The “welfare state” as misnomer

The welfare state’s name is itself a source of difficulty in understanding the reality to which it points. The phrase “welfare state” emerged from, and remains embedded in, the political histories of certain nations and certain periods, above all Britain and Sweden in the post-war era. As a result, it functions not just as an analytical term but also as an ideological one: the identification of welfare state government with the politics of social democracy being a case in point (Judt Reference Judt2010). But even beyond this—at the level of denotation rather than connotation—talk of a “welfare state” can easily mislead. First of all, what we call the welfare state is not primarily about “welfare” and certainly not primarily about welfare for the poor.^{Footnote 7} It is about social insurance, social rights, social provision, and the social regulation of economic action, the chief beneficiaries of which are not the poor but rather the middle classes and those in employment as well as employers and corporations (Barr Reference Barr2001; Le Grand Reference Le Grand1982).

Nor is the welfare state necessarily about the state or state institutions. It is true that welfare state programs are legislated and funded by government since they depend, for the most part, on taxation and legal compulsion. But the services and benefits these programs involve need not necessarily be produced, administered, or delivered by state officials. In many European nations—Germany, France and Italy, for example—the tasks of administering social insurance and delivering benefit payments are devolved to religious and voluntary associations. In Canada, healthcare is privately provided but medical providers are paid by a government insurance fund. And in the US, a great deal of tax-funded and government-subsidized welfare is distributed in and through private corporations as part of the employment contract (Castles et al. Reference Castles, Leibfried, Lewis, Obinger and Pierson2010; Barr Reference Barr1992; Hacker Reference Hacker2002).

Nor is the “welfare state” an appropriate way to describe the state as a whole, as if the whole of central and local government were taken up with the task of welfare provision. No modern state—and here I include post-war Britain and Sweden—“is” a welfare state any more than it is a “neo-liberal state”, a “carceral state”, or a “security state”.^{Footnote 8} Properly used, the concept of the welfare state only ever refers to a specific dimension of governmental activity—one part of a much larger complex that carries out many other functions and forms of expenditure. On the other hand, there is no state in the industrialized world that lacks a developed welfare state apparatus or which does not devote a significant fraction of its budget to social expenditures.^{Footnote 9} So although welfare state sectors take a variety of forms, and some are more extensive or resource-intensive than others, the existence of such a sector is a feature of all developed industrial nations, the US very much included.

The welfare state’s name has been problematic from the start. It is well known that the phrase first entered English usage in 1941 when the Archbishop of York, William Temple, contrasted Britain, which he termed a “welfare state”, to Nazi Germany, which he described as a “power state”.^{Footnote 10} In using the phrase in this way, the Archbishop was seeking to give a positive connotation to a German term—Wohlfartsstaat—that had originally conveyed a negative meaning, having been used by Weimar conservatives to criticize the social policies of their opponents.^{Footnote 11} And while Temple’s welfare state conception evoked a state that was democratic, consensual and law-governed—as opposed to totalitarian—in the post-war years the phrase came to refer to a state, above all the British state, that provided social services and economic security.

What is less widely known, however, is that when the phrase first entered common usage in the 1950s and 1960s, it was least popular with the people most closely associated with the institutions it supposedly described. William Beveridge, who is generally regarded as the father of the British welfare state, heartily disliked the term. He objected that the welfare state phrase implied a “something for nothing”, “Santa Claus state” that was quite at odds with his stress on the importance of worker contributions, voluntary effort, and personal responsibility. As Beveridge insisted in his Report on Social Insurance and Allied Services of 1942, “the citizen should not be taught to regard the state as the dispenser of gifts for which no one needs to pay”. The lse sociologist T.H. Marshall—the theorist of the welfare state and who gave us our modern conceptions of “social rights” and “social citizenship”—also distanced himself from the term. In his celebrated lecture on Citizenship and Social Class Marshall never once used the phrase and he said in 1953 that “the welfare state is a term for which I have developed a very strong dislike”.^{Footnote 12} And Richard Titmuss, the lse Professor of Social Policy who became the leading academic spokesman for Britain’s post-war social policies, regarded “the welfare state” as a hostile phrase, used by social policy’s enemies rather than its friends. On those occasions when he acceded to conventional usage, Titmuss took care to place the phrase in inverted commas, and he repeatedly denounced what he called the “myth of the welfare state for the working classes”.^{Footnote 13}

What Beveridge, Marshall and Titmuss each understood was that the welfare state phrase carried all the wrong connotations. It evoked the dubious values of “something for nothing” and suggested an overbearing, bureaucratic state that—according to contemporary opponents such as F.H. Hayek, Herbert Hoover, and Winston Churchill—might one day become totalitarian.^{Footnote 14} That the name eventually became established, despite these objections, and has come to be used by supporter and opponent alike, means that these associations remain just beneath the surface of our discourse. Were the phrase not so deeply embedded, it might be possible to drop it from social scientific usage and replace it with a more neutral, descriptive term such as “the social state”—but as a practical matter that now seems unlikely. In these circumstances, the work of theoretical definition and conceptual clarification becomes more especially important.

