurance or charity contributions, as well as negative income taxation for the working poor). Historically, such reductions in socioeconomic inequality have been pursued to achieve four objectives: (1) to reduce the costs of production for employers, especially through unemployment, health, and pension schemes; (2) to maintain social peace, that is, to forestall both radical unionism within the factory, primarily via accident insurance, as well as threats to private property from leftist or rightist political radicalism in society as a whole; (3) to secure equality of economic opportunity, seen as conducive both to social peace and to economic growth; and (4) to enrich the status of citizenship beyond civil and political equality by including a social dimension, as articulated by T. H. Marshall in 1950. Countries pursuing this goal of social citizenship—with the exception of the United States, virtually all members of the Organization for Economic Cooperation and Development (OECD)—consider equally funded and free public education to be an essential component of their pursuit of equality of opportunity and hence of their welfare state in a broader sense.

WELFARE REGIMES

Beyond these shared traits, welfare states differ in many dimensions. Early classification schemes of the 1960s and 1970s, such as that of Harold Wilensky, ranked welfare states in linear fashion according to their “generosity” measured in only one dimension, aggregate spending levels. In 1990 Gøsta Esping-Andersen’s groundbreaking book The Three Worlds of Welfare Capitalism proposed a new typology based on essential differences among welfare states that are not quantitative but qualitative. He preferred the term welfare regime, which focuses the analysis on the patterns of interaction of institutions governing primary and secondary distribution in the context of a nation’s historically rooted political economy, to the term welfare state, which is typically viewed as working against or independent of market forces. First, welfare regimes differ according to their degree of “decommodification,” or “the degree to which individuals and families can uphold a socially acceptable standard of living independently of market participation” (p. 37); this dimension includes not only the benefit levels but also the eligibility terms and coverage levels of a country’s social welfare schemes. Second, welfare regimes differ in terms of their impact on social stratification, that is, their degree of redistribution, poverty reduction, and income equalization. Finally, they differ based on the priority given to the role of the state, market, and family respectively in protecting against welfare risks. Esping-Andersen’s widely accepted typology distinguishes among three types of welfare regimes: liberal (e.g., the United Kingdom, the United States, Australia), social-democratic (e.g., Sweden, Norway, the Netherlands), or corporatist (e.g., Germany, Austria, Italy). Not only Esping-Andersen but also subsequent research on the “varieties of capitalism” by Peter Hall and David Soskice (2001) have demonstrated that a country’s system of social protection forms an integral part of its political economy; thus a leading field of contemporary welfare research takes this holistic regime perspective, looking for institutional elective affinities between a country’s variety of capitalism (“liberal,” “coordinated,” etc. [Hall and Soskice 2001]) and variety of welfare regime (e.g., Ebbinghaus and Manow 2001).

Liberal Regimes Of the three types of welfare regime, the liberal regimes redistributes income the least. Countries of this type provide minimum benefits to the poor and devote most of their expenditure to social-insurance schemes focused on the middle classes. The public schemes are not intended to be the beneficiaries’ sole source of income in time of need, but instead to be a “safety net,” or one pillar beside the second and third pillars of occupational plans and individual savings. In the liberal welfare world, individual performance in the market is considered to be the primary source of welfare, hence generous tax expenditures subsidize employee benefits and individual savings accounts in the pension and health areas. Citizens’ welfare is commodified : they have weak or no constitutionally inscribed social rights, and high levels of socioeconomic inequality are tolerated. Citizens’ welfare is best guaranteed, in the liberal world-view, through economic growth and opportunity rather than state provision; this is best achieved when minimal state taxation of private wealth fosters maximum investment and when minimal state benefits foster maximum self-reliance. Particularly in the United States, the more generous welfare states of Western Europe are viewed more as hammocks than safety nets, whereas the U.S. social net is seen by most Europeans as a sieve.

Conservative Regimes Conservative welfare regimes redistribute moderately, having as their main goals the preservation of social status achieved in the labor market and the realization of social citizenship rights. They provide equally funded and free public education, moderate benefits to the poor, and generous social-insurance schemes for employed persons, in which benefits are linked to contributions and both are linked to the income level attained. In the conservative welfare world, the family is considered to be the primary source of welfare. Hence both the tax system and social-insurance benefits are designed to support the family breadwinner.

Social-Democratic Regimes Social-democratic welfare regimes redistribute extensively and are by far the most successful in achieving long-term reductions in socioeconomic inequality, particularly across generations, as Walter Korpi and Joakim Palme demonstrate in their 1998 study. These regimes integrate antipoverty and social insurance programs in schemes open to all citizens. The schemes are designed to achieve decommodification, that is, to grant social citizenship—the right of meaningful participation in social life—independent of employment status. The state is responsible for achieving a considerable degree of distributional equality.

Although Esping-Andersen’s typology still prevails in welfare state (or welfare regime) research, it has been criticized for overlooking certain dimensions. First, Ilona Ostner and Jane Lewis (1995) have pointed out that this hegemonic typology fails to account for gender discrimination in welfare states, most of which were based on the now-outdated male breadwinner model. Ann Orloff (1993) has developed a new welfare state typology based on the criterion of whether welfare states reinforce the traditional family system and women’s inferior labor-force position or promote new, equal roles for both sexes. Second, in comparing Esping-Andersen’s ideal-types to specific national experiences, many scholars have found the typology to be based too narrowly on the experiences of Britain, Germany, and Sweden and only partially applicable to other countries. In addition to ongoing debates about the classification of individual countries such as France, Ireland, or the Netherlands within Esping-Andersen’s scheme, scholars have proposed supplementary ideal-types: Francis Castles and Castles and Deborah Mitchell (1993) distinguish an “antipodean” “wage-earners” welfare regime in Australia and New Zealand characterized by minimum wage legislation, compulsory arbitration and a protectionist consensus; Maurizio Ferrera (1996) and Giuliano Bonoli (1997) contend that a distinct Latin rim welfare regime (resembling the conservative one) exists in Italy, Spain, and Greece, where family and informal networks are important suppliers of welfare; Bob Deacon (2000), Nick Manning (2004), and Jolanta Aidukaite (2004) have documented the emergence of a postsocialist welfare regime (resembling the liberal one) in eastern Europe; and finally, some, such as Catherine Jones (1993) and Elmar Rieger and Stephan Leibfried (2003), have investigated and posited the existence of East Asian welfare regimes, based on “Confucian” values.

HISTORICAL ORIGINS

As the “logic of industrialization” school correctly observes, the historical origins of welfare state development lie in the consequences of the Industrial Revolution and attendant societal modernization—specifically, urbanization, industrialization, and economic liberalization—in the mid- to late nineteenth century. As Ferdinand Tönnies (2001) explains, these developments uprooted western Europe’s inhabitants from premodern, static communities that had provided for mutualist social protection through the family, community, parish, feudal lord or guild, and thrust them into an individualized, comparatively anonymous urban society in which the satisfaction of basic needs was commodified, that is, had to be purchased with wages from employment. In the early decades of this societal modernization (from the late nineteenth century through World War I [1914–1918]), social unrest, epidemics, slum formation, violent labor conflicts, and radical political movements were rampant. Initially, bourgeois philanthropic associations attempted to mitigate this malaise but within a few decades realized they were overwhelmed. At the same time, the working classes’ sacrifice and service to their states as soldiers in the two world wars earned them sociopolitical recognition and rights in many European countries.

As Walter Korpi (1983, 1993) among others have noted, three factors converged to move political coalitions of bourgeois and working-class parties across Europe to grant workers social and political rights and institute generous welfare-state programs during the period 1918–1949: (1) workers’ newly won political power, organized in Social-Democratic and Labor parties and in some places accompanied by popular uprisings; (2) bourgeois elites’ fear of the political radicalization of impoverished workers as had occurred in the revolutions in Russia (the Soviet Revolution of 1917) and Germany (Adolph Hitler’s ascent to power in 1933)—a fear exacerbated by the Great Depression of 1929 to 1939 and by the witnessing of Hitler’s destruction of the Continent during the five years thereafter; and (3) strong national identities in newly unified nation states, forged and strengthened in the two world wars. Benjamin Veghte (2004) notes that in the United States, where the first two factors were largely absent, the working-class movement was much weaker and unable to achieve social citizenship rights for a variety of reasons. An ambitious welfare state (the New Deal) was introduced during this period, in 1935, but not based on social rights; rather, it largely excluded most of the poor population, such as agricultural workers and southern African Americans. Theda Skocpol’s research (1990) has revealed that the New Deal welfare state was not completely new, but rather followed in the footsteps of a generous Civil War pensions scheme that served millions of beneficiaries (Skocpol 1996). In Britain the Beveridge Report of 1942 highlighted the need for a welfare state to avoid the breakdown of society in the postwar period, and this became the blueprint for the welfare state introduced in postwar Britain.

PUBLIC-PRIVATE MIX

As noted above, prior to the formation of the modern nation-state, most types of social welfare were provided by collective, private forms of provision such as those offered by feudal hierarchies, guilds, and the church. In the course of urbanization, societal modernization, and the ascendance of liberal political and economic ideology since the late eighteenth century, free-market individualism under-minded these traditional collectivist forms of private welfare provision, creating the modern “social question.” After the mid-nineteenth century, modern collectivist private welfare solutions such as solidaristic union/professional initiatives as well as bourgeois or church-based charitable ventures filled the vacuum, followed by welfare state initiatives from the 1880s in Germany, Belgium, and—since World War I—in most other western nations. In most Western countries, then, since the mid-twentieth century the welfare state has been the primary instrument of welfare provision.

