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Capitalism needs a welfare state to survive

IN THE mythologies of both left and right, the welfare state is a work of socialism. Yet the intellectual tradition it owes most to is liberalism. The architect of its British version, William Beveridge, did not want to use the power of the state for its own sake. The point was to give people the security to pursue the lives they chose. And liberal reformers believed that by insuring people against some risks of creative destruction, welfare states would bolster democratic support for free markets.

In the decades since Beveridge published his seminal report in 1942, welfare states have spread, grown larger, more complex and, often, less popular (see article). This shift has many causes. But one is that welfare states have often diverged from the liberal principles that underpinned them. It is these principles that must be…Continue reading

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