Defining the welfare state

The essential starting point for any attempt to specify this phenomenon is to realize that we cannot define the welfare state in terms of its supposed aims or ends—whether the promotion of welfare or the provision of security. As Max Weber (1948: 77) insisted when he set out his famous definition of the modern state:

I would argue that Weber’s argument applies, a fortiori, to the welfare state. Every government, whether despotic or democratic, ancient or modern, claims to enhance the welfare of its nation, serve the commonweal, and provide its subjects with security and protection. So if we were to define states by their professed aims then all states would be “welfare states”.^{Footnote 15} On the other hand, there are countless non-state organizations (churches, charities, guilds, mutual aid associations, trade unions, and so on) that pursue “welfarist” ends but which ought not to be included in the definition. Following Weber then, we can define the welfare state not by reference to a set of ends (whether poverty relief, risk-management, security, full employment, or whatever) but instead by reference to “the means peculiar to it”—i.e. to the distinctive methods and instruments that it deploys to pursue its multiple and various ends. The welfare state, like the state more generally, is not some kind of historically embedded idea or teleological essence that was always in the process of emerging. Nor is it an essentially unified conceptual whole. It is, instead, the name we give to a distinctive set of practices that emerged at a specific historical moment.

In tracing these practices, we can usefully borrow from Michel Foucault, whose analytics of power focus precisely on this question of the “how of power” and the means, techniques and rationalities through which governmental power is exercised (Foucault Reference Foucault, Burchell, Gordon and Miller1991; Reference Foucault2007). What makes the “welfare state” distinctive as a modality of government, what sets it apart from prior institutional and administrative arrangements for managing subjects and securing their welfare, is a specific set of rationalities and techniques—developed in the late 19^th century and widely established in the 20^th century—employed to govern the nation’s economy and its population in the interest of economic growth and social security. Understood in these terms, it is not the aim of promoting welfare that defines the welfare state but instead the deployment of specific means of governing: a distinctive governmentality that brings a distinctive set of instruments to bear upon a distinctive set of objects.

A distinctive governmentality

I have suggested that the welfare state is best conceived of as a distinctive mode of government, a specific governmentality. What exactly does this mean? When historians consider what was new and distinctive about the 20^th century welfare state—what set it apart from prior forms of poor relief or social provision—they point to several developments and discontinuities. They point to the “abolition of the Poor Law” and the ending of the stigma, discipline and indignities that local government assistance had imposed on the destitute from the 16^th century up until its repeal in the 20^th century. They point to the emergence of government schemes for organizing the labor market and securing workers’ income by means of new institutions such as labor exchanges and social insurance. They point to the increased role of central government and the shift of responsibility from local to national officials. They point to the changed character of the archetypal welfare transaction, from paupers receiving doles to citizens claiming rights. And they point to the expanded role that the state and professionalized social workers came to play in the “private” lives of families and individuals.

All of these developments are significant. But I would argue that the most important discontinuity marking the emergence of the welfare state was actually a change in conceptions of the problems being addressed and the emergence of new ways of conceiving the relationship between the social and the economic and the new rationality of governing that followed from it. What marks the welfare state off from its predecessors is above all a new style of thinking and acting on the problems of employment and security; one that affected the whole economy and the whole population, and not merely the poor.

I would also insist that the new governmental rationality that emerged at that time continues to stand at the core of the welfare state, along with the technologies of social insurance, social regulation and social provision that emerged alongside it. So, although policies and programs have constantly evolved over the course of the last century, and although their political character, economic distributions, and ideological meanings have been repeatedly challenged and changed, the underlying modality of government that took shape in the early 20^th century continues to structure the fundamental forms and functions of the welfare state.