This has not been the case in many non-Western countries, however, nor in several liberal welfare regimes, most notably the United States. Interestingly, most countries with weak welfare states evince high rates of religiosity and associated church-based welfare provision and religiously inspired philanthropy. As Leibfried and Mau note,

The history of religiosity in European and other countries which developed strong welfare states shows that the need for religious reassurance in one’s social existence has become less pressing when greater security is provided by the secular institutions of public policy. In other parts of the world, however, where state power has remained weak, the social institutions of religions—for example Islamic charities in Arabic countries, Hinduist castes in India and familial networks in East and Southeast Asia—remained the main provider of social security. (2007, p. xxv)

Secular welfare states may thus be viewed as functional alternatives to religiously inspired and/or organized private welfare provision. Empirically, as Pippa Norris and Ronald Inglehart (2004), and Elmar Rieger (2005) have observed, the revival of evangelical Protestantism in recent decades strongly correlates with the erosion of social security guarantees through the welfare state.

Non-profit, religiously inspired forms of welfare provision are not the only form of private provision to survive and thrive complementarily to and in tension with the modern welfare state. Profit-oriented, market-based provision has done so as well, most strongly in the liberal welfare regimes of Great Britain, Switzerland, the United States, and Australia. These countries were pioneers in private, insurance-based provision, both for individuals and employees. Such welfare provision differs markedly from public provision in both its distributive dynamics (redistributing not across income classes but across the individual life course from economically self-sufficient to risky/dependent life phases) and its financial logic (calculated on actuarial rather than solidarity principles). This realm of social provision, much of which is subsidized by the government in the form of tax deductions (from the government’s perspective: “tax expenditures”), was overlooked in comparative welfare state research until the appearance of Martin Rein and Lee Rainwater’s (1986) pathbreaking analysis of the interplay of public and private welfare provision in OECD countries. Still today, however, most comparative research does not interpret the state-subsidized employee and individual benefits sphere, even though—as Willem Adema (1999, p. 30) and Jacob Hacker (2002, p. 338) have documented—in some countries such as the United States it makes up one-third of (public and private) social spending. Even Esping-Andersen’s (1990) research on the liberal welfare regime type, which theorizes the interaction between the state and the market, overlooks the magnitude and significance of private provision, thus misconstruing the U.S. system as “residual” and “means-tested.” Adema (1998, 1999, 2005) and Hacker (2002) have corrected this misinterpretation, pointing out that if U.S. employee and individual benefits are included in social spending data, the U.S. welfare system evinces a share of GDP roughly equal to the OECD average. The key difference between public (direct) and private (tax expenditure) welfare state expenditure is that the former tends to be redistributive and focus on alleviating poverty, whereas the latter focuses on helping the middle classes provide for their own economically precarious life episodes.

THEORIES OF DEVELOPMENT

In the 1960s and early 1970s, the best comparative work on the welfare state found a country’s prevailing political culture—often termed national values —to be causally significant in shaping its welfare state institutions and their degree of generosity (e.g., Rimlinger 1966, 1971). This ideational approach was displaced in the 1970s by functionalist and modernization theories, most prominently that of a “logic of industrialization” (Wilensky 1975). In light of the universal dissolution of pre-modern mechanisms of social protection—namely, the family, church, feudal hierarchy, guild and local community—all industrializing countries faced similar social problems, and hence developed similar modern instruments to secure a healthy and productive workforce. In this view, differences in welfare state spending levels are attributable not to political-cultural or other qualitative cross-national differences, but to a country’s level of economic development as well as the age structure of its population and degree of maturation of its welfare state. Ultimately, the school claimed, all countries would converge toward an institutionally similar, generous welfare state. Since the 1980s, power-resources as well as polity-centered (and closely related new -institutionalist ) explanations have proven more convincing. The power-resources approach, articulated by Korpi (1983) and Evelyne Huber and John Stephens (2001), argues that the social and political balance of power between labor and capital has determined the level of spending and in particular the degree of redistributiveness of welfare states. Research on the correlation between the partisan composition of governments and their levels of welfare state expenditure has largely corroborated the power-resources interpretation: Manfred G. Schmidt (1982, 1996), Castles and Herbert Obinger (2007), and indeed recently also Wilensky (2002) himself have found strong statistical evidence that where left-of-center (“social democratic,” “labor” or “democratic”) parties have ruled, levels of government social spending and redistribution have been much higher on average than in cases where right-of-center, free-market-liberal (“liberal,” “conservative,” or “republican”) parties have reigned. This “parties matter” explanation enriches the power-resources interpretation, moreover, by showing that the left-right dichotomy does not explain partisan influence fully: Christian-democratic and center parties, historically common in continental Europe, correlate with moderate social spending, that is, more generous than the free-market-liberal parties and less generous than the leftist parties.

Willem Adema and Maxime Ladaique (2005) have demonstrated that when the tax system and private benefits are also taken into consideration, liberal welfare regime expenditure approximates that of the other two regime types. This suggests that Wilensky’s “logic of industrialization” explanation of welfare state growth was correct, according to which a high level of economic development has driven all Western countries to converge toward a uniform, generous welfare state. Castles and Obinger (2007) rebut Adema and Ladaique, however, arguing that while the much greater private welfare spending of liberal welfare regimes often puts them on a par with conservative and social-democratic welfare regime expenditure, the latter are far more redistributive across income categories, making for a fundamentally different type of welfare state. Regarding the causes of welfare state development, they find that while the levels of economic development and economic growth best explain the increase in overall (public cum private) welfare spending, power resources—measured in terms of partisan incumbency—best explains the growth in the more redistributive, direct state welfare spending.

The polity-centered and new-institutionalist approaches adamantly dispute the explanatory power of class. They attribute the scale and type of welfare state expansion and retrenchment to state-structural factors such as the nature of the party system and civil service and the influence of policy intellectuals and reformist associations on these, as in the work of Skocpol (1985); Margaret Weir, Orloff, and Skocpol (1988); and Dietrich Rueschemeyer and Skocpol (1996); the lack of constitutional “veto points,” as in the work of Ellen Immergut (1989) and George Tsebelis (2002); and “feedback effects” of (pre-)existing institutions and policies, as in the work of Paul Pierson (1993).

Both theory and comparative data on public opinion on the welfare state have improved since the 1990s, giving ideational approaches an empirical basis and rendering them worthy of causal reconsideration alongside the power-resources and new-institutionalist explanatory approaches. Indeed, Clem Brooks and Jeff Manza (2006) have found that national social policy preferences exert a strong and measurable influence on welfare state spending as well as on cross-national variation therein, after controlling for other factors such as institutional feedback effects. Mau and Veghte (2007) find strong relationships between welfare regimes and social policy attitudes across OECD countries. Further, Veghte, Greg M. Shaw, and Robert Y. Shapiro (2007) have revealed that social policy preferences and issue prioritizations themselves are contingent and malleable in response to issue framing—for example, of military over social security—by political elites. Given the availability of new transnational datasets on both public opinion and party platforms, more research into public opinion on welfare state issues and its relation to the aforementioned causal factors, and incorporation of this dimension into welfare state theory, can be expected.

SOURCE OF FUNDING

Scholars used to distinguish between contribution-based (the Bismarckian, German model) and tax-based (the Beveridge, English model) funding of welfare state programs, but in practice these two models have converged, as most social-insurance schemes are funded by a mixture of employer/employee contributions and subsidies from general state revenues. Contribution-based schemes, which are funded and administered independent of the government budget and in which members have vested benefits, have historically tended to be more generous and less susceptible to retrenchment than tax-funded schemes, which legislators can cut back when tax revenues are scarce or an antiwelfare state party comes to power.

WELFARE STATE CRITIQUE AND REFORM

After expanding steadily during the “Golden Age” of welfare-state development in the 1960s and early 1970s, most Euro-American welfare states suffered a critical shock from the oil crises and recession of the mid-1970s and the deindustrialization and high unemployment rates that followed. Not only did these factors deprive the welfare state of its financial bases in both tax revenues and employer/employee contributions, the welfare state itself was widely considered to have contributed to the economic collapse by draining the economy of investment income and burdening it with bureaucratic regulations, as well as undermining individual initiative and the will to work through excessive benefits that fostered dependency. Further, the decline in industrial and the rise in service sector employment, as well as increasing individualization, disintegrated the working classes, which historically had directly or indirectly been the main driving force and constituency of welfare state development in all OECD countries except the United States. Overall, the rapid and sharp rise in the absolute and relative amount of government spending devoted to the welfare state, together with the declining popular support for the latter, led many observers by the mid- to late 1970s to perceive a “crisis of the welfare state” (Flora 1981; Offe 1984). If some degree of retrenchment were not implemented, the welfare state threatened to bring Western economies to a standstill. Conservatives won national elections in Britain (Margaret Thatcher), the United States (Ronald Reagan), and West Germany (Helmut Kohl), in the early 1980s and were reelected in the mid-1980s, all running on anti-welfare-state platforms. Ever since, conservatives in most other OECD countries have tried to scale back welfare-state benefits as well as restrict eligibility to those “truly in need.” This has proven extremely difficult, given that in democratic systems, once citizens and/or interest groups have acquired benefits, they mobilize strongly to retain them. As Pierson observes, “Retrenchment is generally an exercise in blame avoidance rather than ‘credit claiming.’ First, the costs of retrenchment are concentrated, whereas the benefits are not. Second, there is considerable evidence that voters exhibit a ‘negativity bias,’ remembering losses more than gains. As a result, retrenchment initiatives are extremely treacherous” (1994, p. 18). Due to this “conservative welfare function” (Rieger and Leibfried 2003), benefits in most welfare states (with the exceptions of New Zealand and Switzerland) have been scaled back very little in OECD countries despite extended periods of neoliberal governance.

