The Rationale for the Retreat from the Welfare State

Abstract

‘Since 1979’, Vernon Bogdanor (2009, p. 310) recently remarked, ‘the fundamental idea of socialism, the idea that the state can reconstruct the economy and society so as to improve standards of social welfare, has found itself in retreat. The age of rationalism, the idea that governments can successfully plan for the future, is dead’. The result, as another commentator (Barry, 1999, p. 1) observed, is that by the end of the twentieth century the concept of welfare was undergoing what was probably ‘its most thorough examination ever’. For this, three main reasons may be given. One is dissatisfaction with the practical application of the concept to the post 1945 welfare state, which has given rise to financial, economic, moral and political problems either unforeseen or else underestimated by its founders. A second is the breakdown of the post 1945 consensus about ‘middle way’ politics, which has destroyed confidence in central planning and, more generally, in the possibility of creating a stable half way house between capitalism and collectivism. The collapse of the consensus is evident, in addition, in criticism by feminists in particular of the established welfare system as unrepresentative of the needs of the community as a whole. A third reason is the impact of globalisation, which has severely undermined the control over national economic, political and cultural life that post-war social democracies were formerly able to take for granted. While none of these concerns entails the rejection of the concept of welfare as such, they have led to deep uncertainty – brought to a head by the 2008 credit, crisis which engulfed Western states – about the form social democracy should henceforth take.