I can describe the emergence of this new rationality in more detail by focusing on the case of Britain.^{Footnote 16} For most of the 19^th century, the popular teachings of political economy had insisted that the relation between social protection and economic enterprise was, to speak anachronistically, a zero sum game (Sowell Reference Sowell2006). Money spent on poor relief was a drag on industry and a disincentive to work; every shilling given to a pauper was a shilling removed from the productive economy. Malthusian ideas, memories of the old Speenhamland system, and the teachings of the Charity Organization Society, combined to persuade policy-makers that charity and poor law provision should be minimized lest they multiply the poor and worsen the population/resources ratio. More generally, the laissez-faire ideas to be found in Paley and Bentham, Bastiat and the Physiocrats, Nassau Senior and the Poor Law Commissioners, converged to form the central principles of the philosophy in office.^{Footnote 17} But at the start of the 20^th century there was a marked shift in thinking about government’s capacity to manage the economy and the benefits of so doing—a transformation that would come to be associated with the name of John Maynard Keynes but that also involved other prominent figures such as William Beveridge (1909), Beatrice Webb (Reference Webb1909), Sidney Webb (Reference Webb1926), and Benjamin Seebohm Rowntree (1935/41) all of whom broke with the orthodoxies of their 19^th century predecessors.^{Footnote 18} In the economic prescriptions of 19^th century laissez faire, raising workers’ wages and providing income transfers to the poor had been vices with detrimental economic and social effects. In the new approach, they became virtues bringing economic and social benefits in their wake (Keynes Reference Keynes1926; Beveridge 1909: 1944; Webb Reference Webb1926; Harris Reference Harris1972).

The new thinking that emerged in the wake of the Great Depression of the 1890s and was reinforced by the economic collapse of the 1930s regarded unemployment not as a problem of “work effort” on the part of individual paupers but as a “problem of industry” operating at a level of the labor market as a whole (Beveridge 1909; Webb Reference Webb1926). It pointed to the possibility––confirmed by real-world events but long denied in economic theory––that markets could reach equilibrium at low levels of employment and produce prolonged, destructive depressions. It pointed to the positive effects that government interventions could bring about in such circumstances, not merely by creating jobs in local public works but by injecting money into a depressed economy to buoy up demand, boost investor confidence, and set off multiplier effects. And it pointed to the positive outcomes that were generated when workers were insured and made to feel secure against the risk of economic misfortune. It was, in effect, a transformation of the perceived problem and the means of addressing it. The object to be addressed by government was now seen to be the national economy (understood in terms of macro-economic relations between aggregates such as national revenue, total consumption, and the total volume of savings and investment, operationalized by means of national accounts); the labor market as a whole; and the structure of industrial production.

Welfare state governmentality involves the socialization or collectivization of activities. Managing risk, providing healthcare, relieving poverty, securing employment, insuring household income—all of these become functions to be undertaken at an aggregate level. The welfare state is, in that sense, a form of macro-economic and macro-sociological governance, directed and overseen by the nation state. It is thus a “statification” of governing practices that were previously local, private, and piecemeal and a “professionalization” of practices that were previously voluntary, philanthropic and amateur. As a result, the welfare state is more comprehensive, more routine, more systematic, and more encompassing than any prior form of social provision, utilizing nation-wide apparatuses of insurance, risk-management and normalization that have no historical equivalents. It moves welfare provision from the margins to the mainstream, targeting the mass of employed workers rather than the residuum of the poor and unemployed. What were once private, voluntary, and ad hoc civil society practices are collectivized and scaled up, becoming comprehensive, compulsory, state-guaranteed routines.

The use of comprehensive, compulsory, collective action is the fundamental mechanism that makes the welfare state possible. But this new governmentality was by no means totalizing. As Keynes argued in 1926 the state ought not to supplant other activities but ought instead to act at a scale and in a way that other social forces could not: “the important thing is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do these things which at present are not done at all” (Keynes Reference Keynes1926: 47) Reducing uncertainty by insuring risks, preventing cycles of unemployment, controlling currency and credit, collecting and disseminating the facts of business and industry, publicly controlling saving, socializing investment, and even controlling the growth and quality of the population—these were all proper objects of state action (Keynes Reference Keynes1926; Webb Reference Webb1926: 440).

Moreover, as Keynes insisted, these new conceptions and practices did nothing to undermine capitalism’s basic principles: the love of money, the private quest for profit, the animal spirits than drove investment and speculation. Instead, they helped manage the market’s uncertainties and ensured that consumer demand would not collapse into a depressed equilibrium as it had in the 1930s. They were, as Keynes put it, “techniques” for the better management of capitalist market economies (1926: 43).

The welfare state’s boundaries

If the “welfare state” concept is contested and ambiguous so too are the contours of the thing to which it refers. In the existing literature, there are three main delineations of the welfare state, each with a different set of boundaries and a different conception of the welfare state’s central functions:

1. (i) Welfare for the poor. This is the narrowest conception and the one usually preferred by the welfare state’s opponents, since it refers to the most problematic and least popular aspects of the system: namely means-tested income support such as “supplementary benefits”, Temporary Assistance to Needy Families (TANF), food stamps, and public assistance. It is also the conception that is invoked in American political discourse whenever “welfare” or the “welfare system” is being discussed.