What welfare state reformers have been able to achieve is a tightening of eligibility criteria, moving away from the model of the welfare state as provider of benefits to persons unable to work and toward an activating welfare state that provides an incentive to work by targeting benefits (and/or providing more generous benefits) to persons working or actively seeking employment, while further decreasing the number of inactive citizens by scaling back employment and wage regulation and postponing the retirement age.

Many scholars have also criticized the welfare state for its focus on the male breadwinner and the attendant discriminating effects on social groups long denied equal opportunity in the labor market, such as women, ethnic minorities, and the disabled. Feminist scholars have called attention to the fact that such welfare-state subsidizing of the higher earner (breadwinner) in a family, particularly pronounced in conservative welfare states, reinforces the gendered division of labor within the family. Others have criticized citizenship requirements in many welfare state programs for their discriminatory effects on noncitizens, who are in most cases ethnic minorities.

TRENDS IN THE EARLY TWENTY-FIRST CENTURY

The most important developments affecting welfare states are not their internal dynamics but changes in their fiscal, economic, and societal environments. Over the past quarter century, deindustrialization has brought about a dramatic and enduring decline in the proportion of skilled middle-class workers, transforming many of them from employees who pay into the system into long-term unemployment beneficiaries—especially in the conservative welfare regimes of continental Europe, with their generous unemployment schemes.

At the same time as these costs have risen, since the 1990s economic globalization has given new credibility to threats by the owners of capital to leave countries that tax corporations and/or wealthy individuals excessively (Genschel 2005), placing strong external restrictions on the national welfare states to finance themselves through taxation. Further, as Jef van Langendonck (1997), Esping-Andersen (1999), and Peter Taylor-Gooby (2004) have shown, the demographic challenges of population aging and a vast increase in single-parent families have created new social risks which the traditional welfare state—based on the male breadwinner—was not designed to handle. As a result of these developments, most welfare states have experienced a decline in contributions and an increase in demand for benefits, posing a formidable challenge to their sustainability and suggesting the need for welfare state reforms to adapt to these new social conditions.

The main response to this second crisis of the welfare state since the late twentieth century has been privatization. Such privatization entails three principle shifts: first, from publicly guaranteed outcomes to defined contributions; second, from mandatory to voluntary provision against future risks; and third, from the group solidarity to the individual actuarial principle. Such privatization promises to lessen the fiscal burdens incurred by public social insurance schemes for the health and pension needs of the imminently retiring baby boom generation by increasing copayments and restricting eligibility and benefits, while simultaneously offering all individuals the opportunity to save individually for their future security needs via tax-deductible contributions to publicly regulated, individual private pension plans. This should also lessen the burden on corporations posed by the non-wage labor costs entailed in employer and employee contributions to public social-insurance schemes, increasing the international economic competitiveness of Western economies in the era of globalization. The biggest disadvantage of such privatization is that it necessarily entails a shift from universal to partial coverage of the population in need, with a tendency to exclude precisely those who need social protection the most, because they lack the surplus income required to voluntarily save for their and their families’ future risks. Finally, corporations, which have long provided tax-deductible employee benefit plans to their employees, have moved from defined benefit to defined contribution plans, i.e. from occupational pension plans which guaranteed a specific payout in retirement based on a formula for years of service and salary earned, to plans which collect employer and employee contributions in interest-bearing individual retirement accounts which are transferable from one job to the next, but may or may not suffice to meet—in combination with one’s public pension—a person’s retirement needs.

A final challenge to the welfare state at the outset of the twenty-first century is posed by immigration. As Wim van Oorschot (2000), Michael Bommes and Andrew Geddes (2000), Carsten Ullrich (2002), Knut Halvorsen (2007), and van Oorschot and Wilfred Uunk (2007) have shown, national solidarity communities that long provided the normative foundation for European welfare states are now being threatened by real and/or perceived increases in ethnic/national heterogeneity, as evidenced by political debates throughout western Europe in the first decade of the century. Regarding the United States, Korpi (1983), Martin Gilens (1999), and Veghte (2004) have argued that racial, ethnic and religious heterogeneity have always limited development of a solidarity community and hence a redistributive welfare state. Now, scholars such as Alberto Alesina and Edward L. Glaeser (2004) are asking if, as citizens increasingly tend to distinguish between “we” and “they,” the welfare consensus and commitment to publicly institutionalized solidarity in western Europe is still sustainable. Keith Banting and Will Kymlicka (2004) have determined, however, that clear evidence of a negative association between the influx of migrants and support for the welfare state is lacking. The structure of countries’ political institutions mediates and conditions the effects of immigration on welfare state development, and at the cross-national level other factors are likely more decisive. Nevertheless, as Leibfried and Mau (2007) observe, politicians may use ethnic and sociocultural divisions within a society to position themselves in public debates about distributional conflicts, leading to restrictive effects on welfare state policies.

While the threats from increasing immigration seem formidable, most welfare states are showing signs of successful adaptation to the challenges posed by economic globalization. Comparative research by Fritz Scharpf and Vivien Schmidt (2000) on the effects of globalization on Western welfare state development has revealed that welfare regimes differ in their capacity to adjust to the fiscal and competitiveness constraints constituted by increasing global product and capital market integration. Social-Democratic and liberal welfare regimes in Scandinavian and Anglo-American countries respectively, though fundamentally different, have proven better suited to successful adaptation to the challenges of economic globalization than have the conservative welfare regimes of continental Europe.

Moreover, Elmar Rieger and Stephan Leibfried (2003) argue convincingly that strong welfare states will not only survive the era of globalization, but have themselves historically paved the way for it. Since World War II (1939–1945) and continuing under conditions of intensified economic globalization since the 1990s, strong welfare states have provided political leverage in capitalist democracies such as Germany for leaders to embrace exposure to the risks of international competition in foreign economic policy, whereas countries with weak welfare states such as the United States have tended toward protectionism. As Sven Steinmo (2002) has shown, the Swedish case in particular demonstrates that a generous welfare state, with some recalibration over the past decade, can co-exist over the long term with a thriving, open and internationally competitive national economy.

A half century ago, one of the fathers of modern social policy, the Swedish Nobel prize-winning economist Gunnar Myrdal (1898–1987) argued that a transition from the welfare state to a “welfare world” would eventually transpire. Today, a budding field of welfare state research—pioneered by Deacon, Michelle Hulse, and Paul Stubbs (1997); Nicola Yeates (2002); Lutz Leisering (2004); and John Meyer (2004); and pursued in the journal, Global Social Policy (launched in 2001)—traces the emergence of “global social policies” emanating from supranational and global nongovernmental organizations and governmental institutions such as the ILO, World Bank, World Trade Organization, or United Nations. At the crossroads of the “world society,” international relations, welfare state and area studies literatures, this research examines how welfare concepts, programs, and models are becoming globalized.

Many eminent welfare state scholars, however, such as Abram de Swaan (1997), Claus Offe (2003), Fritz Scharpf (1999, 2002), and Wolfgang Streeck (1995, 2000), are skeptical concerning the prospects of transnational social policy. Historically, as Stein Rokkan elaborated in his seminal 1974 essay, welfare states have developed in the wake of processes of state-building, nation-building, and democratization, that is, in democratic nation-states. This process took several centuries to evolve and was a rocky road paved by multiple wars and, in many countries, revolutions. Transnational social policy is unlikely to develop until something equivalent to the public sphere and solidarity community of the nation-state evolves on the transnational level, that is, a shared willingness to redistribute income across national boundaries.

The closest thing to such a transnational polity and solidarity community on the horizon is the European Union, formerly the European Community. For the first four decades of its existence, the European Community pursued economic integration without political or social integration. Since the last decade of the twentieth century, however, the European Union is slowly but discernibly moving toward such political and social integration, yet, as Franz-Xaver Kaufmann (2001) has noted, continues to evince a strong reticence with regard to all issues of interpersonal income redistribution. Leibfried (2005) and Obinger, Leibfried, and Castles (2005) observe that rather than employing centrally administered, mandatory, redistributive “hard” social policies, as national welfare states had done, the European Union has relied thus far on courts and markets and on “soft policy,” that is, governance measures with which compliance is not enforced by legal sanctions, but simply encouraged through the “open method of coordination.” As Leibfried and Mau (2007) have observed, beyond its borders Europe is the leading advocate of transnational social policy as propagated by global institutions such as the WTO, the WHO, and ILO, and may one day serve as an organizational model inspiring for example the NAFTA, MERCOSUR and ASEAN countries to pursue transnational social policies in their respective regions. The debates on the evolution of European social policy can be followed above all in the Journal of European Social Policy (since 1991) and increasingly in the Journal of European Public Policy (since 1994), which explores the interaction between central and nation-state social policy in the European Union.

SEE ALSO Beveridge Curve; Conservatism; Democracy; Family; Globalization, Social and Economic Aspects of; Great Depression; Hitler, Adolf; Income Distribution; Insurance; Liberalism; National Health Insurance ; Nazism; Political Science; Recession; Risk; Socialism; Welfare; World War II

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Veghte, Benjamin, Greg M. Shaw, and Robert Y. Shapiro. 2007. Social Policy Preferences, National Defense and Political Polarization in the United States. In Social Justice, Legitimacy and the Welfare State, eds. Steffen Mau and Benjamin Veghte, 145–168. Aldershot, U.K.: Ashgate.

