Note: This semester in my Western Civ classes, I tried to emphasize more about the development of the modern, centralized state. I tried to explain it in three stages, 1.0 (the confessional state), 2.0 (the nation-state), and 3.0 (the welfare state). I’m posting my slightly edited explanations here to get feedback on how accurate and helpful this history is.
Several trends encouraged increased government regulation of countries’ economies:
- As we have seen, industrialization and urbanization transformed European society. Cities grew, a new working class was formed, and new political movements like labor unions and socialist parties grew. Socialists were some of the most important critics of the new industrial economy, viewing it as exploitative of the workers.
- Progressive liberals, unlike classical liberals, called for greater government involvement in economic matters in order to promote what they viewed as fairness and equality and prevent the abuse of the vulnerable. Hence, they argued for a modified, more regulated version of capitalism. A good example of this was the social insurance program in Great Britain, passed shortly before World War I, patterned on a similar program pioneered by the more conservative German chancellor Otto von Bismarck.
- World War I also increased government involvement in economic affairs. As governments mobilized whole societies to fight the war, they geared economies to produce the necessary supplies.
- Finally, the Great Depression created an economic crisis as unemployment hit high levels.
What is a welfare state?
If Modern State 1.0 (the confessional state) promised security and Modern State 2.0 (the nation-state) promised identity and citizenship, Modern State 3.0 (the welfare state) promised a certain standard of living to its people.
To achieve this standard of living, welfare states adopt an “interventionist-redistributive” approach. The phrase is a mouthful, but I’m glad that I encountered it in Tarik Yousef’s article on Middle East economies. Interventionism means that the government intervenes in the economy to try to improve it, hoping that increased spending or regulations will produce better economic results. Redistribution means that wealth is redistributed through spending tax money on programs to assist people who are worse-off economically. Sometimes wealth is redistributed on a large scale, as in socialist or communist countries, and other times it is done on a smaller scale, as in democratic welfare states.
We have already seen welfare state programs in Britain and Germany, but now they would become much more widespread and a standard part of the European, American, and eventually global political landscape. Here are some examples:
- “Pump-priming”: the spending of government money to improve the economy, used in both Nazi Germany and in constitutional governments like the United States and Britain
- Social security programs that provided unemployment insurance, assistance to the elderly, and/or health insurance
- Increased workers’ rights pushed by the Popular Front government in France (Hunt et al. 855)
- Government-provided healthcare services to pregnant women and a “family allowance” subsidy in Sweden, meant to increase the birthrate (Hunt et al. 854)
Types of welfare states
Just as confessional states could be absolutist or constitutionalist and nation-states could be monarchies or republics, welfare states could be administered under different types of governments.
- Constitutional democracies had their welfare states put in place by elected officials and administered by bureaucracies. Examples include the United States, Great Britain, France, and Sweden.
- Ultranationalist dictatorships like Nazi Germany and Fascist Italy also offered welfare state benefits to their populations in order to strengthen their nations. At the same time, there was more of an emphasis that the workers and business owners should be on the same page, with both being subservient to the government’s agenda for the country. Also, German policies under the Nazis were clearly targeted at (as they saw it) true ethnic Germans, and the government was openly hostile and eventually murderous to those they saw as enemies of the German people, most obviously Jews and those who dared to criticize the regime.
- The Soviet Union, the lone communist country in the world until after World War II, undertook the most comprehensive effort to construct a welfare state, seizing total control of the Soviet economy. The Soviet Union’s efforts under Lenin and Stalin massively disrupted and transformed the old Russian economy, and the authorities were also intensely and often lethally hostile to those that were deemed enemies of the people. See this article for an explanation.
Hunt et al. The Making of the West
Kagan, Ozment, and Turner, The Western Heritage
John Gray, “Communism, Fascism, and liberals now,” Times Literary Supplement, January 2, 2013, http://www.the-tls.co.uk/tls/public/article1186584.ece
Tarik M. Yousef, “Development, Growth and Policy Reform in the Middle East and North Africa since 1950,” Journal of Economic Perspectives, Summer 2004, pages 91-116.