2. (ii) Insurance, income maintenance and health and social services. This is the analytical focus of most comparative social policy experts, and includes the institutions—Social Security and Medicare in the US; National Insurance and the National Health Service (nhs) in the UK—that account for the greatest part of government social expenditure. This is usually what people have in mind when they refer to the “entitlement programs” established by America’s New Deal or the “universalism” of Beveridge’s welfare state.

3. (iii) Government at the level of the economy and the population. This is the broadest and least frequently invoked conception but it is the one standardly used by political economists and institutional sociologists. It brings into the scope of welfare state discussions the government’s market-forming fiscal, monetary, and employment policies––as well as its bio-political ones. This fundament dimension of welfare state government is frequently ignored in political debate and overlooked in social policy textbooks but it is precisely this conception of government that is highlighted by Foucault’s analysis of the character and practical objects of modern governmentality.^{Footnote 19}

These three conceptions ought not to be seen—as they usually are—as competing, mutually-exclusive characterizations of what the welfare state is. We ought instead to view them as the concentric circles of welfare state government, each one forming a structurally integrated element of the whole. At the core of the welfare state complex are the institutions that insure against loss of earnings by reason of unemployment, ill-health, old-age, and so on—what Foucault (Reference Foucault, Burchell, Gordon and Miller1991) calls the “mechanisms of security”. The operation of this comprehensive, compulsory insurance scheme, pitched at a national scale and affecting the whole population, is itself a mode of economic and bio-political governance. It, in turn, depends for its solvency on government policies that raise taxes, sustain employment, and promote growth, while it simultaneously contributes to these ends by enhancing labor flexibility, providing economic security, and enabling counter-cyclical spending. These social insurance schemes are, in turn, supplemented by non-contributory, poverty-relieving programs that form a “safety net” for those individuals who are uninsured (i.e. are outside the labor market) or who have somehow exhausted their insurance benefits. No one of these three sectors can long exist without the others as structural supports: each is a condition of existence of the other.^{Footnote 20} We can thus characterize the welfare state as the government of the economy and the population in the interest of security, stability and welfare, utilizing the tools of insurance, economic management, and comprehensive social provision together with the taxes, legal regulations and forms of expertise required for their operation.^{Footnote 21}

Welfare state institutions

I have stressed that the means through which the welfare state operates are the most distinctive features of this mode of government and the firmest basis for its definition.^{Footnote 22} What follows is a brief description of the five main sectors of welfare state government and the technologies that they employ.^{Footnote 23}

Functions and dysfunctions

These, then, are the major sectors of the welfare state complex and the most important instruments of welfare state government. Operating at the macro-level of the national economy and the population, and at the micro-level of families and individuals, they function to modify the economic outcomes and social relations that capitalist markets would otherwise create; secure a politically-agreed minimum of social welfare and economic security; and ensure the education, training, socialization and well-being of children, young workers and citizens. Moreover, these practices are designed to operate in ways that sustain and do not undermine the fundamentals of the capitalist economy and of liberal democracy (Hirst Reference Hirst1981).

But this talk of “functions” ought not to suggest the absence of conflict or the routine attainment of success––like the markets and the families they are designed to support, welfare states also exhibit failures and dysfunctions. Welfare state policies are rarely carried out smoothly because the relation between the welfare state and market capitalism is at once a necessary and a contradictory one. In modern societies, privately-determined economic action and publicly-determined social protection are shackled together to form a contradictory unity in which each aspect works simultaneously to sustain but also to undermine the other. Moreover, this contradictory unity is, to put it in Althusserian terms, a formation “structured in dominance” because the welfare state is, in effect, an ancillary institution and not the primary one. Welfare state transfers are politically-generated secondary distributions that modify a more fundamental market-based distribution that is grounded in private property and the transactions of property owners.^{Footnote 26} And while a well-adjusted and high-functioning welfare state can augment and enhance a nation’s economy, promoting flexibility, cooperation, managed change, and stabilized consumer demand, a welfare state can only survive if it is underwritten by a flourishing economy and sustained economic growth.