Weir, Margaret, Ann Shola Orloff, and Theda Skocpol, eds. 1988. The Politics of Social Policy in the United States. Princeton, NJ: Princeton University Press.

Wilensky, Harold L. 1975. The Welfare State and Equality: Structural and Ideological Roots of Public Expenditures. Berkeley: University of California Press.

Wilensky, Harold L. 2002. Rich Democracies: Political Economy, Public Policy, and Performance. Berkeley: University of California Press.

Yeates, Nicola. 2002. Globalization and Social Policy: From Global Neoliberal Hegemony to Global Political Pluralism. Global Social Policy 2 (1): 69–91.

Benjamin W. Veghte

Welfare State

The industrial revolution

Birth of the welfare state

Program of the welfare state

New directions

BIBLIOGRAPHY

The welfare state is the institutional outcome of the assumption by a society of legal and therefore formal and explicit responsibility for the basic well-being of all of its members. Such a state emerges when a society or its decision-making groups become convinced that the welfare of the individual (beyond such provisions as may be made “to preserve order and provide for the common defense”) is too important to be left to custom or to informal arrangements and private understandings and is therefore a concern of government. In a complex society such assistance may be given to the individual directly or, just as often, to the economic interest most immediately affecting his welfare. The rubric is a relatively recent one not to be found in the traditional political lexicons, so that the point at which a state, in expanding social services to its citizens, earns this label is imprecise and controversial. The terms “basic security” or “well-being” have been and will be construed variously, and the interpretation of welfare is in flux—especially in the United States. In short, an account of the welfare state must struggle with a large legacy of ambiguity.

Every society, preliterate no less than literate, makes some provision for those of its members who find themselves in distress. In the case of aborigines such provision is almost exclusively assumed by so-called primary groups: the family or other kinship groups, or neighbors rallying spontaneously to aid the victims of calamity. Among primitive peoples, aid to the needy may be a by-product of other institutional arrangements, but it is often related to well-defined ideals of generosity and charity. Thus, among the Eskimos, although the hunter enjoys an absolute right to the game he kills, it is taken for granted that he will share it with his needy neighbors. Among the Australian aborigines, on the other hand, sharing the quarry is not left to the discretion of the hunter but is governed by rigid kinship rules which give elder relatives an inviolable claim to a portion of the kill. In a study of the east African Baganda, John Roscoe said that “no one ever went hungry …because everyone was welcome to share a meal with his equals,” and he observed, possibly with some exaggeration, that among nonliterate peoples existing on the subsistence margin “it is generally the rule that when there is not enough, all hunger alike; when there is plenty, all participate” (quoted in Herskovits [1940] 1952, p. 31).

As society becomes more complex, responsibility for helping the distressed may be assumed by the ruling authority, if only as when the government of Rome pacified the rabble with “bread and circuses,” or by ecclesiastical agencies, as in the case of the Roman Catholic church during the Middle Ages, or by guilds, fraternities, and similar associations. For many centuries, the church in Europe, heeding the words of Jesus and the earlier words of Amos in praise of charity and kindness to the poor, assumed a major responsibility for the relief of human suffering. It established hospitals, orphanages, and (to a lesser extent) poorhouses, sometimes made outright gifts and loans, and even sheltered travelers. The work of such orders as the Alexian Brothers, who buried the poor, the Order of St. Lazarus, whose members cared for lepers, and the Knights Hospitalers, who supervised hospitals, was typical. In England, the dispossession of the monasteries and the breakup of the manors forced the state to assume the burden. Thus, a law of 1572 provided for collectors and overseers to compel heretofore voluntary payments for poor relief. Subsequently, the famous Elizabethan “Old Poor Law” of 1601 definitely accepted the principle of state responsibility for care of the needy, frugal though the provision may have been. Also, it levied a specific tax for poor relief and established categories of need. Even so, throughout this period the real burden of responsibility continued to fall on the family and the village community until the industrial revolution and the developments associated with it drastically transformed the prevailing pattern throughout Europe and America. England in the last decades of the eighteenth and the start of the nineteenth century provides the classic example.

The industrial revolution

Industrialization and the shift of population from the countryside to the city, hastened in England by the enclosure acts, greatly weakened primary groups. Many functions such as food preparation, recreation, and education, once exclusively performed by the family, were increasingly taken over in industrialized urban areas by other agencies. Today, in the city, almost everything used by the family is made outside the home. It has become increasingly difficult for elders and children to contribute to the support of the family group, as was the case in a rural agrarian society. At the same time the growth of a secular outlook has undermined traditional notions governing separation and divorce and has resulted in the breakup of an increasingly larger proportion of marriages. Accordingly, the enduring patriarchal family of tradition, often embracing three generations and assorted collateral kin, has become a two- and more often a single-generation group, when it has not broken up altogether. During the very period when the number of aged has rapidly multiplied, the family has become less and less available for their maintenance, not to mention the problem of care of the handicapped and of the casualties of broken homes. Meanwhile, the same period that has witnessed a declining role for the family has also seen the increased mobility and impersonality of city life loosening the once-close ties binding neighbors together.

Quite apart from its impact on primary groups and their role in providing for those handicapped by old age or other physical disability, the industrial revolution brought into new prominence the class of so-called “able-bodied poor.” Whether in the Soviet Union and Communist China today or in England and America in the nineteenth century, capital accumulation on a scale necessary to generate rapid and continuing industrialization can be achieved only at the expense of the level of living of the average worker-consumer. If worker-consumers are incapable of effective resistance, either politically through the exercise of meaningful suffrage or economically through strong labor unions, the sheer pace of industrialization is bound to produce widespread poverty. Such recourses were not available in England or America in any realistic sense for much of the nineteenth century—hardly more than they are available today in the USSR and in China. To be sure, poverty among the “sturdy poor” was hardly strange to the Elizabethan, but the industrial revolution expanded their number and concentrated them in cities, where they were largely excluded from opportunities to supplement their income.

At the same time the industrial system exacerbated the kind of dependency that results from enforced idleness. Quite apart from cyclical unemployment, the supply of labor in industrialized America and Europe, except during periods of war and war preparation, has generally exceeded the demand, thereby not only depressing the wages of those who work but also creating forced idleness and dependency. When to this and the “frictional” unemployment attendant on the operations of any complex economy has been added the mass unemployment generated by fluctuations of the business cycle (cyclical unemployment), the problem of care for the needy has taken on new and impressive dimensions. Unlike earlier societies in which distress was brought about by crop failures and other unavoidable disasters, or by chronic shortage of resources, distress was now caused by institutional arrangements that conspired to keep people from using their creative energies and conjoined depressed wages with a rising level of expectations. It was in such fertile soil that the welfare state germinated.

However, rationalizations were promptly devised that condoned unemployment and poverty and argued against intervention by government. The unemployed were held to be lazy and shiftless, traits considered inborn and to be overcome only by the spur of need or the bribe of generous profits. The poor were improvident and unenterprising; poverty was a punishment for sloth and incompetence. Tampering with the verdict of the free market on the compensation that individuals receive by providing them with income when they are ill, or old, or unemployed would sabotage the only mechanism available for proportioning reward to merit. Truly productive and enterprising people would be penalized in order to provide for drones, and the inevitable outcome would be reduced productivity and less for all. If the syllogisms of economists failed to drive these points home, it was always possible to invoke the authority of theologians to show that poverty was a punishment for wickedness and wealth a reward for virtue and hence, as Max Weber has said, to provide “the comforting assurance that the unequal distribution of the goods of this world was a special dispensation of Divine Providence, which in these differences, as in particular grace, pursued secret ends unknown to men” ([1904-1905] 1930, p. 177). When to this was added the weight of Malthus and the new demography and, later, the teachings of social Darwinism, the case seemed overwhelming— at least to prosperous merchants and manufacturers—that the poor must be left to private charity if not to their own devices.

Such views were expressed with varying degrees of eloquence by a large number of writers, from Daniel Defoe (Giving Alms No Charity, and Employing the Poor, a Grievance to the Nation, 1704), Bernard Mandeville (Fable of the Bees: Or, Private Vices, Publick Benefits, 1714), and Arthur Young (Farmer’s Tour Through the East of England, 1771), through Spencer (1850) and Dicey (1905), down to Calvin Coolidge. Despite such misgivings, however, there was general agreement that public aid must be given. But it must be meager and it must be dispensed in a manner so humiliating to the recipient that, if able-bodied, he would accept work no matter how odious the conditions. And conditions in the nineteenth century, even after the passage of numerous factory acts, were indeed odious. For those unable to find employment, workhouses had been established in England as early as 1576, and these were retained, along with alms-houses for the infirm and the practice of apprenticing and indenturing needy children, under the Elizabethan Poor Law of 1601. Such workhouses and almshouses, as Dickens’ Oliver Twist reminds us, were grim beyond description, resembling jails more than havens of mercy. The severity of such provisions was slightly relaxed during a period when the English feared that French revolutionary ideas might leap the Channel, and in 1795 the so-called Speenhamland system actually provided for minimum subsistence by giving workers whose pay fell below a subsistence level an allowance from the public treasury with an added allowance for each child. But the “New Poor Law” of 1834, which sought to reduce the mounting outlay for poor relief and prevent the spread of pauperism, revived the old austerities. Its harsh philosophy, an outcome of the wedding of Benthamite utilitarianism and Manchester economics, dominated English and American policy until the twentieth century.

