1Rise and Decline of the Welfare State 1
Liberalism and Social Policy
19 century 1930
• Laissez faire capitalism
• Residual policy: state’s role to step in only when the market and the family fail. Very little social policy. Depended on the
church – charity.
• Market – husband ; family – wife.
• Familalizm – liberal idea the family had to take care of its members.
• Social citizenship rights: social security, public works and institutions, professional public service.
• This is where it flowered.
3Factors leading to stateled capitalism social citizenship
• PreDepression: Liberal reform movement, labour movement – people who did have public sector jobs, mostly through
patronage. Progressives, people who were pushing for a more professional.
• Great Depression, crisis of capitalism – the depressing made it a systemic problem NOT AN INDIVIDUAL PROBLEM. People
realized they had to deal with the problem
• Collapse of banks
• Plight of workers
4 –Keynesianism: John Maynard Keynes (18831946) and state’s role – adopted the idea that the state had to keep the economy
strong. You cant have a strong market! It doesn’t run by itself. Always a debate. Very attractive, the state could go into debt and
kick start when the boom times came. Then the state could recoup its death and carry on.
–Postwar WWII reconstruction through the Marshall Plan – there to
help bring back European economies.
–Expansion of knowledge and the rise of professionalism –
–Cold war rivalries – very much on the minds of western
democracies that you hadto keep the economy going and the
• xitizens believing in the market.
Bretton Wood Insition WWII1970
• IMF, world bank
o To prent anything like the great depression to happen
o Gold standard to regulate currency
o Prevent collapse of economies
o States in the depression actually revived the economy. And revived the private sector.
Mid1970s • Abandoned gold standard
• Speculation on currency
o Energy crisis
• Frenzy of bank lending
o Banking crisis
o Interest rates soar – raised interest rates so they would get a lot of return on the good debts. They were rescued