Welfare state government is always, therefore, a delicate balancing act: a matter of modifying economic outcomes without obstructing enterprise; protecting labor without reducing employment; limiting exploitation without provoking capital flight; taxing profits to fund public spending without harming growth or prompting investment strikes. It is also always a regulatory challenge. Welfare state government seeks to impose social and political controls on economic and family processes that all too easily escape, elude, or respond perversely to these regulatory efforts (Hirschman Reference Hirshman1991). These fundamental problems of system-conflict ensure that the basic practices of welfare state government are, in themselves, a source of chronic difficulties. The result is that contradictions, conflicts, and periodic “crises” are characteristic of all welfare states.^{Footnote 27}

System-conflict problems are ongoing challenges for any welfare state government. They can be managed more or less effectively but they can never be wholly eliminated. But there are also other, lesser problems about which it is useful to say a few words, if only to put them in perspective. These are the administrative problems that attach to poor relief, insurance and social provision; adaptation problems that arise from the welfare state’s need to keep up with changes in economic and family life; and political problems generated by class forces and actuarial groups contesting the distribution of costs and benefits that particular policies impose.

The international diffusion of welfare state governmentality

The “welfare state” involved a new governmentality, a new style of social and economic administration, organized at the national level. Like other successful technologies, welfare state programs spread rapidly, becoming more or less universal across the industrialized world in a matter of a few decades. The earliest “insurance state” took shape in Germany in the 1880s when Chancellor Bismarck enacted social insurance laws in an effort to head off the socialist movement and win the loyalty of civil servants and better-off workers. In the early 1900s, Britain’s Liberal government, led by Prime Minister Asquith and his Chancellor of the Exchequer, David Lloyd-George, introduced Workmen’s Compensation, Old Age Pensions, Labor Exchanges, and National Insurance. By the 1930s, the new techniques of government had spread across the Atlantic to the US, where President Roosevelt responded to the Great Depression with a massive public works program and later with a raft of “New Deal” legislation establishing Social Security, progressive taxation and trade union recognition. After 1945, the new welfare state was everywhere expanded and consolidated as part of the post-war reconstruction of Europe (Heclo Reference Heclo2010: 10-11). By 1960, every developed nation had established a core of welfare state institutions and every government had accepted responsibility for managing the economy (Baldwin Reference Baldwin1992). As Wilensky (Reference Wilensky1975) observed in 1975, in a remarkably short period of time, the welfare state had become “one of the great structural uniformities of modern society”.

Why was this? The reasons for this world-historic development are not hard to fathom. Indeed, in retrospect, its emergence appears over-determined. In any particular nation, the enactment of new welfare programs was always the outcome of historical processes involving individual reformers, social movements, political parties and the choices, contingencies and compromises these involved.^{Footnote 29} But viewed as a cross-national development, we glimpse the operation of large-scale processes that reshaped the social and political landscape of the entire developed world. Welfare state government was a response to the new and distinctive problems of the urban, industrial, market societies that were taking shape at the end of the 19^th century—above all, to the “normal accidents” of industrial production and the risks and uncertainties caused by insecure wage labor (Ewald Reference Ewald1986; Witt Reference Witt2004). As the economic depressions of the 1890s and 1930s revealed, the economic hazards of industrial society rendered unworkable the older forms of social provision such as charity, churches, Poor Law, and the workhouse. The local, ad hoc character of these institutions left them unable to address the new economic and social dislocations in effective ways. The old arrangements operated with the wrong structure and the wrong scale; and they relied on the existence of traditional support mechanisms—rural paternalism, community and kinship groups, common access to land—that were fast disappearing.

Welfare states were also a product of the new-found power of working class voters and organized labor—and of the response of ruling elites to these new social forces—occurring at a time when states were becoming capable of taking on tasks of this scale and complexity. And of course these transformations were occasioned by momentous historical events—the Great Depression, the collapse of democracy and the rise of Fascism, mobilization for total war, and the reconstruction of Europe after 1945—which created historic possibilities for political change and institutional renewal. This was a universal transformation. It affected not just this or that society but all industrialized nations, even if the new welfare regimes exhibited a great deal of national and regional variation in composition and functioning (Esping-Andersen Reference Esping-Andersen1990; Ferragina and Seeleib-Kaiser Reference Ferragina and Seeleib-Kaiser2011; Heclo Reference Heclo2010). And once established—as it was, everywhere, by the 1960s—the welfare state was embraced by all mainstream political parties, no matter what their complexion. As (Republican) President Eisenhower wrote in 1954: “Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history” (quoted in Krugman Reference Krugman2007: 58-59).

