Understanding the Welfare State and Its History

By
WILL KENTON
Updated April 07, 2022

What Is a Welfare State?

The term "welfare state" refers to a type of governing in which the national government
plays a key role in the protection and promotion of the economic and social well-being
of its citizens.1 A welfare state is based on the principles of equality of opportunity,
equitable distribution of wealth, and public responsibility for those unable to avail
themselves of the minimal provisions of a good life. Social Security, federally mandated
unemployment insurance programs, and welfare payments to people unable to work
are all examples of the welfare state.

Most modern countries practice some elements of what is considered the welfare state.
That said, the term is frequently used in a derogatory sense to describe a state of
affairs where the government in question creates incentives that are beyond reason,
resulting in an unemployed person on welfare payments earning more than a struggling
worker. The welfare state is sometimes criticized as being a "nanny state" in which
adults are coddled and treated like children.

KEY TAKEAWAYS

• The welfare state is a way of governing in which the state or an established

group of social institutions provides basic economic security for its citizens.
• By definition, in a welfare state, the government is responsible for the individual
and social welfare of its citizens.
• Most modern countries have programs that are reflective of a welfare state, such
as unemployment insurance and welfare payments.
• However, the term "welfare state" is a charged one, as critics of such a system
say it involves too much government involvement in the lives and well-being of
citizens.

Understanding the Welfare State

The welfare state has become a target of derision. Under this system, the welfare of its
citizens is the responsibility of the state. Some countries take this to mean offering
unemployment benefits and base level welfare payments, while others take it much
further with universal healthcare, free college, and so on. Despite most nations falling
on a spectrum of welfare state activity, with few holdouts among the most developed
nations, there is a lot of charged rhetoric when the term comes up in conversation. A
lot of this owes to the history of the welfare state.
The History of the Welfare State

Although fair treatment of citizens and a state-provided standard of living for the poor
dates back further than the Roman Empire, the modern welfare states that best
exemplify the historical rise and fall of this concept are the U.K. and the United States.
From the 1940s to the 1970s, the welfare state in the U.K.—based on the Beveridge
Report—took hold, leading to a growth in the government to replace the services that
were once provided by charities, trade unions, and the church.2 In the U.S., the
groundwork for the welfare state grew out of the Great Depression and the massive
price paid by the poor and the working poor during this period.3

National Library of Medicine. "The Deserving Poor, the Family, and the U.S.
Welfare System."
The U.K.'s system grew despite some spirited opposition by Margaret Thatcher in the
1980s, and it continues today although it frequently needs restructuring and
adjustments to keep it from getting too unwieldily.4 The U.S. never went to the extent
of the U.K., let alone somewhere like Germany or Denmark, and Ronald Reagan had
much more success than Thatcher in shrinking government.567 Many people look at
the differing economic growth rates of the U.S. and the U.K. throughout periods where
the welfare state flourished and floundered to make conclusions on whether it is good
or bad for a nation as a whole.

Special Considerations

While it is true that the government is rarely the most cost-effective agent to deliver a
program, it is also true that the government is the only organization that can potentially
care for all its citizens without being driven to do so as part of another agenda. Running
a welfare state is fraught with difficulties, but it is also difficult to run a nation where
large swaths of the population struggle to get the food, education, and care needed to
better their personal situation.

2.
Welfare State
M. Weir, in International Encyclopedia of the Social & Behavioral Sciences, 2001

A welfare state is a state that is committed to providing basic economic security for its citizens by
protecting them from market risks associated with old age, unemployment, accidents, and sickness.
The term ‘welfare state’ first emerged in the UK during World War II. It has since been used much
more broadly to describe systems of social welfare that have developed since the nineteenth
century. Welfare state studies have sought to create typologies that group countries into categories
based on variations in the role that state, market, and family play in ensuring well-being. A second
line of research has sought to account for welfare state development and variation, by examining
economic, political, institutional, and ideological factors. These studies are broadly cross-
disciplinary. Contemporary research examines welfare state restructuring as economic
globalization, and changes in the family and gender roles have placed new pressures on welfare
states.
Typologies of the Welfare State

Esping-Anderson focuses on the ways in which ideas and beliefs regarding welfare and
the state's role in meeting economic needs have shaped the form of welfare provision.
He identifies three basic ‘welfare state regimes’:

Liberal welfare states respond to market and labor force imperatives. Many benefits,
such as health insurance and pensions, are linked with employment. Means testing is
used to determine eligibility for state services, and relatively modest cash and voucher
benefits are provided for those deemed eligible.

Conservative/corporatist welfare states rely on state provision of services, rather than

on market or private provision. These states often manifest normative ideals of a nuclear
family characterized by a male breadwinner and a woman who tends to the family.

Social democratic welfare states promote a vision of the state as the guarantor of social
rights. These states promote equality of benefits at high levels as a way of minimizing
the effects of social class and income. Welfare benefits are used to equalize the ability of
all citizens, regardless of income, to participate in the political community.