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The notion, and the extent of, the modern welfare state has been criticised on both economic and social grounds, from both the Left and the Right of the political spectrum.

Libertarian & Conservative criticisms

A Libertarian argument characterizes welfare as theft of property or forced labor (i.e. slavery). This criticism is based upon the classical liberal human right to obtain and own property, wherein every human being owns his body, and owns the product of his body's labor (i.e. goods, services, land, or money). It follows that the removal of money by any state or government mechanism from one person to another is argued to be theft of the former person's property or a requirement to perform forced labor for the benefit of others, and thus is a violation of his property rights or his liberty, even if the mechanism was legally established by a democratically elected assembly. In April, 2010, the Associated Press reported that 47% of US households will pay no federal income taxes at all for 2009.

In his book, The Servile State, English political writer Hilaire Belloc makes his case for the natural instability of pure capitalism and discusses how (as he believes) attempts to reform capitalism will lead almost inexorably to an economy where state regulation has removed the freedom of capitalism and thereby replaced capitalism with what he calls the Servile State. According to Belloc, the Servile State shares with ancient slavery the fact that positive law (as opposed to custom or economic necessity by themselves) dictates that certain people will work for others, who likewise must take care of them. Ergo, according to Belloc, the welfare state may leads to a kind of serfdom where one group works to support another group that does not work.

The welfare state has been criticized on the grounds that it allegedly provides its dependents with a similar level of income to the minimum wage. Critics argue that fraud and economic inactivity are apparently quite common now in the United Kingdom and France. Some conservatives in the UK claim that the welfare state has produced a generation of dependents who, instead of working, rely solely upon the state for income and support; even though assistance is only legally available to those unable to work. The welfare state in the UK was created to provide certain people with a basic level of benefits in order to alleviate poverty, but that as a matter of opinion has been expanded to provide a larger number of people with more money than the country can ideally afford.

Some feel that this argument is demonstrably false: the benefits system in the UK provides individuals with considerably less money than the national minimum wage, although people on welfare often find that they qualify for a variety of benefits, including benefits in-kind, such as accommodation costs which usually make the overall benefits much higher than basic figures show.

Some conservatives in the UK claim that the welfare state has produced a generation of dependents who, instead of working, rely solely upon the state for income and support; even though assistance is only legally available to those unable to work. Bartholemew suggests that though the benefits system in the UK provides individuals with considerably less money than the national minimum wage, people on welfare often qualify for a variety of benefits, including benefits in-kind, which increase the level of overall benefits above what basic figures show.

Economic criticisms

A criticism of the welfare state is that it results in high taxes. This is usually true, as evidenced by places like Denmark (tax level at 48.9% of GDP in 2007) and Sweden (tax level at 48.2% of GDP in 2007).

A criticism of the welfare state is the belief that welfare services provided by the state are more expensive and less efficient than the same services would be if provided by private businesses. In 2000, Louis Kaplow and Steven Shavell published two papers stating that any social policy based on such concepts as justice or fairness would result in an economy which is Pareto inefficient. Anything which is supplied free at the point of consumption would be subject to artificially high demand, whereas resources would be more properly allocated if provision reflected the cost.

Criticism on the Left

Marxists argue that welfare states and modern social democratic policies limit the incentive system of the market by providing things such as minimum wages, unemployment insurance, taxing profits and reducing the reserve army of labor, resulting in capitalists having little incentive to invest; in essence, social welfare policies cripple the capitalist system and its incentive system, and that the only real solution to the issues of capitalism is a socialist economic system.

The most extreme criticisms of states and governments are made by anarchists, who believe that all states and governments are undesirable and/or unnecessary. Some socialist anarchists believe that while social welfare gives a certain level of independency from the market and individual capitalists, it creates dependence to the state, which is the institution that, according to this view, supports and protects capitalism in the first place. Nonetheless, according to Noam Chomsky, "social democrats and anarchists always agreed, fairly generally, on so-called 'welfare state measures'" and "Anarchists propose other measures to deal with these problems, without recourse to state authority." Some socialist anarchists believe in stopping welfare programs only if it means abolishing government and capitalism as well.

In The Servile State, English political writer Hilaire Belloc makes his case for the natural instability of pure capitalism and suggests that attempts to reform capitalism will lead almost inexorably to an economy where state regulation has removed the freedom of capitalism and thereby replaced capitalism with what he calls the Servile State. According to Belloc, the Servile State shares with ancient slavery the fact that positive law (as opposed to custom or economic necessity by themselves) dictates that certain people will work for others, who likewise must take care of them. Ergo, according to Belloc, the welfare state may leads to a kind of serfdom where one group works to support another group that does not work.

See also

• Welfare culture
• Culture of entitlement
• Pensions crisis
• Nanny state
• Welfare fraud
• Benefit fraud
• Welfare queen

Contrast:

• Limited government
• Fiscal conservatism

References

1. 47% of Americans Pay No Federal Income Tax
2. The Welfare State We're in / James Bartholomew (2004) ISBN 1-84275-063-1
3. Our Culture, What's Left of It: The Mandarins and the Masses / Theodore Dalrymple (2005) ISBN 1-56663-643-4
4. The Welfare State We're in / James Bartholomew (2004) ISBN 1-84275-063-1
5. Our Culture, What's Left of It: The Mandarins and the Masses / Theodore Dalrymple (2005) ISBN 1-56663-643-4
6. The Welfare State We're in / James Bartholomew (2004) ISBN 1-84275-063-1
7. Our Culture, What's Left of It: The Mandarins and the Masses / Theodore Dalrymple (2005) ISBN 1-56663-643-4
8. ^ http://en.wikipedia.org/List_of_countries_by_tax_revenue_as_percentage_of_GDP
9. Market Socialism: The Debate Among Socialists, by Schweickart, David; Lawler, James; Ticktin, Hillel; Ollman, Bertell. 1998. (P.60-61): "The Marxist answers that market socialism cannot exist because it involves limiting the incentive system of the market through providing minimum wages, high levels of unemployment insurance, reducing the size of the reserve army of labour, taxing profits, and taxing the wealthy. As a result, capitalists will have little incentive to invest and the workers will have little incentive to work. Capitalism works because, as Marx remarked, it is a system of economic force (coercion)."
10. http://www.zmag.org/chomsky_repliesana.htm Noam Chomsky on anarchist support for 'welfare state' policies
11. J.5 What alternative social organisations do anarchists create?

• Criticisms of welfare