Birth of the welfare state

The philosophy of the welfare state is a wholly different one. Poverty and dependence are no longer regarded as evidence of personal failure. Quite apart from the physically disabled, workers who are underpaid and unemployed or intermittently employed are considered to be impoverished through no fault of their own. Where the supply of labor nearly always exceeds the demand and opportunity is unevenly distributed, it is held that the free market fails in a vast number of cases to proportion reward to merit. As the wealth created by modern industry increases it is contended that there is enough to assure everyone, including the physically and mentally handicapped, of adequate support without unfairly penalizing or impairing the initiative of the talented and enterprising. An income large enough to provide the basic necessities of life in adequate measure is regarded as the right of every member of society. If anyone’s income falls short, it should be supplemented not as an act of charity but as an act of social justice.

It is conceded that shiftlessness and irresponsibility are common, but these are said to call, in great measure, for the approach of the physician who cures an illness and not the judge and jailer who punish a crime. Indeed, crime itself, like poverty, is regarded in the welfare state largely as a remediable outcome of personal and social disorganization rather than as an ineradicable manifestation of original sin. Finally, advocates of the welfare state contend that the price of widespread deprivation in an era of rising expectations is social instability on a scale unknown to preindustrial societies, where poverty was inescapable and therefore taken for granted; and they argue that such expectations can be frustrated, if at all, only by jettisoning democracy itself.

Such is the general orientation of what has also been called the social service state. However, the welfare state was not transferred fully delineated from the blueprints of social architects to the soil of England, continental Europe, and the United States. Its career varies with each country.

In England it was born of efforts to curb the abuses of the factory system and to improve penal institutions and outdoor relief. But efforts to humanize the factory system and to liberalize the provisions of the Poor Law of 1834 seemed increasingly like mere tinkering with particular grievances. A new age of humanitarianism was dawning, more sensitive to human suffering than its predecessors. Enfranchised and increasingly well-organized workers clamored for substantive reform. Historic surveys such as Charles Booth’s Life and Labour of the People in London (see Booth et al. 1889-1891) and B. S. Rowntree’s Poverty: A Study of Town Life (1901) documented the presence of dire poverty on a vast scale in the “workshop of the world.” Finally, in 1905, prodded by widespread unemployment, Britain undertook a comprehensive examination of the administration of its poor laws. The Royal Commission on Poor Laws and Relief of Distress set up to make the investigation is famous for the report of its minority, led by Beatrice Webb. Among other things, this report proposed the abolition of Britain’s archaic poor laws and the substitution of a comprehensive program of social insurance (Webb & Webb 1909). This recommendation, along with his own impression of the new German program of social insurance, contributed to David Lloyd George’s historic decision to sponsor the program of unemployment and health insurance subsequently contained in the National Insurance Act of 1911. This legislation, prepared in large part by William H. Beveridge, chief architect of the welfare state in the English-speaking world, embarked Great Britain on the program which has since been expanded to provide insurance for all its people “from the cradle to the grave.” The famous Beveridge report of 1942 and the National Health Service and National Insurance acts of 1946 were milestones on the way. Today, in Australia and New Zealand as well as in Great Britain, a basic program of social security is taken for granted by all parties, and, apart from details, is no longer subject to debate.

The evils of industrialism were felt more tardily in Germany and the remedies applied more promptly. A national system of social insurance was instituted by Bismarck as early as the 1880s. Intent on combating the appeal of Marxian socialism, perceiving that a healthy, contented working class would make for a stronger Germany, and anxious that German workers identify themselves with the state, the Iron Chancellor, appropriating the ideas of economists like Adolf Wagner and Gustav von Schmoller, introduced the compulsory feature into social insurance and applied it to the whole German nation. The program was expanded after World War I to include unemployment as well as old age and heajth insurance. Austria, the Scandinavian countries, the Low Countries, and, finally, France and Italy all followed suit.

By the 1930s only the United States, among the nations involved in the industrial revolution, was without a comprehensive program of social security. Its great wealth, its polyglot population, its expanding frontier which provided a built-in safety valve, and a governmental system of checks and balances that discourages decisive social action except during periods of emergency all conspired to defer basic reform. It required the great depression, which forced millions of willing workers into prolonged idleness and posed the glaring paradox of mass deprivation in the midst of potential abundance, to goad the country into action.

The resulting program, developed over a period of years, has been directed in the United States, as elsewhere, at the major causes of insecurity: (a) inadequate income for those who work; (b) disabilities resulting from accident, sickness, youth, old age, widowhood, and motherhood; and (c) unemployment.

Program of the welfare state

Raising worker income. Improvement of income may be brought about either by increasing the amount of goods produced or by a more equitable distribution of the available supply of goods. Given glaring inequalities of income, the first concern of the welfare state in its initial phase has been to achieve distributive justice. Government action may accomplish this (1) by expanding the number of public services; (2) by a progressive tax system and a variety of taxes levied on employers for the benefit of their employees; (3) by facilitating the growth of a strong labor movement enabling workers to bargain on equal terms with their employers and a consumer movement enabling buyers to bargain more effectively with sellers; (4) by means of minimum-wage legislation.

Expansion of public services. Obviously, real income is increased when society provides free services such as education, recreation, and housing to those who would otherwise not have access to them. In some circumstances free commodities (for example, surplus crops, free school lunches) and even free land may be provided (for example, the U.S. Homestead Act of 1862). It must be emphasized that where a direct transfer of real values is involved, the philosophy of the welfare state construes distributive justice not merely as dictating such a transfer but as requiring it without reference to the income of the recipients and as the fulfillment of a social obligation. Means tests are anathema to the welfare state. The United States is the only industrialized country which fails to include one of the most basic services, namely, medical care, among those provided for on this basis. As our cities fall victim to the arteriosclerosis produced by overuse of the automobile, the welfare state may find it economical as well as humane to include free public transportation. Conceivably even free architectural services may one day be added to the list as the only way to encourage the use of good design in our buildings and dwellings and thereby to rescue cities from ubiquitous ugliness.

Progressive tax systems. One of the earlier devices for effecting a redistribution of income was the use of a progressive tax system, made possible in the United States by the adoption in 1913 of the sixteenth amendment to the constitution. To be sure, the extent to which income and inheritance taxes have operated in this country to effect a change in the distribution of incomes has been a subject of much debate. There are some who contend, as did P. J. Strayer, that “current practices are so bad as to seriously weaken the income tax as a means of income redistribution” and that “as now applied the individual income tax is not as effective an instrument of income redistribution as generally believed” (1955, pp. 430-431).

Although adoption of a progressive tax is in principle a major modification of the traditional system of property rights, clearly it must have rigorous and consistent application to be meaningful. Such application is most closely approximated in the Scandinavian countries and Great Britain, less so in the United States, and even less so in Italy—which may well be a significant factor in the popularity of communism south of the Alps.[see Taxation.]

Labor and consumer legislation. Legislation encouraging collective bargaining as a factor in influencing the distribution of income consisted initially of removing the legal bans and disabilities imposed on labor unions during the period of Hochkapitalismus and, later, as in the United States, of requiring employers (engaged in interstate commerce) to bargain collectively with employees through unions of their own choosing. Such a requirement was embodied in American labor’s Magna Charta, the National Labor Relations Act of 1935. The American consumer movement, although it has received some legislative encouragement, lags far behind consumer organizations elsewhere. This may help to account for the inability of welfare advocates in the United States to protect consumers more effectively from food and drug adulteration, mislabeling, deceptive packaging, and the like.[see Labor union.]

Minimum-wage legislation. Perhaps the most drastic departure from traditional economic practice has been the adoption of minimum-wage legislation. Certainly, the Fair Labor Standards Act of 1938, since amended to include virtually all American workers and to raise the hourly minimum, took the United States a long way in the direction of the welfare state.[see Wages,article on Wage and hour legislation.]

The productivity debate. When all such devices have been enumerated it must be made clear that the limiting factor in any redistribution of incomes is the point at which initiative and enterprise are discouraged with resulting loss in productivity. The point at which such discouragement occurs is a subject of vigorous debate between partisans and opponents of the welfare state. That there is such a point, varying with each historical situation, will readily be granted; but advocates of the welfare state will argue that there is no constant called “human nature” by reference to which the issue can be settled. They will add that in the United States, where in the boom year of 1947 the top one-tenth of the population received a larger share of the national income (33 per cent) than the lowest six-tenths, the point is still far from having been reached.

The issue is relevant because it directs attention to productivity as a variable in determining adequate compensation. Advocates of the welfare state have come to give far more attention than heretofore to the question of productive potentiality, calling attention, for example (as critics of the welfare state rarely do), to the glaring gap between the productive potentialities of the American economy and the size of its gross national product. They have increasingly stressed the need for measures to expand production, since the social implications of such measures are likely to be far less explosive than a redistribution of incomes.[see Productivity.]

Aid to the disabled . The measures taken to provide more adequately for those who work are only partly applicable to those who are unable to work by virtue of physical disability. The disabled fall into two major groups: those who are too handicapped ever to have earned a livelihood, such as children, the mentally disturbed and defective, the blind; and those who, although disabled, have had a record of earned income.

The welfare state provides direct grants for the adequate care and support of the first group and, where appropriate, stresses rehabilitation—as earlier programs did not. Categories of need are carefully distinguished and programs of help systematically differentiated according to category— a striking contrast to the days when the mentally disturbed were thrown together with the old, the sick, the blind and lame, and even mothers and young children, in the same institution. In the United States, aid to the disabled is accomplished imperfectly through a combination of federal, state, and local aid, federal participation on a large scale having first been made possible by the Social Security Act of 1935. That act, like the National Labor Relations Act of 1935 and the Fair Labor Standards Act of 1938, is one of the four cornerstones of the evolving welfare state in the United States.