The “economic” and the “social” in long-term perspective

I have argued that welfare state government emerged in the 20^th century and that its specific practices marked a break with prior forms of poor relief and welfare. But for all its historical specificity as a mode of government, it is also possible to regard the welfare state as a chapter in a longer-term history of the relations between economic action and social provision. And viewing it in this long-term perspective allows us to appreciate some important characteristics that are obscured by short-term or presentist sightlines. Libertarian critics of the welfare state often refer to the laissez faire, free market world of the 19^th century as if these arrangements were the natural condition of mankind. They view the “self-regulating market” as the original state of nature and regard government “interference” as largely illegitimate and counter-productive.^{Footnote 30} But in the broad sweep of history, 19^th century laissez-faire capitalism was very much an exceptional case. And far from being “natural”, free market economic arrangements had to be forcibly established by government action that overturned customary laws and set aside traditional collective safeguards and “rights in common” that working people had long enjoyed (Polanyi Reference Polanyi1944; Thompson Reference Thompson1971).

Traditional societies—pre-capitalist social formations—did not have distinct “economies” that were set apart and organized according to a purely economic logic of profit and loss. They did not regard “market” exchanges as transactions that ought to be governed solely by the laws of supply and demand. Nor did they separate work from the worker by treating commodified labor power as an alienable “property” distinct from the human being who labors and the social context in which that labor is undertaken. Production and exchange were instead embedded in and constrained by religious, moral, and social rules that limited exploitation and protected against starvation in times of dearth or famine.

To point out these protections and restraints is not to romanticize the pre-capitalist past or represent it as some idyll of mutual care and support. Pre-modern social arrangements were neither equitable nor democratic, and in many respects, the coming of laissez faire was a liberating escape from a world in which narrow special interests used political power to secure sectional advantage. But for all their commitment to group privileges, monopolies, protectionist duties, rank and status hierarchies, these communities insisted that economic action should be subject to social and moral restraint.

The coming of a modern, fully-fledged capitalist society in 19^th century Britain was the first time in human history that economic actors shrugged off these social constraints and persuaded the nation’s rulers to entrust the collective welfare to the logic of private accumulation. The creation of laissez faire capitalism was, in that respect, an economic and social revolution: a departure from the long-term pattern of socially regulated production and exchange. And as Polanyi (Reference Polanyi1944) points out, it was in reaction against this revolution—and against the social dislocations that followed in its wake—that the modern welfare state was established.

Viewed in a long-term perspective, then, the coming of the welfare state in the 20^th century does not mark the beginning of an era in which social protections overlay and interrupt economic processes. It does not represent a turning away from the natural order of untrammeled commerce. It is instead the resumption, in a distinctively modern form, of a near-universal pattern that had briefly been pulled apart by the emergence of free-market capitalism. In the history of human societies, economic action has generally been embedded in, and constrained by, the norms of social, political, and moral life. The welfare state marks a return to that historical norm of social organization rather than a deviation from it.

What explains this remarkable historical pattern? Why haven’t societies through the ages allowed the poor to starve and the weak to go to the wall? The answer has less to do with altruism and human sympathy—though they certainly play a part—and more to do with the facts of human co-existence. In any social organization, however hierarchical and exploitative, social groups are related by ties of interdependence. Masters and slaves, lords and vassals, landlords and tenants, employers and employees, states and citizens are interconnected. These relations are unequal and exploitative, to be sure, but they tie group fates together in important ways. It is consequently in the interests of dominant groups to preserve those they dominate, if only to ensure a regular supply of tax, labor or military service; to limit the ravages of disease and the spread of epidemics; or to head off riot and insurrection.

Machiavelli advised that a prince who would maintain his state and fend off attacks must keep the body politic in security and good health. But the same mutual dependence operates on a different scale within the family. Young children are dependent on their parents but these parents age and become dependent in their turn. Those who can work provide for others who cannot, trusting that they will be taken care of when their time comes. Reciprocity extends across generations. Positive feelings of love and affection, solidarity and fellow feeling, noblesse oblige and respectful deference, altruism and gratitude, are actively fostered within these interdependencies, translating functional necessities into social morality and ethical norms. But intertwined with these altruistic sentiments are the hard bonds of mutual need. At the same time, aid to the poor helps justify the privileges of the powerful, upholding the legitimacy of their rule and preventing them from being seen as mere exploiters. Little wonder that beneficence and charity have long been cultural values embraced by elites and that rulers routinely declare devotion to the public welfare.

The character of these welfare arrangements depends, of course, on the nature of economic, social and political organization. And they always have their limits—excluding outsiders, the undeserving, the poor of other parishes or other faiths. But such arrangements always exist in some form, if only because social provision is essential to social integration and social order.

