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The limits of the Welfare State
Social welfare or the social services, operating through agencies, institutions and programs outside the private market, are becoming more difficult to define in any society with any precision. As societies become more complex and specialized, so do systems of social welfare. Functionally, they reflect and respond to the larger social structure and its division of labour. This process makes it much harder today to identify the causal agents of change—the microbes of social disorganization and the viruses of impoverishment—and to make them responsible for the costs of ‘disservices’. Who should bear the social costs of the thalidomide babies, of urban blight, of smoke pollution, of the obsolescence of skills, of automation, of the impact on the peasants of Brazil of synthetic coffee which will dispense with the need for coffee beans? The private benefits are to some extent measurable and attributable, but the private losses are not. Neoclassical economics and the private market cannot make these allocations; they are not organized to estimate social disruption and are unable to provide adequately for the public needs created by social and economic change.
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