The welfare state: historical development and contemporary policy

Welfare State

Over the past century, the welfare state in the United States has developed into a way of life as more and more people have become dependent upon it, both as consumers and producers of its services. As a result, we live in a large, expensive system of bureaucratic service delivery that consumes a good deal of the wealth created by Americans annually.

As the welfare system has increased in size, it has become increasingly difficult to scale back. In addition, many people have a vested interest in maintaining and expanding it. However, many argue that the need for a welfare state is decreasing and that the welfare state has outlived its usefulness.

Basically, the welfare system does two things. For one, it provides many universal services, such as education, health care and retirement pensions. Secondly, it provides mean-tested payments that support those with little or no income. Unemployment, sickness, domestic purposes and other benefits are another byproduct of the welfare state.

While these things are important to society, many argue that for the majority of the people, the welfare state is just a system of compulsory saving, saying that it would be cheaper, more efficient and more empowering if the government allowed the people to make their own arrangements. If the people were given self-empowerment, the dependent state caused by the welfare state would not exist.

About the Welfare State

In the book "Tethered Citizens," Sheldon Richman (2001) describes the history of the welfare state, revealing the immorality of the coerced redistribution of wealth. This book shows that, in reality, there are many negative consequences of the welfare state, making government welfare likely to fail. According to Richman, the welfare state is incompatible with a free society and a constitutional government. Richman advocates replacing welfare with the alternative of voluntary expectant giving.

The roots of the modern welfare state can be traced to Imperial Germany during the final decades of the 19th century. During this era, the conservative German politician and chancellor, Otto von Bismark, introduced the archetype of the welfare state by organizing a variety of programs, such as national health insurance, social insurance, accident insurance, unemployment insurance, and senior insurance. These programs are now the models for England and the United States.

While Bismark intended to protect and support workers, his main goal was to influence their loyalty and support. At the time, he faced several political challenges and felt that the welfare state would influence the working class to support him. His plan worked. Due to his blueprint for the welfare state, the working class came to view the state as a social institution existing for their welfare. The German welfare state laid the foundation for progressive intellectuals and policy advocates in the United States during the early 20th century.

According to Richman, the idea of an activist government in the United States became more popular following the Civil War -- a war that promoted the national collectivization of America by transforming a nation of individuals into a well-developed country, which was based on planning and control. After the war, self-reliance was replaced by service and obedience. As leaders supported a strong central government, the government was encouraged to provide services and transfer wealth.

As a result, war relief was provided and a pension system for war veterans was created. The pension system grew and a budding welfare state emerged in the U.S. As politicians attempted to gain votes by giving pensions as favors to non-veterans. Social reforms and economic regulations were soon adopted. After the depression, the New Deal increased this welfare state. Over the past several decades, Americans have put more and more faith in the government. While early Americans relied on themselves, family, friends, neighbors, churches, lodges, mutual benefit societies, and other voluntary groups, today's generation relies on the welfare state.

According to Richman, the welfare state supporters co-opted the term welfare, which used to mean freedom from physical force, and linked it to their re-distributive ideas. Similarly, the classical idea of security of the person, of possessions, and of exchange has been broadened to provide for people's rights to publicly provided healthcare, retirement funds, unemployment insurance, etc. As a result, there is a tremendous dependency on the government.

State of Dependency

According to Richman, "the welfare state is an engine of paternalistic wealth transfer that promises security and stability while robbing individuals of their liberty and autonomy." Richman describes how the welfare state initially attracts people with its surface benefits, then imposes controls on them, compromising their independence and integrity.

Basically, opponents of the welfare state argue that the government is robbing people of their right to freedom by taking their money to support others. By doing so, the government is depriving people of their right to decide whether or not they wish to use their hard-earned money to help support others.

According to Ron Paul, "Voluntary charities also promote self-reliance, but government welfare programs foster dependency. In fact, it is in the self-interest of the bureaucrats and politicians who control the welfare state to encourage dependency. After all, when a private organization moves a person off welfare, the organization has fulfilled its mission and proved its worth to donors. In contrast, when people leave government welfare programs, they have deprived federal bureaucrats of power and of a justification for a larger amount of taxpayer funding."