Social Benefits in Advanced Capitalist Countries

One of the most striking characteristics of the state in the advanced capitalist democracies is the role it plays in the allocation of disposable income. Government policy has, of course, always influenced income distribution through regulation and the provision of public goods, but redistribution is a by-product of such activity, which seeks primarily to accomplish other ends. In contrast, a distinguishing feature of the modem welfare state is its deliberate effort to ameliorate the distribution of income generated by the market. Contemporary states perform this function in two ways, through tax policy and income transfer programs. These are clearly linked, and a comprehensive study of the redistributive consequences of the welfare state would require an examination of their combined impact. Yet income transfers are important in their own right.' They have, indeed, been among the fastest growing components of government activity and, unsurprisingly in an era of economic constraints, among the most controversial. The sharp differences characteristic of contemporary assessments of income transfer policy follow from divergent interpretations of the causes of inequality and of the government's role in addressing it. Supporters of an active welfare state favor more ambitious public redistributive efforts because they regard poverty and insecurity as structural problems inherent in the operation of the market, and they maintain that a measure of social security should be treated almost as a right of citizenship. Moreover, they contend that an active welfare state need not be achieved at the expense of economic growth; indeed, they see income security and distributive equity as important preconditions of a productive work force. Critics of public welfare programs, on the other hand, are suspicious of wide-ranging government transfers because they view most forms of poverty as reflecting a lack of individual effort, and they argue that welfare programs only exacerbate the problem by creating disincentives for individuals to work and save. They reserve their sharpest criticism for programs aimed at the working-aged poor: these efforts, in their view, foster a dependence on government that erodes the self-reliance necessary for a permanent escape from poverty. But even such programs as pensions and health benefits are subject to criticism, if only because they are seen as diverting resources from a productive private sector to an inherently unproductive public sector.2

Economic system · Economics · Political economy · Political science · Social Policy and Reform Studies

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