The second group, those disabled people with a record of earnings, must face the double threat of the loss of earning power and the cost of care, in the event of old age, accident (occupational or other), and illness. Compulsory social insurance has become the classical means for meeting their needs. This device applies the principle that society must set aside, and require its members to set aside during the periods when they are gainfully employed, small sums of money to provide against expected or unexpected future disability. Payments and benefits usually vary, at least up to a point, with the amount of earnings of the insured. In some cases the provision is for the cost of care (as with the victims of illness or industrial accident), in others for the loss of earnings (as in the case of federal help to the aged in the United States). A mature welfare state would provide for both.

The first application of the principle of compulsory social insurance in the United States was in connection with industrial accidents, the frequency of which may be suggested by the fact that American workmen in peaceful employment suffered more casualties during World War i than were suffered by the American Expeditionary Force. Initially regarded as part of the risk a workman assumes when he accepts employment, the cost of industrial accident insurance is now generally regarded as part of the cost of production and charged against employers. The cost of old-age and health insurance is generally distributed between employer and employee (many categories of self-employed are also now included), although in some instances contributions are made by the government as well.[see Aging, Medical care, article on Economic aspects..]

Unemployment and the welfare state. The welfare state concerns itself not only with securing an equitable income for those who are employed and with caring for those who are incapable of employment: it also addresses itself to the problem of those who are able to work but prevented from doing so by forces over which they have no control. In such cases it is customary to distinguish between frictional unemployment and cyclical unemployment. When cyclical unemployment becomes acute it is generally called mass unemployment.

Frictional unemployment was defined by William Beveridge as “unemployment caused by the individuals who make up the labour supply not being completely interchangeable and mobile units, so that, though there is an unsatisfied demand for labour, the unemployed workers are not of the right sort or in the right place to meet that demand” ([1944] 1945, pp. 408-409). Workers may be displaced by a labor-saving device or a device they are not trained to use, because of climatic conditions or seasonal fluctuations in the market (seasonal unemployment), because of a disagreement with the employer concerning the conditions of work, because of the failure of the enterprise in which they are employed, or because they are in transit from one job to another. They are victims of frictional unemployment. Such unemployment, although it can be reduced to a bare minimum, as U.S. wartime experience has shown, is unavoidable and may involve about 2 per cent of the work force. In a populous society like that of the United States, with a work force of over 70 million, this can involve a great many people.

In the prewelfare period the victims of frictional unemployment were largely left to their own devices or forced to seek public or private charity. Today, in every economically developed country, since Bismarck introduced “socialism from above” in Germany, the problem of frictional unemployment is in the main met by compulsory unemployment insurance. In the United States such insurance was largely unavailable until it was incorporated into the Social Security Act of 1935.

However, as has often been pointed out, while unemployment payments may solve the problem of want, the problem of enforced idleness with all of its demoralizing consequences remains. Measures must therefore be taken to facilitate the re-employment of displaced workers by retraining them for work suited to their abilities, by providing adequate counseling services, and by setting up unemployment offices. All these are part of the armory of the welfare state.

Traditionally, frictional unemployment has been regarded as unemployment of short duration. Recently, increasing attention has been given to “hardcore” or “prosperity” unemployment, sometimes described as prolonged frictional unemployment and more technically called “structural.” Structural unemployment involves workers who are made jobless not as a result of recessions or depressions but by large-scale changes in technology, shifts in consumer taste, and the development of new products. It may also refer to changes in the composition of the labor force: large-scale additions of younger workers, resulting from continuing population growth; of older workers, resulting from an extension of the life span; of female workers; or of previously excluded members of minority groups. Such structural unemployment is not associated with fluctuations in the business cycle and is therefore called “secular.” However, to the extent that it is not only more prolonged but potentially much more widespread than frictional unemployment, structural unemployment must be regarded as a form of mass unemployment, so that, like cyclical unemployment, it must ultimately exhaust the resources of even the most generous unemployment insurance system.

Beyond this, advocates of the philosophy underlying the welfare state contend that the etiology of structural unemployment is more akin to cyclical than to frictional unemployment. Frictional unemployment is largely unavoidable and we can only palliate its consequences. On the other hand, the structurally unemployed are out of work for the same reason that the cyclically unemployed are without work: not because they are intrinsically unemployable but because there is not enough effective demand for their services; the economy does not function at a sufficiently high level to utilize all its manpower. Thus, Walter W. Heller, former chairman of the Council of Economic Advisers to the President, in hearings before the Senate Committee on Labor and Public Welfare, declared:

Some have attributed the growth of unemployment in recent years to changing characteristics of the labor force rather than to deficiencies in total demand. According to this view, the new unemployment is concentrated among workers who are intrinsically unemployable by reason of sex, age, location, occupation, or skill…. The facts clearly refute this explanation of the rise of unemployment over the last 8 years…. There is no evidence that hard-core unemployment has been growing as a percent of the labor force. (U.S. Congress …1961)

The difference cited by Heller is crucial, for, if he is correct, it must follow that the welfare state cannot afford to limit itself to concern with the effects of structural unemployment but, as with cyclical or mass unemployment, must address itself to causes.

For these reasons and because neither direct relief, nor insurance benefits, nor any welfare program thus far cited can cope with the effects of mass unemployment, whether it be secular (structural) or cyclical, advocates of the welfare state have taken the position that, in the words of Beveridge’s now famous Full Employment in a Free Society,“It must be a function of the State … to protect its citizens against mass unemployment, as definitely as it is now the function of the State to defend the citizens against attack from abroad and against robbery and violence at home” ([1944] 1945, p. 29). Among American economists, Alvin H. Hansen, in his Economic Policy and Full Employment, has taken the lead, declaring that if “the right to free land was the watchword of economic opportunity a hundred years ago, so the right to useful, remunerative, and regular employment is the symbol of economic opportunity today” and adding that “the full-employment program today …involves elemental human rights … so long as 80 to 90 percent of the population cannot earn a livelihood except by getting a job” (1947, p. 16).

It was such reasoning that inspired the white paper on employment policy produced in 1944 by Britain’s wartime coalition government and, in the United States, the historic Employment Act of 1946 (Public Law 304, 79th Congress). That act, the fourth cornerstone in the welfare edifice of the United States, goes well beyond the British white paper, stating:

[It is] the continuing policy and responsibility of the Federal Government to use all practicable means …to promote maximum employment, production, and purchasing power [and] to coordinate and utilize all its plans, functions, and resources for the purpose of creating and maintaining, in a manner calculated to foster and promote free competitive enterprise and the general welfare, conditions under which there will be afforded useful employment opportunities, including self-employment, for those able, willing, and seeking to work. (Declaration of Policy, sec. 2)

While the legislation sets up no actual machinery for combating unemployment and a great deal of exegetic skill has been expended on the words “maximum employment, production, and purchasing power,” the measure, inspired by postwar fears of a return to mass unemployment, is a remarkable commitment—all the more so in that Senate Republicans, led by Robert A. Taft, joined Democrats in making it. Traditionally, mass unemployment has been regarded as akin to a natural disaster to be waited out in storm cellars as one sits out a tornado. The Employment Act of 1946 assumes that mass unemployment can be averted and declares this to be the responsibility of government.

The logic of this commitment has led almost inescapably to an acceptance of fiscal and monetary policy as essential to economic recovery and hence as integral to any basic welfare program. Thus, over the edifice of the welfare state there hovers the presence of John Maynard Keynes, whose General Theory of Employment, Interest and Money (1936) has been the Bible of the great majority of depression and postdepression economists and policy makers. To be sure, Bibles, whether in the version of St. James or St. John (or St. Karl) are subject to revision in the Western world. But Keynes’s bold rejection of the classical thesis that depressions are self-correcting if wages are allowed to sink; his perception of the relation of wage rates to effective demand; his recognition of the role of fiscal policy, in particular deficit spending, in correcting economic contraction; and above all, his theory of secular stagnation, which calls attention to the tendency of a developed capitalist economy to find equilibrium at a level of underemployment in the absence of adequate fiscal policy—all this endures and has become part of the Western philosophy of the welfare state.

New directions

Such are the outlines of the welfare philosophy inspired by the crudities of primitive capitalism and the agonies of the interbellum depression. But that philosophy is not a fixed one, and in the mid-1960s new emphases were already discernible.

In the first place, the welfare state in its present outline bears the mark of its origins in the needs of the poor and oppressed. Especially in the United States, the reforms that ushered in the welfare state were a product of the 1930s and therefore concentrated on the pressing and urgent problems. The energies of reformers were absorbed in finding remedies for mass deprivation and mass unemployment. Security against want is still an unrealized goal in America. In the richest nation in all history the annual income of almost twenty million families falls below the $4,000 that the Bureau of Labor Statistics estimated in 1959 as necessary for an urban family of four to maintain an adequate standard of living.

However, the “War on Poverty” launched by the Economic Opportunity Act of 1964, although it has yet to score impressive victories, employs imaginative stratagems, such as Project Head Start, VISTA (Volunteers in Service to America—a domestic version of the Peace Corps), community action programs. Increasingly, proposals are heard for cash subsidies in the form of a “negative” or “reverse” income tax. A blue-ribbon national commission has urged that the federal government become the employer of last resort for the hardcore jobless and guarantee a minimum annual income for every American family.

