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There are three main interpretations of the idea of a welfare state: Etymology The English term "welfare state" is believed to have been coined by Archbishop William Temple during the Second World War, contrasting wartime Britain with the "warfare state" of Nazi Germany.• In German, a roughly equivalent term (Sozialstaat, "social state") had been in use since 1870. There had been earlier attempts to use the same phrase in English, for example in Munroe Smith's text "Four German Jurists",• but the term did not enter common use until William Temple popularized it. In French, the synonymous term "providence state" (État-providence) was originally coined as a sarcastic pejorative remark used by opponents of welfare state policies during the Second Empire (1854-1870). The development of welfare states Modern welfare states developed through a gradual process beginning in the late 19th century and continuing through the 20th. They differed from previous schemes of poverty relief due to their relatively universal coverage. The development of social insurance in Germany under Bismarck was particularly influential. Some schemes, like those in Scandinavia, were based largely in the development of autonomous, mutualist provision of benefits. Others were founded on state provision. The term was not, however, applied to all states offering social protection. The sociologist T.H. Marshall identified the welfare state as a distinctive combination of democracy, welfare and capitalism. Examples of early welfare states in the modern world are Sweden (Folkhemmet), Germany, the Netherlands, and New Zealand in the 1930s. Germany is generally held to be the first social welfare state. Changed attitudes in reaction to the Great Depression were instrumental in the move to the welfare state in many countries, a harbinger of new times where "cradle-to-grave" services became a reality after the poverty of the Depression. In the period following the Second World War, many countries in Europe moved from partial or selective provision of social services to relatively comprehensive coverage of the population. The activities of present-day welfare states extend to the provision of both cash welfare benefits (such as old-age pensions or unemployment benefits) and in-kind welfare services (such as health or childcare services). Through these provisions, welfare states can affect the distribution of wellbeing and personal autonomy among their citizens, as well as influencing how their citizens consume and how they spend their time.•• Arguments for and against the welfare state The concept of the welfare state remains controversial, and there is continuing debate over governments' responsibility for their citizens' welfare. Arguments in favor Arguments against Criticisms The most extreme criticisms of states and governments, and by extension the welfare state, are from anarchists, who believe that all states and governments are undesirable and/or unnecessary. They would tend to argue that the governmental practice of supporting people (paternalism) is a method of controlling and "owning" those people, rather than an act of altruism. Arguably, the idea of a welfare state receives most of its criticism in the United States, which has much more limited welfare services than most developed countries. Some of this criticism concerns the idea that a welfare state makes citizens dependent and less inclined to work. This is unsupported by the economic evidence; there is no association between economic performance and welfare expenditure in developed countries.• Similarly, there is no evidence for the contention that a welfare state impedes progressive social development. Robert E. Goodin, Bruce Headey, Ruud Muffels, and Henk-Jan Dirven show that on major economic and social indicators the USA performs worse than the Netherlands, which has a high commitment to welfare provision.• Another criticism is that the welfare state allegedly provides its dependents with a similar level of income to the minimum wage. Critics argue that fraud and economic inactivity are apparently quite common now in the United Kingdom and France. Some conservatives in the UK claim that the welfare state has produced a generation of dependents who rely solely upon the state for income and support instead of working. They believe that the welfare state was created (in 1948 in the UK) to provide a carefully selected number of people with a subsistence level of benefits in order to alleviate poverty, but that it has been overly expanded to provide a large number of people indiscriminately with more money than the country can afford. Some feel that this argument is demonstrably false: the benefits system in the UK hands out considerably less money than the national minimum wage, and receipt of benefits is dependent on the regular submission of proof that the beneficiary deserves the money, either as a result of genuine incapacity or as a reward for seeking employment. A third criticism of the welfare state is that it results in high taxes. This is sometimes true, as evidenced by places like Denmark (tax level at 50.4% of GDP in 2002) and Sweden (tax level at 50.3% of GDP in 2002). However, these countries also have high wage economies and high GNPs; high taxes do not imply poor economic performance. In addition, they have a strong system of progressive taxation, which ensures that less burden falls on the poor and middle classes. Lowering taxes would not necessarily result in more spending money for the average citizen (since a lot of free services would no longer be free). A fourth criticism of the welfare state is the belief that welfare services provided by the state are more expensive and less efficient than the same services would be if provided by private businesses. In 2000, Professors Louis Kaplow and Steven Shafell published two papers, arguing that any social policy based on such concepts as justice or fairness would result in an economy which is Pareto inefficient. Anything which is supplied free at the point of consumption would be subject to artificially high demand, whereas resources would be more properly allocated if provision reflected the cost. A first response might be that the purpose of state-provided welfare is to respond to social needs, not necessarily to be cheaper overall. In a welfare state, the poor and lower-middle classes receive certain services free of charge, whereas in non-welfare states they would have to pay for those services, and could possibly not afford them. More fundamentally, although private provision can reduce unit costs, it often does so through adverse selection, or exclusion of disproportionately expensive cases. The assumption that public provision of social services is more costly overall is often backed by examples of very large public institutions - such as the British National Health Service, which is the third greatest employer in the world. However, several studies have shown that national health care systems tend to be cheaper than equivalent provision through private care. The welfare state and social expenditure Welfare provision in the contemporary world tends to be more advanced in the countries with stronger and more developed economies. Poor countries, on the other hand, tend to have limited social services. Within developed economies, however, there is very little correlation between economic performance and welfare expenditure.• There are individual exceptions on both sides, but as the table below suggests, the higher levels of social expenditure in the European Union are not associated with lower growth, lower productivity or higher unemployment, nor with higher growth, higher productivity or lower unemployment. Likewise, the pursuit of free market policies leads neither to guaranteed prosperity nor to social collapse. The table shows that countries with more limited expenditure, like Australia, Canada and Japan, do no better or worse economically than countries with high social expenditure, like Belgium, Germany and Denmark. The table does not show the effect of expenditure on income inequalities, and does not encompass some other forms of welfare provision (such as occupational welfare). The table below shows, first, welfare expenditure as a percentage of GDP for some (selected) OECD member states, and second, GDP per capita (PPP US$) in 2001: Figures from the OECD• and the UNDP.• Note: no data for China, India, Indonesia, Brazil, Russia, and Pakistan, who are not members of the OECD. See also Data and statistics | |||||||
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