Moral economies and market economies

Sociologists and historians sometimes describe the welfare state as a kind of “moral economy” that has been imposed upon the market economy (Thompson Reference Thompson1971; Scott Reference Scott1976). And writers such as Richard Titmuss in The Gift Relationship (1970) and Michael Ignatieff in The Needs of Strangers (1984) have stressed what they see as the altruistic nature of the welfare state, grounded in social solidarity. But characterizing the welfare state as “moral” and “altruistic” greatly simplifies the motivations involved in its creation and fails to capture the values and power relations that underpin its long-term reproduction. As a sociological account, this idealized explanation misses the robust social forces that sustain the welfare state not just in solidaristic historical moments such as post-war reconstruction but also through prolonged periods of crisis and conflict.

The motives that led to the creation of welfare states were as varied and as diverse as the political actors who took part in that process. And although reformers often proclaimed themselves to be guided by high-minded moral sentiments, these concerns were usually mixed with ulterior motives of a more self-interested kind. Welfare payments were given as a matter of right or social justice—but they were also made in exchange for some return such as votes, or loyalty to the state, or to avoid trouble. Payments were made to promote equality—but they were also made to uphold status hierarchies and occupational inequalities. Social provision was intended to “civilize” and “humanize” capitalism—but also to make it more efficient and resistant to fundamental change. Social provision was made to enable citizenship and positive liberty—but also to counteract “degeneration” and improve what policymakers saw as an increasingly “unfit race”. Benefits were paid to secure workers and feed their families—but they were also made to stimulate demand, to keep money circulating, and to prompt investment and sustain capitalist commerce. The welfare state has always been about economic efficiency as well as social equity, and it has always served the interests of rulers as well as the needs of the ruled.

To be “for” the welfare state is not therefore to be on the side of the angels. It is to be in favor of the social control of economic processes—with all the political conflict and administrative challenges which that involves—rather than in favor of entrusting these processes to the self-serving choices and short-term interests of individual entrepreneurs, multi-national corporations, or financial speculators. Nor does being “for” the welfare state mean being “against” capitalism. Welfare state institutions are techniques for the management of capitalist market processes, not for their destruction. Capitalism is not abolished by the welfare state. On the contrary: it is altered by welfare state government in ways that make it socially and politically sustainable.

The welfare state as a normal social fact

I would like to conclude by setting out an argument that captures the basic points I have been making and expresses them in a classically sociological form. The argument is this: the welfare state is not a policy option that we are free to adopt or reject at will. It is, instead, a fundamental dimension of modern society, absolutely integral to the economic functioning and social health of industrialized capitalist societies. We can articulate this claim in its most a concise form by stating that in such societies the welfare state is what Emile Durkheim described as a “normal social fact”.

Durkheim famously sets out two distinct criteria—an empirical test and a functional test—by means of which we can classify a social institution as normal or abnormal. A normal social fact is an institution that (i) exists in all societies that have reached a particular stage of their development; and (ii) is bound up with, and integral to, the functioning of such societies.^{Footnote 31} It is an easy matter to show that the welfare state meets the first of these criteria. The welfare state exists, in some version or other, in every developed society that has an advanced, industrial economy (Baldwin Reference Baldwin1992; Castles et al. Reference Castles, Leibfried, Lewis, Obinger and Pierson2010; Wilensky Reference Wilensky1975 and Flora and Heidenheimer Reference Flora and Heidenheimer2005). And that continues to be true even after three decades of “assaults” on the welfare state by free-market policy reforms. In the US, the UK, and elsewhere anti-welfare politics have transformed aid to the poor, reducing benefit levels and tightening eligibility conditions. Anti-union legislation—in combination with structural changes in the labor market—has reduced workplace freedom, increased income inequality, and made working class households more insecure. And neo-liberal conceptions have increasingly shaped how economies are governed. But these changes have had little impact on the welfare state’s institutional core. Social Security and Medicare in the US, and National Insurance and the nhs in the UK, have expanded over that time and continue to command popular and political support. Today’s welfare states have been transformed in important respects but their infrastructures remain firmly in place and they remain a vital dimension of modern government and of social and economic life.^{Footnote 32}

The second test is more complicated. How can we show that the welfare state is essential to the functioning of developed capitalist societies? How can we demonstrate that it is, as Durkheim put it, “bound up with the fundamental conditions of social life”? Here we need to recall some of the harsher characteristics of capitalist economies and competitive markets—features that we too often forget precisely because the welfare state successfully moderates and obscures them. Modern society is a capitalist society. It is, to follow Wolfgang Streeck’s definition, a society that has set up its economy in a capitalist manner and in so doing has entrusted the vital task of material provision (upon which all human life depends) to private economic actors—i.e. to capitalist firms whose actions are oriented towards the accumulation of capital based on private calculations of utility and self-interest (Streeck Reference Streeck2011; Reference Streeck2012).