As welfare programs, new and old, mitigate the more extreme forms of suffering, architects of the welfare state are increasingly thinking in terms of the acute problems directly threatening society as a whole—the prosperous as well as the poor, whites as well as Negroes, the native born as well as the immigrant. Uniquely in human history, Americans have been evacuating their cities not because there is an invader at the gates but because they are less and less viable as communities in which to work and raise families. And, as William H. Whyte, Jr., has pointed out, even if our cities were less afflicted with blight, congestion, and the other maladies lately christened “metropolitan problems,” large numbers of families in the middle-income group now ineligible for public housing cannot afford new housing in urban areas. The urban problem, the minority crisis in the United States, automation, the challenge posed by the accelerating growth rate of the Soviet Union and the rising expectations of underdeveloped nations, all present problems which directly concern modern society as a whole. To the extent that the welfare state concerns itself with them it will lose its class orientation, and social welfare will come more and more to mean that general welfare from which it has been distinguished in the past.

A second, not unrelated change of emphasis in the philosophy of the welfare state is also discernible, at any rate as far as the United States is concerned. It is clear to advocates of the welfare state that economic security can now be made available to all Americans without a socially explosive redistribution of wealth. The technology and natural resources for producing such abundance are available, and economists are now (as they were not in the 1930s) in sufficient command of their science to use fiscal and monetary policies so as to achieve optimum production. The problem is a political one involving the will to do what can be done. Once this will is exercised, a different kind of problem will increasingly confront the welfare state. It concerns not the quantity of goods but the kind of goods we produce. Ultimately it concerns the quality of life in the good society. As recently posed by John Kenneth Galbraith, it involves the order of priorities by reference to which we allocate our human and physical resources.

It is Galbraith’s contention in The Affluent Society (1958) that the prevailing pattern of resource allocation in the United States is biased so that basic needs are grossly neglected and that this bias is not decreed by the so-called sovereign consumer. The American economy is geared, it is said, to the satisfaction of artificially induced consumer wants, such as oversized automobiles restyled annually at a cost of about $1 billion; attire, also restyled annually, which by the decree of a cabal of manufacturers can be made antiquated almost overnight; newly styled household appliances that are no better than the ones they replace unless the older models have been underengineered; countless gadgets, from electric can openers to push-button car windows; and an array of deodorants, skin softeners, hair growers, and wrinkle removers that even a race of Sybarites would scorn. In 1959, $11 billion worth of advertising, not to mention the cost of other forms of high-pressure salesmanship, was spent to persuade consumers that they should have these things.

Meanwhile, basic needs in many areas have been neglected in the name of economy. In the mid-1960s, education required an investment of more than $5 billion; medical care was short one million new hospital beds; public health needed measures for purification of air and water and restoration of sewage disposal systems. There were also basic needs for support of the arts and humanities; for at least a token investment of, say, $40 million in educational television stations, which a congressional committee declared Americans could not afford—while they were spending about $300 million on chewing gum; for additional funds for basic research in the biological sciences; and so on.

In the 1930s Keynes, preoccupied with increasing production, could write that he saw no reason to suppose that the existing system “seriously misemploys the factors of production.” It seems likely that the welfare philosophy of tomorrow (if not of today) will charge that, on this score, Keynes falls short. Such a philosophy, if it is also democratic, will categorically reject the idea that a few elected officials may compel others to spend their incomes in one way rather than another; it will simply insist that conditions be provided which enable consumers when they make purchases, and citizens when they vote taxes, to make more rational decisions. Such conditions would no doubt include a commission on national goals having access to the most expert opinion and empowered to hold hearings and sponsor conferences at all levels, national, regional, and local. It would also be empowered to use the formidable resources of television (including prime time) on a grand scale to acquaint citizens en masse with the condition of their schools, hospitals, housing, parks, streams, etc., and with the economic as well as the social cost of neglecting them, not to mention the cost of overburdening and underpaying teachers, probation officers, hospital attendants, and others. Additional conditions might include better controls over advertising and, in the political sphere, a reorganization of the legislative branches of the government at all levels, which might prevent small, strategically placed committees from obstructing the will of large legislative majorities.

Clearly, these are concerns far removed from the humiliations of the almshouse and the degradations of the early factory system, against which the welfare state in its first phases was an institutionalized protest. That is to say, these conditions are removed from the exclusive preoccupation with minimal security that has largely dominated the welfare state. But they appeal to the same kind of social conscience and enlist the same sense of social justice.

The welfare state, whether as thus prefigured or in its present form, invites widely differing appraisals, especially in the United States. Its critics regard it as the omnicompetent state, pre-empting the private efforts through which individuals achieve moral stature by helping each other; sapping initiative; coddling the inferior; and ultimately regimenting everyone. The Soviet Union provides security and all the social services for its citizens; it is also a barracks state. So runs the argument.

Apologists for the welfare state in the free world, less optimistic about the possibilities of achieving Utopia than nineteenth-century reformers and more alert to the hazards of statism since the rise of modern totalitarianism, insist that the welfare state not only leaves ample room for self-help and for what businessmen in the United States call “welfare capitalism”: it ultimately encourages creative initiative and promotes freedom by banishing fear, by minimizing suffering, and by reducing class and other antagonisms. They argue also that the welfare state is quite compatible with an economic system in which free enterprise plays a central role, although they may differ among themselves concerning whether the welfare state should limit itself to compensating for the imbalances and minimizing the frictions to which a free economy is inevitably subject, or seek positively to advance general prosperity and happiness.

Meanwhile history has rendered a verdict concerning the tendencies of the welfare state, partial (in a double sense) though historical verdicts always are. That verdict may be found by looking to the Soviet Union and its regimented people. But it may also be found by turning to the Scandinavian countries, to Great Britain, to West Germany, to Australia and New Zealand, and to the United States. It would be difficult to charge that the peoples of these countries are regimented or that private enterprise does not enjoy a flourishing life of its own even in the most “socialistic” of them. In any event, there are no signs, outside of marginal groups mostly centered in the United States, of a disposition to curb the welfare state. It rides the wave of the future.

Harry K. Girvetz

[See alsoCapitalism; Leisure; Philanthropy; Planning, Social, article onwelfare planning; Poverty; Public policy; Regulation of industry; Socialism; and the biographies ofBentham; Beveridge; Brandeis; Hansen; Keynes; Webb, Sidney andBeatrice.]

BIBLIOGRAPHY

Armstrong, Barbara N. 1932 Insuring the Essentials: Minimum Wage Plus Social Insurance—a Living Wage Program. New York: Macmillan.

Beveridge, William Henry (1944) 1945 Full Employment in a Free Society. New York: Norton.

Booth, Charles et al. (1889-1891) 1902-1903 Life and Labour of the People in London. 17 vols. London: Macmillan.

Bruce, Maurice 1961 The Coming of the Welfare State. London: Batsford.

Burns, Eveline M. 1949 The American Social Security System. Boston: Houghton Mifflin.

Burns, Eveline M. 1956 Social Security and Public Policy. New York: McGraw-Hill.

Carlson, Valdemar 1962 Economic Security in the United States. New York: McGraw-Hill.

Clarke, C. E. 1950 Social Insurance in Britain: A Text Book for Actuarial Students. Cambridge Univ. Press.

Condliffe, J. B. 1959 The Welfare State in New Zealand. London: Allen & Unwin; New York: Macmillan.

DE Grazia, Alfred; and Gurr, Ted 1961 American Welfare. New York Univ. Press.

DE Schweinitz, Karl 1943 England’s Road to Social Security: From the Statute of Laborers in 1349 to the Beveridge Report of 1942. Philadelphia: Univ. of Pennsylvania Press. → A paperback edition was published in 1961.

Dicey, Albert Venn (1905) 1914 Lectures on the Relation Between Law and Public Opinion in England, During the Nineteenth Century. 2d ed. London and New York: Macmillan. → A paperback edition was published in 1962.

Epstein, Abraham (1933) 1936 Insecurity; a Challenge to America: A Study of Social Insurance in the United States and Abroad. 3d ed., rev. New York: Random House.

Fisher, A. G. B. 1945 Economic Progress and Social Security. New York and London: Macmillan.

Friedlander, Walter A. 1955 Introduction to Social Welfare. Englewood Cliffs, N.J.: Prentice-Hall.

Friedlander, Walter A. 1962 Individualism and Social Welfare: An Analysis of the System of Social Security and Social Welfare in France. New York: Free Press.

Galbraith, John Kenneth 1958 The Affluent Society. Boston: Houghton Mifflin.

Girvetz, Harry K. (1950) 1963 The Evolution of Liberalism. Rev. ed. New York: Collier. → First published as From Wealth to Welfare: The Evolution of Liberalism.

Great Britain, Interdepartmental Committee On Social Insurance and Allied Services 1942 Report on Social Insurance and Allied Services. Papers by Command, Cmd. 6404. London: H. M. Stationery Office; New York: Macmillan. → Known as the Beveridge Report.

Hansen, Alvin H. 1947 Economic Policy and Full Employment. New York and London: McGraw-Hill.

Harrington, Michael 1962 The Other America: Poverty in the United States. New York: Macmillan.

Herskovits, Melville J. (1940) 1952 Economic Anthropology: A Study in Comparative Economics. 2d ed., rev. & enl. New York: Knopf.

Keynes, John Maynard 1936 The General Theory of Employment, Interest and Money. London: Macmillan. → A paperback edition was published in 1965 by Harcourt.

Lippmann, Walter (1937) 1954 Inquiry Into the Principles of the Good Society. Rev. ed. Boston: Little. → A paperback edition was published in 1956 as Good Society.

Myrdal, Gunnar (1960) 1963 Beyond the Welfare State. Yale University, School of Law, Storrs Lectures on Jurisprudence, 1958. New Haven: Yale Univ. Press.