Capitalism is, it should be said, a tremendously powerful system of production and exchange: no other economic system can compare in terms of sheer productivity, innovation and dynamism. Capitalism’s impact on technology and the accumulation of goods is likewise unsurpassed in human history. Open markets are remarkable arrangements for generating choice, communicating information, and promoting certain kinds of freedom and equality.^{Footnote 33} And the expansion of trade and commerce has, if historians are to be believed, contributed to the softening of manners, the expanded scope of solidarities, and the civilizing of nations (Hirshman Reference Hirshman1977; Appleby Reference Appleby2010). In these important respects, capitalist economies have been an enormous boon to human welfare.

But there is also an important sense in which capitalism, as a system of economic action, is profoundly anti-social. Societies that allow economic life to be governed by the logic of market competition and private profit are necessarily societies at risk. Their laws of motion produce rapid undirected change; they generate marked inequalities and concentrations of wealth; and they are chronically prone to crises of accumulation, to booms and slumps, and to periodic economic collapse. If any of us had forgotten this, the events of 2008 and its aftermath have been a vivid reminder.

The chief characteristics of capitalist societies are not stability and equilibrium: these are the imaginary artefacts of classical and neoclassical theory not facts about real economies. The chief characteristics of capitalist societies are uncertainty, unpredictability, undirected change and unequal outcomes. Non-stop innovation and changing terms of trade constantly put established ways of life at risk. Intense competition generates fear and puts a premium on killing off competitors. The established goal of unlimited accumulation normalizes private greed and generates socially damaging inequalities, while the pursuit of private profit generates damaging externalities such as climate change, pollution, stress on families, and disruption of communities the costs of which are borne by others. As Marx and Engels (Reference Marx and Engels1848) pointed out long ago, capitalism permanently revolutionizes the societies it inhabits. It generates what Schumpeter (Reference Schumpeter1942) called “creative destruction” leaving a trail of disruption in its wake. We see this all the time—the collapse of the old industrial sector, the rise and fall of the dot.com empire, the housing bubble, the Eurozone crisis, the global financial crisis, all of which caused massive disruptions to people’s lives.

Beveridge, Keynes and their contemporaries recognized the uncertainty, instability and anti-social tendencies that are generated by capitalist processes. And they designed the welfare state as an apparatus that would manage these risks, stabilize these booms and busts, and establish a framework of collective economic security in which individual risk-taking might proceed. But that welfare state is constantly being put under pressure by the capitalist processes and market forces that it seeks to constrain. Capitalist economies and welfare states have, to repeat a point made earlier, a “contradictory unity”. They require each other; they sustain each other; but they also undermine each other. Profitable capitalist action requires a supportive social environment and an enabling material infrastructure. At a minimum it needs socialized, educated, healthy workers—and the functioning families, schools and healthcare systems that produce them—as well as a dependable supply of resources, a transportation infrastructure, a population of consumers, and a politically stable, business-friendly environment. But left to its own devices, capitalism tends to erode and destroy these vital social and natural environments (Hobsbawm Reference Hobsbawm1996). Its tendency is to commodify, consume, and expand in a competitive drive to accumulate—and these processes produce disastrous side-effects, as witness the current threats affecting the climate, the environment, natural resources, family life, and the physical and economic health of populations.

Market capitalism is, in other words, an inherently “self-destructive social formation” which is protected from these dangers by the operation of anti-market and market-moderating processes. The paradoxical—one might say dialectical—consequence is that “capitalism depends vitally on the presence, essential but never guaranteed, of effective opposition to it” (Streeck Reference Streeck2012: 25). The result is that a resurgence of the power of capital and of free market forces is an ever-present danger to the social system within which capitalism exists. The neo-liberal project of dismantling collective institutions and regulatory frameworks in the name of untrammeled competition and market freedom may, as its critics insist, be pursuing an impossible ideal (Polanyi Reference Polanyi1944; Peck Reference Peck2010), but it carries the real dangers of economic and social collapse nevertheless, as the global crisis of 2008 has shown.

To avoid self-destruction capitalism needs a set of countervailing forces. And “the welfare state” is the collective name we give to these forces. The social regulation of markets, the social insuring of workers, and the public provision of social services and protections—in short, the welfare state in one or other of its variants—is our established means of restraining the rampant opportunism and untrammeled pursuit of private gain that are the essence of free-market capitalism. Critics of this arrangement often describe the welfare state as a hindrance to economic vitality. From a sociological point of view, this is the exact opposite of the case: the welfare state is an essential means of sustaining that vitality. As my Durkheimian analysis is designed to indicate, the welfare state is an essential basis for human flourishing in capitalist society and an essential basis for capitalist flourishing in human society.