Myrdal, Gunnar 1963 Challenge to Affluence. New York: Pantheon.

Richardson, John Henry 1960 Economic and Financial Aspects of Social Security: An International Survey. Univ. of Toronto Press; London: Allen & Unwin.

Rowntree, Benjamin Seebohm (1901) 1922 Poverty: A Study of Town Life. New ed. London and New York: Longmans. → A study of the poor in York, England.

Rubinow, Isaac M. 1934 The Quest for Security. New York: Holt.

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Turnbull, John G. 1966 The Changing Faces of Economic Insecurity. Minneapolis: Univ. of Minnesota Press.

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Webb, Sidney; and Webb, Beatrice (editors) 1909 The Break-up of the Poor Law. London and New York: Longmans. → This is Part 1 of the Minority Report of the Royal Commission on Poor Laws and Relief of Distress. Part 2 was published as The Public Organisation of the Labour Market.

Weber, Max (1904-1905) 1930 The Protestant Ethic and the Spirit of Capitalism. Translated by Talcott Parsons, with a foreword by R. H. Tawney. London: Allen & Unwin; New York: Scribner. → Translated from the 1920 revision of the German edition.

Wilensky, Harold L.; and Lebeaux, Charles N. 1958 Industrial Society and Social Welfare: The Impact of Industrialization on the Supply and Organization of Social Welfare Services in the United States. New York: Russell Sage Foundation.

WELFARE RIGHTS

Is there a constitutional right of indigent people to basic survival assistance from the state? The current Supreme Court says no, but there is a strong argument that a future Supreme Court should recognize a positive constitutional right to basic subsistence.

The current Court's view was essentially settled in dandridge v. williams (1971), when the Court ruled that a state law setting a maximum grant of welfare benefits to any one family, regardless of family size, was to be categorized as economic regulation. On this assumption the law should be upheld if it were supported by a rational basis, which the Court found to be present.

For a decade and a half prior to that time, the Court had tantalized scholars and advocates with a series of holdings requiring provision of transcripts to indigent criminal defendants in griffin v. illinois (1956), outlawing the poll tax because of its impact in barring indigent people from voting in harper v. virginia state board of elections (1966), mandating a face-to-face hearing before welfare benefits could be terminated in goldberg v. kelly (1970), and invalidating durational residence requirements for welfare in shapiro v. thompson (1969).

These opinions suggested there was something particularly unacceptable or vulnerable about indigence that required special treatment of indigent people by the state. Some welfare advocates thought the Court might strike down America's patchwork income-maintenance system, in which there was no statutory obligation to help two-parent families and states could set payment levels as they chose.

Dandridge was the Court's response, followed as the decade wore on by declarations, in Lindsey v. Normet (1972), that there is no constitutional right to any minimum level of housing and, in maher v. roe (1977), that there is no right to any minimum level of health care.

Yet a kernel of doctrine remains to support the notion of a right to subsistence help. Indigence does require the state to take steps it would not otherwise have to take, at least when some other liberty or property interest is also at stake. The state, for example, has no obligation to provide a transcript to the rich, and it can impose durational residential requirements or differential fees for nonresidents applicable to a number of state benefits. But when indigence is involved, the liberty or property interests concerned become vital enough to require a different response from the state.

The Court's handling of public education provides a particularly important clue. In san antonio independent school district v. rodriquez (1973), the Court, while upholding Texas's system of school finance, noted that a refusal to provide public education altogether would present a different case, a point it reiterated in Papasan v. Allain (1986). Considering that the wealthy can purchase education for their children, these references imply some obligation to provide education for those who cannot afford it. One argument supporting such a claim is that it is difficult to exercise one's political rights effectively without education. The same commonsense argument applies more generally to the status of indigence. Lack of food and shelter impedes political participation, among other things. Insofar as families with children are involved, indigence interferes gravely with the liberty interest in family relations recognized in meyer v. nebraska (1923). The door left open in Rodriguez has important implications.

If the state has a special obligation to protect some liberty and property interests when indigence is also present, it is arguable that there is an analogous liberty interest in not being indigent. Because indigence in an extreme form represents a threat to life itself, it is arguable that the state has an obligation to provide basic subsistence.

The Supreme Court has been reluctant throughout American history to declare any positive constitutional rights—rights creating affirmative obligations for the state to act, even though it has committed no legal wrong. Nonetheless, an alternative stream of doctrine, more muted and episodic, has permitted the Court to impose on the states affirmative obligations to act. For example, the Court's strained efforts to find state action in shelley v. kraemer (1948) and marsh v. alabama (1946) might be characterized as imposing constitutional obligations on states to intervene to nullify unacceptable private arrangements or outcomes of private activities. The claim of a right to a subsistence, or "survival," income can well be said to rest on a similar state obligation to intervene to alter unacceptable market outcomes and vindicate individual liberty interests.

The argument for a right to subsistence does not need to rest solely on the idea of a positive right. For the nonelderly the current welfare system, in terms of cash and cash-equivalent assistance, consists primarily of Aid to Families with Dependent Children (AFDC) and food stamps. Because the states set payment levels for AFDC benefits, combined payment levels under the two programs vary from less than half the poverty level up to a point near the poverty level ($9,435 for a family of three in 1988). The states do not seek to justify this variation by reference to any regional difference in the cost of living—or, indeed, by reference to any other factor. The median state's benefits approximate two-thirds of the poverty-level income. In other words, in half the states welfare assistance brings a family with children up to less than two-thirds of what the government itself says is required to achieve a bare minimum standard of living. No substantial cash or cash-equivalent federal assistance other than food stamps is available to nondisabled nonelderly individuals or to couples without children.

It is not excessive to argue that this system lacks a rational basis. If any degree of heightened scrutiny were attached to legislation affecting the indigent, it is hard to see how the current welfare system could be justified in the face of an equal protection challenge. Surely the current Supreme Court would not respond positively to these arguments. Yet similar arguments might be taken seriously by Justices of the future.

Peter B. Edelman
(1992)

(see also: Economic Equal Protection; Welfare State.)

Bibliography

Black, Charles L., Jr. 1985 Further Reflections on the Consitutional Justice of Livelihood. Columbia Law Review 86: 1103–1117.

Edelman, Peter B. 1987 The Next Century of Our Constitution: Rethinking Our Duty to the Poor. Hastings Law Journal 39:1–61.

welfare state. There are many theories as to why the welfare state developed, from the radical view of its serving the needs of capitalism by maintaining political stability and providing healthy, educated workers, to the democratic perspective that it arose from the demands of the working class expressed through the ballot box. It has been called ‘an erratic and pragmatic response of government and people to the practical individual and community problems of an industrialised society’.

In the laissez-faire, capitalist, self-help ideology of the 19th cent. fears of dependency and disincentives for the poor resulted in harsh measures based on the workhouse. At the turn of the century Booth's (London) and Rowntree's (York) studies, revealing the facts of poverty and showing its origins in social and economic conditions, helped to raise awareness of the problem and set the stage for reform.

Measures taken by Asquith's Liberal government, with Lloyd George as chancellor, represent the foundations of the British welfare state. Non-contributory old-age pensions (1908), paid for by higher taxes (‘the People's Budget’, 1909), and the National Insurance Act—Health and unemployment (1911) were the most important reforms. In the inter-war years the problem of unemployment dominated social policy; the insurance scheme could not cope and in 1931 the dole was cut and a family means test implemented, a return to relief based on Victorian deterrent values.

The Second World War threw people together, and in the relative social cohesion of the war years they determined that ‘never again’ should there be a return to the misery of the 1930s. The Beveridge Report (Report on Social Insurance and Allied Services, Cmd. 6404) gave shape to these ideas. Beveridge identified ‘five giant evils of Want, Disease, Squalor, Ignorance and Idleness’ and, to fight each evil, ‘five giants on the road to reconstruction’: social security, a national health service, housing provision, state education, and a commitment to full employment. In July 1945 a Labour government, fully committed to wholesale reform, was elected in a landslide general election victory. Led by Clement Attlee, it lasted until 1951 and founded the modern British welfare state.

Poverty was to be conquered by a commitment to full employment together with social insurance. The coalition government's 1944 Employment White Paper made explicit all-party acceptance of Keynesian demand management to combat unemployment. Social insurance provisions, based on Beveridge, were a move from selectivity to comprehensive coverage. Compulsory contributions to a National Insurance scheme provided for incomes during sickness, unemployment, widowhood, and retirement; there was also a means-tested safety net, national assistance (now income support), and family allowances (now child benefit). The National Health Service Act (1946) provided for free health care for all regardless of means, and the birth of the NHS in 1948 was a triumph for Aneurin Bevan, minister for health. Education reform had been initiated by R. A. Butler, Conservative education minister in the coalition government, in his 1944 Education Act. The school-leaving age was to be raised to 15 and there was free secondary education for all. Finally, council housing was to solve the problem of homelessness and squatting which followed the end of the war.

Throughout the 1950s and 1960s there was cross-party consensus on the welfare state. In the 1970s the consensus was challenged from the right by neo-liberals who wanted to ‘roll back the state’. Their arguments, together with rising unemployment, reawakened concern over costs and a ‘dependency culture’. The election of a Conservative government under Margaret Thatcher in 1979 led to debate on the future of the welfare state, but few measures to reduce its scope were taken until after the third Conservative election victory in 1988. The debate continues: broadly there are two interrelated issues: the universalist One Nation approach versus a means-tested safety-net system, and the sustainability of the costs of provision.

Margaret Wilkinson